Top Highlights from 2019 Budget Session by Interim Finance Minister Piyush Goyal
As mentioned earlier, the 2019 Interim Budget is a populist move from the government. The budget is mainly aimed at relieving the middle class and the salaried individuals. However, it has also relieved the workers from the unorganised sector.
The key highlights from the 2019 Interim Budget can be summed up as follows:
- Income tax to be exempted for individuals drawing an income of up to Rs.5 lakh.
- The standard deduction of Rs.40,000 has been raised to Rs.50,000.
- Rs.23,000 crore relief to be proposed through direct tax to offer relief to 3 crore taxpayers.
- A person will not be required to pay any income tax if they draw a gross income of up to Rs.6.5 lakh and make investments in insurance, specified savings, and provident funds.
- An assured yearly amount of Rs.6,000 to be provided to 12 crore small and marginal farmers under the PM-KISAN scheme.
- The Tax Deducted at Source (TDS) threshold to be raised from Rs.10,000 to Rs.40,000 for interest which is earned on deposits in banks and/or post offices.
- Tax exemption on notional rent on a second self-occupied house.
- The Tax Deducted at Source (TDS) threshold to be raised from Rs.1.8 lakh to Rs.2.4 lakh for the deduction of tax on rent.
- The tax benefits have been extended till 31 March 2020 for affordable housing.
- The tax exemption period extended from 1 year to 2 years for notional rent on unsold inventories.
- Rs.75,000 crore to be allocated for the financial year 2019-20 for the PM-KISAN scheme.
- Farmers to be provided with an interest subvention of 2% during disasters for the complete period of reschedulement of a loan.
- Farmers related to fisheries and animal husbandry activities to be provided with an interest subvention of 2%. An additional interest subvention of 3% to be provided in case of timely repayments.
- Under the PM Shram Yogi Maandhan Scheme, 10 crore workers belonging to the unorganised sector will be eligible to receive a monthly pension of Rs.3,000 with a contribution of Rs.100 or Rs.55 per month.
- The fiscal deficit has been fixed at 3.4% of GDP for 2019-20 with the target of making it 3% by 2020-21.
- The Current Account Deficit has been set at 2.5% of GDP for the financial year 2020.
- The total expenditure for the financial year 2020 to rise to Rs.27.84 lakh (rise by 13%).
- The allocation towards the National Education Mission to be increased to Rs.38,572 crore (rise by around 20%).
- The allocation towards the Integrated Child Development Scheme to be increased to Rs.27,584 crore (rise by more than 20%).
- Disinvestment target for financial year 2020 has been set at Rs.90,000 crore. The same target is likely to be met for the financial year 2018-19 which was set at Rs.80,000 crore.
- In order to meet the 10% reservation for the poor, the educational institutions will get 25% additional seats.
- Defence budget to be allocated at an all-time high of over Rs.3,00,000 crore.
- The allocation for the North East has been increased to Rs.58,166 crore for the financial year 2020 (rise by 21%).
- For the financial year 2020, railways department is set to get a capital support of Rs.64,587.
- The filmmakers of India to get single window clearance access for the purpose of easy shooting of films. The regulatory norms will mostly rely on self-declaration.
- For entities who are registered under the Goods and Services Tax (GST), 2% interest subsidy will be provided for MSMEs on incremental loans of Rs.1 crore.
- Out of the 25% sourcing for the government undertakings, a minimum of 3% will be from SMEs which are owned by women.
- Within a period of 5 years, 1 lakh villages are to be transformed into digital villages.
- New portal in order to support national programme on Artificial Intelligence (AI).
- Reforms and amendments to be made in stamp duty to make sure that a streamlined system is implemented for the levy of stamp duties which are to be imposed, as well as, collected at one place.
- With the intention of the betterment of 1.5 crore fishermen, a Department of Fisheries is to be created separately.
- The 22nd AIIMS planned to be set up in Haryana.
- An allocation of Rs.60,000 crores for MGNREGA in the year 2019-20.
- India to become a $5 trillion economy in the upcoming 5 years and a $10 trillion economy in the next 8 years.
