“Essentially, the goal is to build a self-reliant India that is why the Economic Package is called Aatma Nirbhar Bharat Abhiyaan. Our focus would be on land, labour, liquidity and law,” she said adding, “Beginning today, for the next few days, I shall be coming here with the entire team of the Ministry of Finance to detail the PM’s vision for Aatma Nirbhar Bharat”.

Sitharaman announced measures focused on Getting back to work -enabling employees and employers, businesses, especially Micro Small and Medium Enterprises, to get back to production and workers back to gainful employment. Efforts to strengthen Non-Banking Finance Institutions (NBFCs), Housing Finance Companies (HFCs), Micro Finance Sector and Power Sector were also unfolded. Other than this, the tax relief to business, relief from contractual commitments to contractors in public procurement and compliance relief to real estate sector were also covered.

Following measures were announced on Wednesday:-

1. Rs 3 lakh crore Emergency Working Capital Facility for Businesses, including MSMEs

To provide relief to the business, additional working capital finance of 20% of the outstanding credit as on 29 February 2020, in the form of a Term Loan at a concessional rate of interest will be provided. This will be available to units with up to Rs 25 crore outstanding and turnover of up to Rs 100 crore whose accounts are standard. The units will not have to provide any guarantee or collateral of their own. The amount will be 100% guaranteed by the Government of India providing a total liquidity of Rs. 3.0 lakh crores to more than 45 lakh MSMEs.

2. Rs 20,000 crore Subordinate Debt for Stressed MSMEs

Provision made for Rs. 20,000 cr subordinate debt for two lakh MSMEs which are NPA or are stressed. Government will support them with Rs. 4,000 Cr. to Credit Guarantee Trust for Micro and Small enterprises (CGTMSE). Banks are expected to provide the subordinate-debt to promoters of such MSMEs equal to 15% of his existing stake in the unit subject to a maximum of Rs 75 lakhs.

3. Rs 50,000 crores equity infusion through MSME Fund of Funds

Govt will set up a Fund of Funds with a corpus of Rs 10,000 crore that will provide equity funding support for MSMEs. The Fund of Funds shall be operated through a Mother and a few Daughter funds. It is expected that with leverage of 1:4 at the level of daughter funds, the Fund of Funds will be able to mobilise equity of about Rs 50,000 crores.

4. New definition of MSME

Definition of MSME will be revised by raising the Investment limit. An additional criteria of turnover also being introduced. The distinction between manufacturing and service sector will also be eliminated.

5. Other Measures for MSME

e-market linkage for MSMEs will be promoted to act as a replacement for trade fairs and exhibitions. MSME receivables from Government and CPSEs will be released in 45 days

6. No Global tenders for Government tenders of up to Rs 200 crores.

General Financial Rules (GFR) of the Government will be amended to disallow global tender enquiries in procurement of Goods and Services of value of less than Rs 200 crores

7. Employees Provident Fund Support for business and organised workers

The scheme introduced as part of PMGKP under which Government of India contributes 12% of salary each on behalf of both employer and employee to EPF will be extended by another 3 months for salary months of June, July and August 2020. Total benefits accrued is about Rs 2500 crores to 72.22 lakh employees.

8. EPF Contribution to be reduced for Employers and Employees for 3 months

Statutory PF contribution of both employer and employee reduced to 10% each from existing 12% each for all establishments covered by EPFO for next 3 months. This will provide liquidity of about Rs.2250 Crore per month.

9. Rs 30,000 crores Special Liquidity Scheme for NBFC/HFC/MFIs

Government will launch Rs 30,000 crore Special Liquidity Scheme, liquidity being provided by RBI. Investment will be made in primary and secondary market transactions in investment grade debt paper of NBFCs, HFCs and MFIs. This will be 100 percent guaranteed by the Government of India.

10. Rs 45,000 crores Partial credit guarantee Scheme 2.0 for Liabilities of NBFCs/MFIs

Existing Partial Credit Guarantee scheme is being revamped and now will be extended to cover the borrowings of lower rated NBFCs, HFCs and other Micro Finance Institutions (MFIs). Government of India will provide 20 percent first loss sovereign guarantee to Public Sector Banks.

11. Rs 90,000 crore Liquidity Injection for DISCOMs

Power Finance Corporation and Rural Electrification Corporation will infuse liquidity in the DISCOMS to the extent of Rs 90000 crores in two equal instalments. This amount will be used by DISCOMS to pay their dues to Transmission and Generation companies. Further, CPSE GENCOs will give a rebate to DISCOMS on the condition that the same is passed on to the final consumers as a relief towards their fixed charges.

12. Relief to Contractors

All central agencies like Railways, Ministry of Road Transport and Highways and CPWD will give extension of up to 6 months for completion of contractual obligations, including in respect of EPC and concession agreements

13. Relief to Real Estate Projects

State Governments are being advised to invoke the Force Majeure clause under RERA. The registration and completion date for all registered projects will be extended up to 6 months and may be further extended by another 3 months based on the State’s situation. Various statutory compliances under RERA will also be extended concurrently.

