Finance minister Nirmala Sitharaman had her task cut out as she delivered her second budget today, with the Indian economy projected to grow at the slowest pace in a decade this fiscal year.
The budget speech came at a time when tax collections have been falling and the fiscal deficit widening. But apart from the fiscal math, Sitharaman's main challenge was to focus on jobs.
When Prime Minister Narendra Modi was vying for the top job in 2014, he had promised to create 10 million new jobs were he given a five-year mandate. He was, but the jobs never came. To the contrary, the country is staring at its worst jobs numbers in more than four decades.
This year’s economic survey, released just yesterday, sought to present before the government a framework, which it said, could lead to the creation of 80 million new jobs by 2030. So, in theory, Sitharaman knew what she had to do. What all did she announce in the budget? Here's a minute-by-minute snapshot of the proceedings on the budget day.
1:42 PM: Lok Sabha adjourned for the day.
1:40 PM: The FM finishes the budget speech. This appears to be the longest budget speech in India, at nearly two hours and 20 minutes.
1:38 PM: Budget proposes to increase customs duty on imported footwear and furniture.
1:35 PM: Stock markets slipping further into the red. The tax laws will likely hurt capital market inflows, at least in the short term. It remains to be seen how this will impact ELSS mutual fund schemes, for instance.
1:30 PM: Permament Account Number (PAN) to be instantly allotted on the basis of Aadhaar without any requirement of any more documents.
1:28 PM: Income Tax Act to be amended to mandate the CBDT to bring about a taxpayers’ charter.
1:27 PM: Proposes complete waiver on interest and penalty, if settled before March 31, 2020, and some additional amount thereafter.
1:25 PM: The FM proposes to bring a scheme to reduce litigation in cases of direct taxes, similar to a scheme for indirect taxes.
1:22 PM: Stock markets not impressed with the budget so far and extend fall. Sensex down more than 1% now.
1:20 PM: Turnover threshold for audits on MSMEs raised by five times.
1:19 PM: Budget proposes to defer on taxes on ESOPs given to startup employees.
1:17 PM: Startups get tax incentives, too.
1:15 PM: Concessional withholding rate for interest payments to foreign investors extended to 2023.
1:14 PM: Dividend distribution tax removed for companies. Dividends to be taxed in the hands of individuals, says the FM.
1:13 PM: The FM says around 70 of the 100-odd exemptions in the direct tax code have been removed. More to be removed in coming years.
1:12 PM: New tax regime will be optional, says the FM.
1:11 PM: Estimated revenue foregone following the new tax proposals at Rs 40,000 crore.
1:10 PM: Tax for those earning Rs 7.5-10 lakh reduced to 10% and those earning Rs 7.5-10 lakh to 15%. For earners between Rs 10-12.5 lakh, tax reduced to 20%. For those earning between Rs 12.5 lakh and Rs 15 lakh, tax brought down to 25%. But only for those who seek no exemptions.
1:05 PM: Budget proposes new regime for individual taxpayers with lower taxes who forego exemptions.
1:02 PM: Further reforms in the tax structure, says the FM.
1:00 PM: The FM finally comes to tax proposals. But first she cites the ancient Indian poet Kalidasa.
12:58 PM: Fiscal deficit estimated at 3.8% for 2019-20 and 3.5% for next financial year.
12:56 PM: Nominal GDP growth for 2020-21 estimated at 10%, says the FM.
12:54 PM: The FM proposes to list Life Insurance Corporation on stock exchanges.
12:52 PM: International bullion exchange to be set up at GIFT City in Gujarat.
12:50 PM: The FM says Rs 22,000 crore has “already been provided” as support for the National Infrastructure Pipeline (NIP).
12:49 PM: New Bharat Bond ETF proposed.
12:48 PM: Certain specified categories of government securities to be opened to non-resident investors, in a bid to deepen the bond market, the FM says.
12:46 PM: Scheme to provide subordinate debt to MSME promoters proposed.
12:44 PM: The National Pension Scheme trust for government employees to be separated from the pension fund regulator.
12:42 PM: Govt to divest remaining stake in IDBI Bank, says the FM.