Highlights on the basis of different sectors:
The highlights of the 2019 Interim Budget with regard to the different sectors can be summed up as follows:
- Economy: Interim Finance Minister Piyush Goyal said that India has already been validated as a hefty player in the global economy. It is also said to be one of the fastest growing economy. He added that for the current financial year, the Current Account Deficit (CAD) is to be cut down to 2.19% from 5.6%.
- Anti-corruption: The Interim Finance Minister has also pitched in for more transparency with reference to the coal block auction and spectrum auction.
- Housing and electricity: The Interim Finance Minister has claimed that the government has built 1.53 crore houses under the housing scheme. He added that under the Saubhagya Yojana, almost every house has been provided with an electricity connection for free.
- Farming: The amount of Rs.6,000 which is to be allocated for the farmers, as mentioned above, will be transferred to their bank accounts in 3 instalments. It can be availed by any farmer who holds less than 2 hectares of land. An estimated amount of Rs.75,000 crore will be spent by the government for this scheme.
- For the common man: The contribution for new pension schemes under the EPFO has been bumped up to 14% from 4%. The Interim Finance Minister also said that the gratuity limit has been to Rs.30 lakh from Rs.10 lakh.
- For women: The Interim Finance Minister said that the central government is prioritising women. He claimed that 75% of the total women are enrolled as beneficiaries under the Pradhan Mantri Mudra Yojana. He added that the women are entitled to 26 weeks of maternity leave.
- For workers belonging to the unorganised sector: Under the Pradhan Mantri Shram Yogi Mandhan pension scheme launched by the government, the workers who belong to the unorganised sector will be eligible to draw a pension of Rs.3,000 every month after the age of 60 years.
- Defence: The defence budget for 2019 has been set at more than Rs.3 lakh crore. Thus, the defence budget has hit an all-time high. The Interim Finance Minister also added that Rs.35,000 crore has been allocated under the ‘One Rank One Pension’ scheme for the soldiers.
- Income Tax: The interim Interim Finance Minister said that the direct tax collection has been increased from Rs.6.38 lakh crore to Rs.12 lakh crore. He also added that the income tax returns will now be processed within 24 hours and the refunds will be initiated accordingly.
Top Highlights Budget Session for FY 2018-2019 by Finance Minister, Arun Jaitley
The 2018 Union Budget was presented by the Finance Minister Arun Jaitley, on 1 Feb 2018. This is the first budget after the introduction of prominent reforms in the Indian economy, such as the Goods and Services Tax implementation, mega PSU bank recapitalisation, and dynamic fuel pricing.
The key features of the Union Budget 2018 are as described below:
- Fiscal situation - In 2018-19, the government is aiming for fiscal deficit target of 3.3% of the GDP.
- Agriculture - The main points highlighted in the segment of agriculture were as follows:
- The government resolves to increase the income of farmers to double the current value and hike the minimum support price (MSP) for Kharif crops to 1.5 times the value of production. The government will provide the right prices to farmers in case they receive lower market prices than the MSP.
- Organic farming and cluster development model for agriculture will be encouraged.
- Allocation of Rs.500 crore is provided to Operation Green.
- Agricultural segments of bamboo farming, fisheries, and animal husbandry will be encouraged.
- Rs.11 lakh crore will be offered as credit to the farming sector.
- Rural - The main points highlighted in the rural segment were as follows:
- Gas connections will be introduced in the households of 6 crore rural women.
- Rs.16,000 crore has been set aside for the Pradhan Mantri Saubhagya Yojana. This would provide free electricity to 4 crore rural households.
- The Swachh Bharat Mission will be extended to offer 2 crore toilets to rural houses.
- Under the Pradhan Mantri Awas Yojana, 51 lakh houses will be constructed in the rural areas.
- Loans for women’s self-help groups has increased to Rs.75,000 crore.
- For housing, livelihood, and infrastructure projects in the rural areas, the government has allocated a total amount of Rs.14.34 lakh crore.
- Health and Education - The main points highlighted were as follows:
- Focus will be on incorporating technology into education.
- By the year 2022, every block that houses more than 20,000 tribals and over 50% scheduled tribes will witness the inauguration of an Eklavya school.
- The government will shift to a structure wherein universal health coverage will be offered to citizens.
