The union budget means different things to different people.
To the man in the street it means a new price and tax regime and to the woman in the kitchen it means finding new ways of balancing the home budget.
It all adds up to going round in circles trying to make the ends meet for most citizens.
The budget which the honorable finance minister has presented for the year 2020, with the aim of boosting income and increasing the purchasing power of individuals initially got a thumbs down from the stock market as the indices tanked but later bounced back strongly recouping the losses and cheering the general sentiment.
The following are the highlights of the budget that, according to the government, have been structured around three prominent themes –Aspirational India, Economic Development for all and caring society.
1) For starters, the finance minister has removed more than seventy deductions that provided relief to income taxpayers.
2) With the dividend distribution tax (DDT) scrapped you will now be required to pay income tax as per your individual tax slab.
3) With the new income tax regime that has been introduced, you will pay lower income tax if you forego income tax deductions.
The following proposals will bring cheer to most tax payers:
i) For taxable income up to Rs. 5 lakh tax – Nil tax
ii) For taxable income between Rs5 lakh to Rs7.5 lakh Income tax rate stands reduced from 20% to 10%.
iii) For taxable income from Rs7.5 lakh to Rs10 lakh the tax rate has been reduced from 20% to 15%.
iv) For taxable income between Rs10 lakh to Rs12.5 lakh the applicable tax rate will be 20% as against the earlier 30% to 20%.
v) For taxable income between Rs12.5 lakh to Rs15 lakh, the rate will now be 25% down from 30%.
vi) For taxable income above Rs15 lakh income tax has been retained at 30%.
- Tax on cooperative societies has been revised downward from 30% to 22% surcharge and cess.
- Vivaad se vishvas scheme, a scheme to be launched to settle direct tax disputes has been proposed. Meanwhile, the government will waive interest and penalty for those who wish to pay the disputed amount till 31 March.
- The government has extended a new corporate tax regime for new manufacturing plants to new power generation companies with a view to boost power generation capacity. The companies will pay only 15 % tax under the new corporate tax regime.
- The registration of charity institutions is proposed to be made fully electronic. Pre-filled IT return form to claim exemption easily.
- A new taxpayer charter is to be instituted to end tax harassment.
Agriculture, Irrigation and Rural Development
Allocation of Rs 2.8 lakh crore for the agriculture sector has been made in the budget
- Pradhan Mantri Kisan Urja Suraksha Utthan Mahabhiyan is to be extended under which 20 lakh farmers would be allocated funds for stand-alone solar pumps and additional 15 lakh for grid connected pumps.
- Indian Railways and Ministry of Civil Aviation is to launch ‘Kisan Rail’ and ‘Krishi Udaan’ schemes respectively for a seamless national cold supply chain for perishables.
- It has been proposed to raise fishery exports to Rs1 lakh crore by 2024-25.
Wellness, water and sanitation
The budget has allocated Rs 69,000 crore for the healthcare sector.
- More than 20,000 empanelled hospitals under PM Jan Arogya Yojana to be set up.
- Jan Aushadhi Kendra Scheme proposed to be expanded to all districts by 2024.
- The budget provides for allocation of Rs 12,300 crore for Swachh Bharat this financial year.
- Budget has allocated Rs99,300 crore for the education sector in 2020-21 and around Rs3,000 crore for skill development.
- Full-fledged online degree level education programs from top 100, NIRF ranking institutes to benefit underprivileged students.
- Finance Minister has proposed IND SAT exam for students of Asia and Africa to promote ‘study in India’ program.
- This union budget allocates Rs 1.7 lakh crore for the infrastructure sector.
- Roads: Accelerated development of highways
- Railways: 150 passenger trains through PPP mode. Additional Tejas type trains for tourist destinations.
- Airways: 100 more airports to be developed under UDAAN
- Large solar power capacity for Indian Railways planned
- A suburban rail project for Bengaluru planned at a cost of Rs18,600 crore
- Under the public-private partnership mode the budget provides for five new smart cities.
A national mission for Quantum Technologies and applications proposed with an outlay of Rs 8000 crore.
Banking and financial sector
- Government plans to launch debt ETF aimed at boosting the debt market.
- Deduction of Rs1.5 lakh for affordable housing announced earlier extended by one more year. Projects under affordable housing will get a tax holiday for one more year, but they need to get clearance by March 2021.
- For the security of fixed deposits, the budget has increased deposit insurance cover in banks from Rs 1 Lakh to Rs 5 Lakhs per depositor. The deposit insurance would apply even for deposits in multiple banks, i.e. Rs 5 Lakhs maximum insurance.
- Finance ministry is considering stake sale in LIC through public offering i.e. Initial Public Offering.
- New schemes to encourage the manufacture of mobile phones, electronic equipment and semiconductor packaging being planned
- Private sector to be encouraged to build Data Centre Parks in the country
Women & Child, Social Welfare
- More than 6 lakh anagan wadi workers equipped with smartphones
- Taskforce proposed for recommendations on lowering MMR and improving nutrition levels. Nutrition-related programmes outlay proposed Rs 35600 crore.
Culture and Tourism
- Tourism promotion outlay proposed at Rs2500 crore
- Indian Institute of Heritage and conservation proposed
- Tribal museum to be set up in Ranchi
- Maritime museum planned at Lothal
Environment & Climate Change
- The Coalition for Disaster Resilient Infrastructure was launched in September 2019
- Encouragement to states implementing plans for cleaner air in cities above 1 million population
The budget aims to implement the vision of the government articulated as ‘Sabka Saath, Sab ka vikas’, (Development of all with the cooperation of all). With India emerging as the fifth largest economy in the world, the new thrust of the budget on development of all is a welcome shift in approach.