12:40 PM: Deposit insurance cover to be increased to Rs 5 lakh from Rs 1 lakh.
12:38 PM: The FM talks about bank mergers announced last year and says government will encourage banks to tap into capital markets.
12:36 PM: “Data must have strong credibility,” says the FM as she talks of a new data collection policy.
12:34 PM: National Recruitment Agency proposed for common eligibility tests for recruitment to non-gazetted posts.
12:32 PM: “Tax harassment cannot be tolerated,” says the FM.
12:30 PM: Sitharaman comes to tax proposals. Taxpayers' charter to be enshrined as part of laws, she says.
12:26 PM: The FM reiterates that wealth creators will be respected.
12:24 PM: The FM proposes Rs 4,400 crore for “clean air” in cities.
12:21 PM: THe FM speaks about establishing a whole host of museums throughout the country. This should be music to historians’ ears.
12:20 PM: Indian Institute of Heritage and Culture proposed to be established.
12:19 PM: Government proposes a complete ban on manual scavenging.
12:18 PM: Rs 85,000 crore for SCs and other backward classes. Rs 53,700 crore proposed for STs
12:17 PM: Opposition benches interrupt the FM’s speech.
12:16 PM: Budget proposes Rs 35,600 crore for nutrition-related programmes for 2020-21.
12:14 PM: The FM says the “Beti bachao, beti padhao” scheme has yielded “tremendous results”. Says gross enrolment ratio of girls now higher than boys. Opposition benches not impressed.
12:12 PM: Two national-level science schemes proposed. Rs 8,000 crore for National Mission on Quantum Technology proposed.
12:10 PM: Fibre-to-home connections to link 1 lakh gram panchayats this year. Rs 6,000 crore allocated for Bharat Net programme for 2020-21.
12:09 PM: Sitharaman proposes new policy for private sector to set up data centre parks.
12:08 PM: The FM talks about new technologies like artificial intelligence, quantum computing etc. Data is the new oil, she says, adding analytics changing our lives.
12:07 PM: Propose to expand the National Gas Grid from 16,200 km to 27,000 km. Rs 22,000 crore allocated for power and renewable energy sector.
12:06 PM: 100 more airports to be developed by 2024. Air fleet to double to 1,200 by 2024.
12:05 PM: At least one major port to be corporatised and listed on the stock exchanges.
12:04 PM: More “Tejas-type” trains to connect cities.
12:03 PM: 12 lots of highway bundles of more than 12,000 km to be monetised to raise funds for the NHAI by 2024, the FM says.
12:02 PM: Development of 2,500 km of access-controlled highways, 9,000 km of other highways and 2,000 km of strategic highways proposed.
12:01 PM: The Rs 1.03 trillion National Infrastructure Pipeline, launched on December 31, is a “huge employment opportunity”, the FM says.
11:59 AM: National Logistics Policy to be released soon. It will create a single-window e-logistics market.
11:58 AM: Digital refunds proposed for duties levied on exporters, which are not getting refunded in any other way.
11:57 AM: The FM proposes to set up a National Police University and a national forensic science university.
11:55 AM: Sitharaman proposes a National Technical Textile Mission to reduce imports of technical textiles.
11:54 AM: The FM proposes Scheme to encourage manufacturing of mobile phones, electronic equipment and semiconductors. But no details yet. She says it can also be extended to manufacturing of medical devices.
11:52 AM: Five new smart cities proposed to be developed in PPP mode.
11:51 AM: Proposes to set up an investment clearance cell for "end-to-end" approvals.
11:50 AM: The FM now talking about commerce in ancient India. “Entrepreneurship has always been the strength of India,” she says. Opposition benches do not seem impressed.
11:49 AM: The FM proposes special training packages for nurses, teachers and care-givers who go abroad
11:47 AM: Medical colleges in PPP mode to be set up, attached district hospitals, says the FM.
11:45 AM: Proposes a "Study in India" programme. An “IND-SAT exam proposed for students from African and Asian countries who wish to study in Indian universities.
11:43 AM: Urban local bodies to provide internship to engineering students, the FM says.