- Proposal for 2 new schools of infrastructure and planning has been laid down.
- To reduce brain drain, top performers from leading engineering schools will be selected and given an opportunity to study at IIScs and IITs.
- 60 crore bank accounts will be brought under the Jan Dhan Yojana.
- There is a proposal for the allocation of Rs.1 lakh for the overall strengthening of the education sector in the country.
- At least one medical college will be present for three parliamentary constituencies.
- There is an allocation of Rs.52,719 crore for the welfare of the scheduled castes in the country.
- Industry - The provisions under this section are as follows:
- The Finance Minister has set aside Rs.3,794 crore as industry subsidy and capital support for the Micro, Small, and Medium Enterprises (MSME) sector.
- Excise cut on fuel has been announced.
- Railways - The reservations for this sector include the following:
- The total capital expenditure that is set for the Indian Railways comes up to Rs.1,48,528 crore.
- The infrastructure of some railway stations will be revamped, with escalators making an entry in all stations with footfall of 25,000 passengers.
- All trains will be installed with CCTV cameras and WiFi connectivity.
- Allocation for Bengaluru Metro is Rs.17,000 crore and that for Mumbai rail network is Rs.11,000 crore.
- Taxation - The highlights of this segment are as follows:
- There will not be any changes to the income tax rates for individuals in the salaried class.
- Salaried taxpayers will have standard deduction of Rs.40,000.
- Long-term capital gains will be taxed at 10% for investments that are above Rs.1 lakh. Short-term capital gains tax will remain at 15%.
- Tax exemption limit has been raised to Rs.50,000 on interest income for bank deposits of senior citizens. Exemption limit for income from post office schemes and bank FDs will be 10%.
- Infrastructure - The reservations in the infrastructure realm are as follows:
- 10 key tourist spots in the country will be elevated to the level of iconic tourist destinations.
- “Pay as you see” system will be introduced in relation to toll payments on highways.
- An outlay of Rs.5.35 lakh crore has been announced for phase 1 of the Bharatmala project.
- Trade - The provisions under this sector include the following:
- Hike in customs duty on televisions and mobile phones has been announced to promote the Make in India initiative.
- Imports will be imposed a 10% social welfare surcharge.
- Employment - The government will ensure the contribution of 12% of salary of fresh employees towards the Employee Provident Fund scheme for 3 years. The contribution of women in this regard has been decreased to 8% for the first 3 years.
- Defence - The total outlay for this sector is Rs.2.95 lakh crore. The Finance Minister said that there will be a boost in the defence manufacturing segment to promote the Make in India initiative.
- Technology - The Digital India programme will receive an allocation of Rs.3,073 crore. Up to 5 lakh WiFi connections will be installed to provide broadband coverage to 5 crore citizens in the rural parts of the country. The amount allocated for this purpose is Rs.10,000 crore. The government also looks to prevent the circulation of cryptocurrencies.
- Finance, markets, and insurance - The government will encourage angel investors and venture capital financing. Large corporations will have to meet one-fourth of their debt requirements from bond markets. National Insurance Co., Oriental Insurance Co, and United India Assurance Co. will undergo a merger to form one listed entity.
- Aviation - Capacities of airports will be increased to 5 times the current value. The UDAN scheme will ensure that 64 airports across the length and breadth of the country will be connected through air to boost low cost flying.
- Miscellaneous - The subsidy for food has been hiked to Rs.1.69 lakh crore in 2018-19. The emoluments of MPs may see an increase on the basis of index to inflation.
Union Budget 2018 Expectations
Being the last Union Budget of the BJP led NDA government, before commencement of the 2019 general elections, the nation eagerly awaits a series of unpredicted as well as expected changes.
Finance Minister, Arun Jaitley is all set to roll out the final full budget of the BJP government on February 1st 2018. The Budget of 2018 primarily encompasses two main components:
- The first part of it mainly deals with various outlays and schemes for the already existing sectors
- The second part concentrates on the aspects of direct and indirect taxes
As the era of indirect taxes and a nationalist bourgeoisie pre-Independence decade come to a screeching halt, the nation cheers for the single unified tax regime that has come as a boon to its people. This year’s Union Budget is supposed to focus on factors surrounding petroleum and electricity, that still remain outside the scope of GST.
