UNION BUDGET 2019 BRIEF

Relevance: mains: G.S paper III: Government Budgeting.

The Union Budget 2019 has focused on fundamentals— improving India’s socio-economic scenario, empowering rural India through electrification, water, connectivity, improving ease of living and doing business, women empowerment, education and skilling. These are basic pillars essential to the development of a nation and it is evident that the government has a dedicated focus on addressing these basic issues.

There are multiple benefits for consumers to avail through the announcements made in the Budget.

The government has tried to address issues for both the urban and the rural Indian, through announcements such as providing constant electricity at affordable rates or the move to provide affordable housing through an additional deduction on the interest paid.

With initiatives such as ‘Har Ghar Jal’ which aims at providing safe drinking water to every household by 2024 or the keen interest shown by the government in skilling the workforce on new age technologies such as Artificial Intelligence, Internet of Things, Robotics, Virtual Reality and Big Data, the Union Budget 2019 is truly a budget for a better India.

Top 10 takeaways from Union Budget 2019:

* Finance minister proposed to enhance surcharge on individual income of Rs 2-5 crore and over Rs 5 crore by 3% and 7% respectively. She said that those in the highest income bracket need to contribute more to national development.

* Custom duty on gold and other precious metals from 10% to 12.5% has been proposed.

* To provide further impetus to affordable housing, additional deduction of Rs 1.5 lakh on interest paid on loans borrowed up to March 31, 2020 for purchase of house up to Rs 45 lakhs.

* Special additional duty and road and infrastructure cess on diesel and petrol to be increased by

Re 2/litre.

* “From 1.85 trillion dollars in 2014, the economy has reached 2.7 trillion US dollars; We can very well reach 5 trillion dollars in the next few years. The Indian economy will grow to become a 3 trillion dollar economy this year itself.”

* Government has already moved GST council to lower the GST rate on electric vehicles(EV) from 12% to 5%.

* Finance minister said that the fiscal deficit in 2019 is 3.3%, brought down from 3.4%.

* All companies having annual turnover of 400 crores, will now be under the bracket of 25% corporate tax rate . This will cover 99.3% of all the companies.

* To provide further impetus to affordable housing, additional deduction of 1.5 lakh rupees on interest paid on loans borrowed upto 31 March 2020 for purchase of house up to Rs 45 lakhs.

* ‘Gandhi-pedia’ too to be developed on the lines of encyclopedia to help promote Gandhian school of thought.

Sector-wise highlights

Table of Contents

1. Direct Taxation

Interest deduction on housing loan under Section 80EE increased by 1.5 lakhs for home loans taken on self-occupied house property by 31/3/2020, houses with the cost of Rs 45 lacs will be eligible for this.
Interchangeability of PAN and Aadhar for ease and convenience of taxpayers! Income Tax return can be filed using Aadhar Number.
To discourage cash payments TDS@2% on withdrawals exceeding 1Cr per annum from a bank account
Surcharge for individuals having taxable income from Rs 2 crores to Rs 5 crores increased to 18% from 15%
Surcharge for individuals having taxable income from Rs 5 crores to Rs 10 crores increased to 22% from 15% – FY 2019-20
Proposal to give relief in levy of securities transaction tax
Corporate tax worth 25% that is applicable to companies with an annual turn over Rs 250 crore will be applicable to the ones with an annual turnover of Rs 400 crore
35AD extended to Li-On battery, Semi-Conductor, Laptops, Fabrication & Photo Volic

2. Infrastructure

Focus on investment in infrastructure, national highways and aviation sectors
The second phase of Bharat Mala to develop state highways
A comprehensive restructuring of national highways will be taken up

3. Education

National education policy to propose major changes in both secondary and higher education
Swayam Initiative – Digital education to be promoted
Greater focus on research and development – National Research Foundation to fund and promote research – pooling of research grants from various ministries and disbursing them, preventing duplication of research projects
For the Youth – New national educational policy to transform the Indian education system

4. Startup Development

Government to introduce a host of exclusive programs for startups on DD News

5. Household

Provision of housing, electricity, clean cooking facility, safe and adequate drinking water to all in rural India
Encouragement of rainwater harvesting, groundwater recharge, and management of household wastewater for reuse in agriculture
Har Ghar Jal – to all rural household by 2024
7 crore LPG connections delivered to rural households

6. Pension

1.Proposed pension benefit to 3 crore retail traders and shopkeepers whose annual turnover is up to Rs 1.5 crore

7. MSME

350 crore rupees allocated for 2% interest subvention for all GST-registered MSMEs on fresh or incremental loans
MSME: Large-scale extensive reforms planned, government to create a platform for MSME payments
MSME to get loans up to 1 crore within 59 minutes. Loans worth Rs. 350 crore already disburse

8. Women Empowerment

Committee to be formed with Public and Private stakeholders for gender equality: FM
Every SHG Women having Jan Dhan Account – Rs. 5,000/- overdraft allowed: FM
Loan up to 1 lakh under Mudra Scheme for Women entrepreneurs: FM

9. NRI- Budget 2019 Highlights

Proposal for Issuance of Aadhar Card on arrival for NRIs with Indian Passports: FM
Aadhaar card for NRI’s post arrival in India
To increase NRI investment in Indian capital market – NRI portfolio scheme route and FPI route should merge

10. Budget

Railway infra would need an investment of 50 lakh crores between 2018 and 2030
PPP to be used to unleash faster development and delivery of passenger freight services
Railway Station Modernisation will be launched this year.
Indian Railways to be encouraged to invest more in urban and suburban regions
657KM of Metro Rail operational in the country.

11. Banking and Financial Sector – Budget 2019 Highlights

Reforms will be taken to strengthen governance in Public Sector banks
NPAs of commercial banks reduced by over 1 lach crores over last year
Record Recovery of over 4lac crore with IBS
NPAs of commercial banks reduced by over 1 lakh crore over last year
After Consolidation of Public Sector Banks, now 70,000 Crore of Capital boost for credit improvement
Government has smoothly carried out consolidation, reducing the number of PSBs by 8
NBFCs – that are fundamentally sound, will get fundings from govt to a total of 1lakh crore during the current financial year
RBI has limited regulatory Authorities, Now the Regulatory Authorities of RBI over NBFC will be placed
Proposals for strengthening the regulatory authority of RBI over NBFCs – Debenture Redemption Reserve to be maintained
Proposal to return regulatory authority from NHB to RBI!

12. Electric Vehicles – Budget 2019 Highlights

Lower GST Rate from 12% to 5% on Electric vehicle and Additional Income Tax Deduction of 2.5 Lakh on Interest paid on loan taken to purchase an electric vehicle
To make electric vehicles affordable, additional IT deduction on 1.5 lakh on interest paid on loan taken to purchase electric vehicles

13. Technology – Budget 2019 Highlights

Solar storage batteries and chargers included in 35AD deduction: FM
Program of mass scaling of LED Bulbs – Approx. 35 Crores of LED bulbs distribute
Machines and robots to be deployed for scavenging
Focus on VR, AI, Robotics training to youth to align India with the World