11:41 AM: Rs 12,300 crore allocated for Swachh Bharat mission for 2020-21.
11:40 AM: Taxes from medical devices to be used to fund the viability gap funding for new hospitals under the PPP scheme.
11:38 AM: Viability gap funding window for setting up hospitals in the PPP mode for 112 “aspirational” districts that do not have a hospital empanelled under the Ayushman Bharat health insurance scheme.
11:36 AM: Allocated Rs 2.83 trillion for 2020-21 for agriculture, allied activities, rural development, panchayati raj and irrigation.
11:34 AM: Fish production to be raised to 200 lakh tonnes by 2023, the FM says.
11:33 AM: Milk processing capacity to be doubled by 2025 to 108 million tonnes, the FM says.
11:32 AM: NABARD refinance scheme to be expanded. Agriculture credit target for the next year set at Rs 15 trillion.
11:31 AM: Integrated farming systems in rain-fed areas to be expanded, the FM says.
11:30 AM: Railways to set up a “kisan rail” under a PPP arrangement to transport perishable goods. The aviation ministry to launch a "Krishi Udan" scheme.
11:28 AM: India has an estimated capacity of 162 million tonnes of agricultural warehousing. NABARD will take steps to geo-tag them. The government will provide viability gap funding for setting up warehouse buildings on a PPP model, as long as state governments can provide land, the FM says.
11:26 AM: The government will encourage “balanced use” all kinds of fertilisers and discourage the excessive use of chemical fertilisers.
11:24 AM: The government will halp 20 lakh farmers to set up solar pumps and 15 lakh more to connect their solar pumps to the grid, the FM says.
11:23 AM: The FM says the government proposing “comprehensive measures” for 100 water-stressed districts.
11:22 AM: The FM proposes 16 “action points” on agriculture reforms.
11:21 AM: The FM says financial inclusion has helped raise farm incomes.
11:20 AM: The farm market needs to be liberalised, says the FM.
11:19 AM: The FM now talking about agriculture, irrigation and rural development. Says government committed to the goal of doubling farmers’ incomes.
11:18 AM: The FM recites a small verse in Kashmiri, causing a flutter among the opposition benches.
11:15 AM: This budget has three main themes -- aspirational India including better health and education, economic development for all, and a caring society.
11:13 AM: “We shall strive to bring ease of living to every citizen,” the FM says.
11:10 AM: The FM says India lifted 271 million people out of poverty from 2006 to 2016.
11:08 AM: The FM says 40 crore GST returns filed so far, 16 lakh new taxpayers added.
11:06 AM: Reduced GST rates helped households lower expenses, says FM.
11:04 AM: Sitharaman says fundamentals of economy strong, GST maturing gradually.
11:00 AM: Sitharaman begins budget speech.
10:58 AM: The corporate tax cuts that the government had unveiled last year have not yet led to any real incremental capital expenditure and capacity addition. Most companies have used these extra savings to beef up their bottom lines and reduce debt.
10:55 AM: The Economic Survey advised the government to cut food subsidies, which typically benefit the bottom 20% of the country’s population. If the finance minister does choose to walk down this path, it could be politically imprudent.
10:52 AM: Falling tax revenues could force the finance minister’s hand in not extending any benefits to the common man. Even if she does tinker with direct tax rates or exemptions, she may well end up levying surcharges elsewhere.
10:50 AM: The budget could focus on generating non-tax revenue, mostly from disinvestment. The government is looking to sell national carrier Air India and oil refiner Bharat Petroleum Corp, among other companies.
10:45 AM: Since Sitharaman took over as the finance minister last year, from the late Arun Jaitley, she has chosen to go with the red ‘bahi khata’ and not the briefcase that Jaitley and finance ministers before him used.
10:40 AM: The finance minister meets president Ram Nath Kovind, and is now posing with the ‘bahi khata’ that contains her budget speech. Junior finance minister Anurag Thakur is seen praying.
10:30 AM: Typically, before the budget speech, the union cabinet formally approves the proposals, after which the finance minister goes to the president to appraise him of it.
10:20 AM: The budget documents have reached parliament, a full truck load of them. The finance minister’s speech is set to begin at 11 am.