Union Budget of 2018 Comes at a Crucial Point in Time
The current year’s budget session has arrived at a very crucial time since the Modi government made two very important financial decisions in the previous years. Demonetisation and GST implementation have both put tremendous pressure on the entire outcome of the Union Budget of 2018.
Time of Commencement of the Union Budget
The Union Budget session this year will commence from January 29th 2018, while its first phase will materialise between January 29 to February 9 2018. Post the first session, the second session of the Budget can be expected to surface between March 5 and April 6 2018. Between the space of time of the two sessions, it will be expected from the standing committees to clear all budgetary proposals. The session is expected to start at 9 am in the morning with Arun Jaitley presiding over the entire meeting.
The Agro-Sector is Expected to Benefit from the Union Budget of 2018
The Indian economy’s backbone is its agro-sector, that provides employment to more than 50% of the total manpower in India and makes a 20% contribution to the country’s GDP. The Union Budget of 2018 can be easily considered a revolutionary change in terms of rural initiatives and agricultural policies. The Government of India, post the budget release, is expected to increase its focus on agrarian growth, market reforms and to effectively ensure that farmers get their due for the produce of the year.
In order to double a single farmer’s income in India, there are a couple of things that must act as sine qua nons after the Budget has been released:
- The dairy sector must be at par with the agricultural sector. Since there is a 30% percent contribution from animal husbandry and the dairy sector to the country’s total GDP, the dairy sector must be allocated more funds during the Budget session where attractive schemes and stratagems are brought into action. This, in turn will lead to an overall growth of the Indian people. Like the agricultural sector, the dairy sector must also be exempted from tax for increased profit.
- Vegetables, fruits and other dairy products have the potential to grow 3-4 times at once. Hence, the focus on these elements must be increased in order to generate more produce. To cope with the challenges of the future, the Indian Government must invest in an infrastructure for processing milk to assist in increasing farmers’ income.
- To make sure that the agricultural sector is growing in a holistic manner, the government needs to integrate a few components efficiently. An amalgamation of agrarian norms, less regulation of non-farm incomes and a substantial promotion of rural employment schemes and policies are sure to upgrade the operations of the rural sector by a great amount.
- The agricultural sector is expected to attract increased outlays in terms of budgeting. Multiple reforms such as the “Pradhan Mantri Fasal Bima Yojana”, electronic trading facilities are sure to aid in reviving the rural sector, comprehensively.
Maternity Scheme Boost is Improbable
As per the Union Budget of 2018, the Maternity Benefit Programme is particularly less likely to make the cut in the current year. The Ministry of Women and Child Development has evidently not sought after any increase in the amount of money received by pregnant and lactating mothers on the birth of the first child. Even though it is considered the need of the hour by many, this sector is improbable to get a fiscal cut this year.
Taxpayers’ Expectation from the Finance Minister Regarding the Union Budget of 2018
A collection of expectations and grievances have been claimed to grab the Finance Minister’s attention.
- Making the NPS a tax-free entity: Unlike the Budget of 2017, taxpayers of this era are hoping to get a significant cut in the NPS scheme since the tax treatment of this corpus is a major deterrent. If the scheme adapts features of the EEE, taxpayers will most likely make a shift and invest their savings in the NPS scheme.
- Allowance of deduction on interests paid for home loans for properties that are still under construction: There must be an enhancement in the Rs.2 lakh cap on the interest benefits pertaining to home loans. Rs.2 lakh interest indicates a Rs.22 lakh loan, whereas in India a basic two-bedroom apartment/flat costs much more than that.
- An increment in the least exemption limit: Many taxpayers hold the belief that Provident Fund, as an entity must be a separate element for taxation purposes, without any limits per se. Subtracting the entity of PF from Section 80C of the Income Tax Act will in turn allow taxpayers to invest and optimally utilise the Section (80C).
- Term Increment for Deduction of Taxes on Education Loans: At present, if you are paying interests on an education loan, you can claim its deduction only for eight fiscal years. In order to stay at par with home loans, this time period must be increased to the full tenure of the loan. Additionally, the buffer period (period in which an individual is expected to pay off the loan) must be scrutinised and thereby increased to 18 months, instead of 6 months.
