Expectations were high as Nirmala Sitharaman took the podium to present the first Union budget on Friday following the Narendra Modi-led National Democratic Alliance’s resounding victory in the recently-concluded Lok Sabha elections.
Here are some of the highlights from the finance minister’s speech, broken up topically for clarity:
1. No change in income tax slabs. Surcharge on individuals with taxable income from Rs 2-5 crore, and Rs 5 crore and above will increase by 3% and 5% respectively
2. Proposal to impose additional excise duty on petrol and diesel by Rs 1 per litre.
3. Startups which file all requisite declarations will not be subjected to any kind of tax scrutiny on valuation
4. All companies with an annual turnover of Rs 400 crore or less to be taxed under the lower tax rate of 25%. This covers 99.3% of all companies.
5. Additional tax deduction of Rs 1.50 lakh on interest paid on housing loans for self-occupied house owners
6. Additional income tax deduction of Rs 1.5 lakh on interest paid on loans taken to purchase electric vehicles. GST rate on electric vehicles to be reduced to 5% from 12%
7. TDS at 2% on cash withdrawal of Rs 1 crore or more per year from bank account
8. Imported defence equipment not being manufactured in India exempt from basic customs duty.
9. Proposal to increase customs duty on gold, precious metals to 12.5%
10. Proposal to levy 5% customs duty on imported books to encourage domestic printing industry.
1. Government to set a target of Rs 1.05 lakh crore in disinvestment proceeds for the current financial year.
2. Govt to consider lowering its stake in non-financial PSUs below 51%. In some PSUs, government proposes that its stake could go below 51% including stake held by government-owned institutions.
3. Strategic disinvestment of select PSUs, including Air India, remains a priority.
ECONOMY AND INFRASTRUCTURE
1. Fiscal deficit target set at 3.3% in FY20, It was 3.4% in FY19.
2. Will ease foreign direct investment restrictions in single-brand retail.
3. Will open up FDI in aviation, insurance, media and animation sectors.
4. The government will invest Rs 100 lakh crore in infrastructure in the next five years.
5. More than 1.25 lakh kilometres of roads will be upgraded under the Pradhan Mantri Gram Sadak Yojana at a cost of more than Rs 80,000 crore.
6. The government will carry out a restructuring of the highway building programme to ensure enough capacity is created.
7. Railway infrastructure will need an investment of $72 billion between 2018 and 2030.
8. The Finance Ministry is examining the UDAY scheme for power discoms and a power tariff policy will also be announced soon.
AGRICULTURE & RURAL
1. The government will set up 80 livelihood business incubators and 20 technology business incubators in the rural agro sector.
2. It will also help set up 10,000 new farmer producer organisations 3. The FM also discussed the concept of “zero budget farming” as she says “we need to go back to the basics”. She said the e-NAM Act should not hamper farmers from getting a fair price for their produce.
4. By 2024, all rural households will have water supply under the ‘Jal Jeevan Mission’.
5. USO Fund will be used to target internet connectivity for every gram panchayat under the Bharat Net programme.
1. The government will bring in a new National Education Policy and establish a National Research Foundation, which will assimilate the grants being given by each ministry independent of each other.
2. It will also allocate Rs 400 crore for “world-class institutions” and to start a programme ‘Study in India’ to bring in foreign students for higher education.
1. Government to focus on new-age skills including artificial intelligence, 3D printing, which also have a market outside India, to enable people to get jobs outside India.
2. Government proposes to streamline multiple labour laws into a set of four labour codes.
1. NPAs by banks have reduced by Rs 1 trillion.
2. Public sector banks to be recapitalised with Rs 70,000 crore to boost credit.
3. For purchase of high-rated pooled assets of financially-sound NBFCs, amounting to Rs 1 lakh crore during the current financial year, the government will provide one-time six-months partial credit guarantee to PSBs for first loss up to 10%
4. RBI to regulate housing finance companies, instead of the National Housing Bank.
1. NPS trust to be separated from the PFRDA to maintain arms-length distance
2. Net-owned fund requirement for foreign reinsurers to be reduced from Rs 5,000 crore to Rs 1,000 crore.
3. For markets, the government is planning several measures, the most interesting of which involve allowing investments made by FIIs into debt instruments to be allowed to be transferred to any domestic sectors.
4. The FM has also asked the Securities and Exchange Board of India to consider raising the minimum public shareholding in listed companies to 30% from the existing 25%.
5. A social stock exchange for listing social enterprises and voluntary organisations has been proposed.
6. Women with Jan Dhan accounts to get Rs 5,000 overdraft facility and also get Rs 1 lakh loan under Mudra loans
7. The government will offer pension benefits to 3 crore shopkeepers under the new Pradhan Mantri Man Dhan Scheme