BUDGET 2020
Structural Reforms under governance:
IBC
- Honorable exit through IBC for companies.
GST
- 20 percent reduction in turnaround time for trucks.
- Benefit to MSMEs through enhanced threshold and composition limits.
- Savings of about 4 percent of monthly spending for an average household.
- In last 2 years, 60 lakh new taxpayers added and 105 crore e-way bills generated
Digital Revolution under governance:
Shift to DBT
- During 2018-19, `7 lakh crore transferred through DBT.
Next wave
- Digital Governance.
- Improve physical quality of life through National Infrastructure Pipeline
- Disaster Resilience.
- Social Security through Pension and Insurance penetration.
Inclusive growth under governance
Governance guided by “Sabka Saath, Sabka Vikas, Sabka Vishwas” with focus on:
- Preventive Healthcare: Provision of sanitation and water
- Healthcare: Ayushman Bharat
- Clean energy: Ujjawala and Solar Power
- Financial Inclusion, Credit support, and Pension
- Affordable Housing
- Digital penetration
Financial Sector
- Deposit Insurance Coverage to increase from `1 lakh to `5 Lakh per depositor.
- Eligibility limit for NBFCs for debt recovery under SARFAESI Act proposed to be reduced to asset size of `100 crores or loan size of `50 lakh.
- Proposal to sell balance holding of government in IDBI Bank.
- Separation of NPS Trust for government employees from PFRDAI.
- Specified categories of government securities would be opened for non-resident investors
- FPI Limit for corporate bonds to be increased to 15 percent.
- New debt ETF proposed mainly for government securities.
Tax proposals
- Concessional corporate tax rate of 15 percent to new domestic companies in manufacturing and power sector.
- Tax concession for sovereign wealth fund of foreign governments and other foreign investments.
- Tax benefits to Start-ups by way of deduction of 100 percent of their profits are enhanced by increasing turnover limits and period of eligibility.
- Concessional tax rate for cooperatives proposed.
- Turnover threshold for audit of MSMEs increased.
- Extension of time limits pertaining to the tax benefits for affordable housing.
- Issuance of Unique Registration Number to all charity institutions for easy tax compliance.
- Health cess to be imposed on imports of medical equipment given these is made significantly in India.
Budget 2020 has proposed a new tax regime slashing income tax rates and rejigging income tax slabs to reduce total tax payable by individuals. As per the new regime, 70 tax exemptions will be removed.
| Income Bracket (`lakh) | Before | Now |
| 0-2.5 lakh | 00 | 00 |
| 2.5-5 lakh | 5% | 00 |
| 5-7.5 lakh | 20% | 10% |
| 7.5-10 lakh | 20% | 15% |
| 10-12.50 lakh | 30% | 20% |
- Which tax regime -old or new–would be beneficial i.e. result in lower tax payable for each individual is likely to depend on his/her income composition and investments done. Each individual will have to do his/her own calculations to figure out which tax regime is more beneficial to him/her. For example, a person who has bought a long term life insurance policy may have to continue paying the premium and claiming the tax benefit on it.
- As dividends become taxable in your hands, your taxable income will increase. This will add to the uncertainty about how much tax relief an individual will get from all the budget proposals together.
- Simplified GST return shall be implemented from 1st April 2020. Refund process to be fully automated.
Agriculture, Irrigation and Rural Development
- Indian Railways and Ministry of Civil Aviation respectively are to launch “Kisan Rail” and “Krishi Udaan” for a seamless national cold supply chain for perishables.
- Viability gap funding for creation of efficient warehouses on PPP mode.
- SHGs run Village storage scheme to be launched.
- Integration of e-NWR with e-NAM.
- Elimination of and brucellosis in cattle and PPR in sheep and goat by 2025.
- Increasing coverage of artificial insemination to 70 percent.
- Doubling of milk capacity by 2025.
- Agricultural credit target of `15 lakh crore for 2020-21.
- By 2022-2023 Fish production target of 200 lakh tonnes.
- By 2024-2025 raise fishery export to Rs one lakh crore.
Wellness, Water and Sanitation
- ODF Plus to sustain ODF behavior.
- Focus on liquid and grey water management along with waste management.
- By 2024 expansion of Jan Aushadhi Kendra Scheme.
- Viability gap funding proposed for setting up hospitals in the PPP mode.
- By 2025 to end TB “TB Harega Desh Jeetega” campaign will be launched.
Education and Skills
- About 150 higher educational institutions will start apprenticeship embedded courses.
- Internship opportunities to fresh engineers by urban local bodies.
- Special bridge courses to improve skill sets of those seeking employment abroad.
- Degree level online education programmes for students of deprived sections of the society.
- Ind-SAT to be conducted in Asia and Africa under Study in programme.
Industry, Commerce, and Investment
- Scheme to encourage manufacturing of mobile phones, electronic equipment, and semiconductor packaging.
- NIRVIK Scheme for higher export credit disbursement launched.
- Setting up of an Investment Clearance Cell to provide end to end facilitation.
- Extension of invoice financing to MSMEs through TReDs.
- A scheme to provide subordinate debt for entrepreneurs of MSMEs.
- Scheme anchored by EXIM Bank and SIDBI to handhold MSMEs in exports markets.
Infrastructure
- National Logistics Policy to be launched soon.
- Roads: Accelerated development of Highways.
- Railways: Four station redevelopment projects
- 150 passenger trains through PPP mode.
- More “Tejas” type trains for tourist destinations.
- Port: Corporatizing at least one major port.
- Air: 100 more airports to be developed under UDAAN.
- Expand National Gas Grid to 27,000 km.
- Efforts to replace conventional energy meters by prepaid smart meters.
- Rs 103 lakh crore National infrastructure Pipeline projects announced.
Expenditure of major items (in crores)
| Ministry of Housing and Urban Affairs | Rs. 50040 |
| Ministry of Health and Family Welfare | Rs. 67112 |
| Ministry of Railways | Rs. 72216 |
| Ministry of Road Transport and Highways | Rs. 91823 |
| Ministry of Human Resource Development | Rs. 99312 |
| Ministry of Rural Development | Rs. 122398 |
| Ministry of Consumer Affairs, Food and Public Distribution | Rs. 124535 |
| Ministry of Agriculture and Farmers’ Welfare | Rs. 142762 |
| Ministry of Home Affairs | Rs. 167250 |
| Ministry of Defence | Rs. 471378 |