- Pensions must be rendered tax-free: For retired senior citizens not having any other source of income, except pension, the entire amount must be rendered tax-free! If there is an increase in the interest rate for savings schemes pertaining to senior citizens, it will hugely benefit them in the long run.
Being the last budget of the BJP government, the nation has set extremely high hopes from the Finance Minister!
Highlights of the Union Budget 2017
The 2017 Union Budget mainly focussed on the following themes:
- The farming sector
- Rural population
- Healthcare for the poor and underprivileged
- Public services
- Financial sector
- Fiscal management
- Speedy accountability
- Honest tax administration
The highlights of the budget are as detailed below:
- A sum of Rs.10 lakh was allocated to the welfare of farmers. This also had 60 days of interest waiver benefits.
- The National Bank for Agriculture & Rural Development (NABARD) fund was hiked to Rs.40,000 crore.
- The government initiated the set up of mini labs for testing the soil in Krishi Vigyan Kendras.
- NABARD also received a micro irrigation fund with an initial corpus of Rs.5,000 crore.
- There was increase in reservations for the irrigation corpus and the dairy industry.
- The government aimed at bringing 1 crore families out of poverty by the year 2019.
- More than Rs.3 lakh crore was allocated for rural developments. The government also took steps to ensure the increased participation of women in the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
- The government initiated the creation of 1 crore houses for the poor and set the scene for rural electrification projects.
- An amount of Rs.1,84,632 crore was set aside for the welfare of children and women.
- The government proposed to set up a Skill India mission to maximise the potential of the youngsters in the country.
- Steps were also taken to create 5,000 new PG seats each year.
Highlights of the Union Budget 2016
The Union Budget 2016 laid focus on the following segments:
- Social initiatives
- Personal finance
- Infrastructure and investments
The budget was marked by the following provisions:
- A new health protection scheme was introduced with a cover of up to Rs.1 lakh per family.
- Senior citizens received additional cover of Rs.30,000 for healthcare needs.
- Pradhan Mantri Jan Aushadhi Yojana was reinforced with the opening of 300 new generic drug stores.
- A new scheme was introduced that would focus on getting Rs.500 crore for the promotion of entrepreneurship among the Scheduled Castes and Tribes.
- 10 private and 10 public sector educational institutions were elevated to offer world-class facilities.
- Rs.1,700 crore was set aside for the creation of multi-skill development centres.
- 62 new Navodaya Vidyalayas were opened to offer premium educational facilities to the youth.
- Plans were made to upskill 1 crore youngsters under the Pradhan Mantri Kaushal Vikas Yojana.
Infrastructure and investments:
- Rs.27,000 crore was set aside for work on roadways.
- Proposal was made to create new greenfield ports on the eastern and western coasts of the country.
- Proposal was made for 100% foreign direct investment towards the marketing of food products that were produced and sold in India.
Highlights of the Union Budget 2015
The 2015 Union Budget focussed mainly on the following sectors:
- Renewable energy
- Welfare schemes
- Financial sector
The budget is notable for the following recommendations:
- Rs.25,000 crore was set aside for the Rural Infrastructure Development Bank.
- The target for farmer’s credit was Rs.8.5 lakh crore.
- Rs.5,300 crore was allocated to support Micro Irrigation programme.
- A proposal was made to set up AIIMS in Jammu and Kashmir, Tamil Nadu, Punjab, Bihar, Himachal Pradesh, and Assam.
- Setting up of PG Institute of Horticulture in Amritsar was proposed.
- Funds were allocated to set up a university that would specialise in disability studies in Kerala.
- Proposal was made to set up IIM in Andhra Pradesh and Jammu and Kashmir.
- Allocation of Rs.70,000 crore was made for the infrastructure segment.
- Allocation of Rs.150 crore was made for the establishment of the Atal Innovation Mission. This would optimise the expertise of researchers and entrepreneurs to foster innovations in science and technology.
- The government proposed to establish 5 ultra-mega power projects, each generating 4,000 MW of power.