Finance Minister Nirmala Sitharaman presented the Budget 2019-20 as India’s first full-time woman Finance Minister.
The initial part of the budget speech focused on the vision of the economy to become $5 trillion in the next five years. To those who keep doubting this vision, she said the economy has now reached $2.7 trillion from $1.85 trillion in 2014.
The Modi government added $1 trillion to Indian economy in just the last 5 years as opposed to the 55 years it took India to become a $1 trillion economy, she said. The Indian economy is slated to become a $3 trillion economy in present year itself. We are also the sixth largest economy in the world, up from 11th position 5 years ago, she said.
Here are the key takeaways from her speech.
Zero Budget Farming is to be promoted, going back to traditional methods of agriculture.
10,000 new Farmer Producing Organization (FPO) will be formed.
80 Livelihood Business Incubators (LBIs) and 20 Technology Business Incubators (TBIs) are to be set up in 2019-20 under ASPIRE scheme to develop 75,000 skilled entrepreneurs in agro-rural industries.
Government to push Pradhan Mantri Matsya Sampada Yojana to address the critical infrastructure in the fisheries sector.
During 2019-20 to 2021-22, 1.95 crore houses are proposed to be provided to eligible beneficiaries under the Pradhan Mantri Awas Yojana – Gramin.
By 2022, the 75th year of India’s independence, every single rural family,except those who are unwilling to take the connection will have an electricity and a clean cooking facility.
Drinking water is to be provided to all rural households by 2024 under the Jal Jeevan Mission.
New tenancy law: A modern tenancy law will be finalized and given to the states.
Pension benefits will be offered to 3 crore retail traders and small shopkeepers with annual turnover of less than Rs 1.5 crore under new scheme called Pradhan Mantri Shram Yogi Mandhan Yojana.
Electronic fundraising platform, a Social Stock Exchange, to be set up to list social enterprises and voluntary organizations working for social welfare objectives.
To provide further impetus to affordable housing, additional deduction of upto Rs 1.5 lakh on interest paid on loans borrowed upto 31 Mar, 2020 for purchase of house up to Rs 45 lakhs.
Several reforms would be undertaken to promote rental housing; current rental laws are archaic as they do not address lessor-lessee relationships fairly.
100 new clusters to be set up in 2019-20 under Scheme of Fund for Upgradation and Regeneration of Traditional Industries (SFURTI), which will enable 50,000 artisans to join the economic value chain.
One woman in every Self-Help Group (SHG) will be allowed for a loan upto Rs 1 lakh under Mudra loan. Every women SHG member having a verified Jan Dhan account to get an overdraft facility of Rs 5,000.
Corporate tax rate is now made 25% for companies with annual turnover up to Rs 400 crore. This threshold used to be Rs 250 crore earlier. This will cover 99.3% of all companies.
Credit Guarantee Enhancement Corporation (CGEC) will be set up in 2019-20, action plan to deepen markets for long-term bonds with specific focus on infra sector to be put in place.
Rs 350 crore has been allocated for FY 2019-20 for 2% interest subvention for all GST-registered MSMEs on fresh or incremental loans.
The government is to expedite streamlining multiple labour laws into a set of four labour codes.
An exclusive TV channel for Startups is proposed.
‘Stand Up India’ Scheme, to promote SC/ST entrepreneurs to start their own ventures, is to continue till 2025.
Banking & Finance
The government has proposed to allocate Rs 70,000 crore for Public Sector Banks (PSB) recapitalisation.
Regulatory authority of RBI over Non-Banking Finance Corporations (NBFCs) is to be strengthened and steps are to be taken to allow NBFCs to directly participate on TReDS platform.
A new series of coins including for Rs 20 will be made available for public use shortly.
Interchangeability of PAN card and Aadhaar has been allowed for filing the Income Tax Returns.
Strategic disinvestment of select Central Public Sector Enterprises will continue to be a priority. The strategic disinvestment of Air India will be re-initiated.
Rs 100 lakh crores to be invested in next 5 years for infrastructure. Committee will be set up to look into long term funding.
Massive push is to be given to modernization of railway stations in India.
Railway infrastructure needs an investment of Rs 50 lakh crore by 2030 and PPP approach will be used to ensure faster development and delivery of passenger freight services
The government is to give further push to existing plans and schemes for better connectivity and infrastructure development in the country.
- Pradhan Mantri Gram Sadak Yojana
- Industrial corridors
- Dedicated freight corridors
- Jal Marg Vikas
- UDAN schemes
Foreign Investment in India
India’s FDI flows in 2018-19 has remained strong compared to other countries at $64.375 billion, 6% higher than last year. The government will examine options of opening up FDI in media, animation and some other sectors to improve these flows further.
100% FDI will be permitted for insurance intermediaries.
Local sourcing norms for FDI is to be eased for single-brand retailing sector.
Annual Global Investors’ Meet is to be organized in India, using NIIF as the anchor to get key sets of global players to come and invest in India.
National Sports Education Board (NSEB) for development of sportspersons is to be set up under Khelo India.
To make India a hub of higher education, the government has proposed ‘Study in India’ to bring in foreign students to pursue education here
The government will be increasing its efforts to improve the skills of youth in fields of Artificial Intelligence (AI), Big Data, Robotics, and other newer skills.
National Research Foundation (NRF) is to be set up to strengthen overall research ecosystem in the country, integrating funds available under all ministries.
Science & Research
A New Space India Limited (NSIL), a public sector enterprise, has been incorporated to tap the benefits of Research & Development carried out by ISRO. The company will spearhead commercialization of various space products.
The government has proposed to consider issuing Aadhaar cards to NRIs with Indian passports in India without having to wait for the necessary 180 days.
To provide NRIs seamless (access) to Indian equities, NRI-Portfolio Investment Scheme route is to be merged with Foreign Portfolio Investment (FPI) route.
The government is developing 17 iconic tourism sites as world-class tourist centers to improve the flow of domestic and foreign tourists to these destinations.