14. Tax Relief to Business

The pending income tax refunds to charitable trusts and non-corporate businesses and professions including proprietorship, partnership and LLPs and cooperatives shall be issued immediately.

15. Tax related measures

• Reduction in Rates of ‘Tax Deduction at Source’ and ‘Tax Collected at Source” – The TDS rates for all non-salaried payment to residents, and tax collected at source rate will be reduced by 25 percent of the specified rates for the remaining period of FY 20-21.This will provided liquidity to the tune of Rs 50,000 Crore.
• The due date of all Income Tax Returns for Assessment Year 2020-21 will be extended to 30 November, 2020. Similarly, tax audit due date will be extended to 31 October 2020.
• The date for making payment without additional amount under the “Vivad Se Vishwas” scheme will be extended to 31 December, 2020.

New Delhi: The Union Finance & Corporate Affairs Minister Niramla Sitharaman on Thursday announced Rs 1.70 Lakh Crore relief package under Pradhan Mantri Garib Kalyan Yojana for the poor to help them fight the battle against Corona Virus. While addressing the press conference, Sitharaman said “Today’s measures are intended at reaching out to the poorest of the poor, with food and money in hands, so that they do not face difficulties in buying essential supplies and meeting essential needs.”

Following are the components of the Pradhan Mantri Garib Kalyan Package: —

PRADHAN MANTRI GARIB KALYAN PACKAGE

1. Insurance scheme for health workers fighting COVID-19 in Government Hospitals and Health Care Centres

• Safai karamcharis, ward-boys, nurses, ASHA workers, paramedics, technicians, doctors and specialists and other health workers would be covered by a Special insurance Scheme.
• Any health professional, who while treating Covid-19 patients, meet with some accident, then he/she would be compensated with an amount of Rs 50 lakh under the scheme.
• All government health centres, wellness centres and hospitals of Centre as well as States would be covered under this scheme approximately 22 lakh health workers would be provided insurance cover to fight this pandemic.

1. PM Garib Kalyan Ann (अन्न) Yojana

• Government of India would not allow anybody, especially any poor family, to suffer on account of non-availability of food grains due to disruption in the next three months.
• 80 crore individuals, i.e, roughly two-thirds of India’s population would be covered under this scheme.
• Each one of them would be provided double of their current entitlement over next three months.
• This additionality would be free of cost.

Pulses:

• To ensure adequate availability of protein to all the above mentioned individuals, 1 kg per family, would be provided pulses according to regional preferences for next three months.
• These pulses would be provided free of cost by the Government of India.

III. Under Pradhan Mantri Garib Kalyan Yojana,

Benefit to farmers:

• The first instalment of Rs 2,000 due in 2020-21 will be front-loaded and paid in April 2020 itself under the PM KISAN Yojana.
• It would cover 8.7 crore farmers

1. Cash transfers Under PM Garib Kalyan Yojana:

Help to Poor:

• A total of 20.40 crores PMJDY women account-holders would be given an ex-gratia of Rs 500 per month for next three months.

Gas cylinders:

• Under PM Garib Kalyan Yojana, gas cylinders, free of cost, would be provided to 8 crore poor families for the next three months.

Help to low wage earners in organised sectors:

• Wage-earners below Rs 15,000 per month in businesses having less than 100 workers are at risk of losing their employment.
• Under this package, government proposes to pay 24 percent of their monthly wages into their PF accounts for next three months.
• This would prevent disruption in their employment.

Support for senior citizens (above 60 years), widows and Divyang:

• There are around 3 crore aged widows and people in Divyangcategory who are vulnerable due to economic disruption caused by COVID-19.
• Government will give them Rs 1,000 to tide over difficulties during next three months.

MNREGA

• Under PM Garib Kalyan Yojana, MNREGA wages would be increased by Rs 20 with effect from 1 April, 2020. Wage increase under MNREGA will provide an additional Rs 2,000 benefit annually to a worker.
• This will benefit approximately 13.62 crore families.

1. Self-Help groups:

• Women organised through 63 lakhs Self Help Groups (SHGs) support 6.85 crore households.

1. Limit of collateral free lending would be increased from Rs 10 to Rs 20 lakhs.

1. Other components of PM Garib Kalyan package

Organised sector:

• Employees’ Provident Fund Regulations will be amended to include Pandemic as the reason to allow non-refundable advance of 75 percent of the amount or three months of the wages, whichever is lower, from their accounts.
• Families of four crore workers registered under EPF can take benefit of this window.

Building and Other Construction Workers Welfare Fund:

• Welfare Fund for Building and Other Constructions Workers has been created under a Central Government Act.
• There are around 3.5 Crore registered workers in the Fund.
• State Governments will be given directions to utilise this fund to provide assistance and support to these workers to protect them against economic disruptions.

District Mineral Fund

• The State Government will be asked to utilise the funds available under District Mineral Fund (DMF) for supplementing and augmenting facilities of medical testing, screening and other requirements in connection with preventing the spread of CVID-19 pandemic as well as treating the patients affected with this pandemic.

New Delhi: Commenting on various flexibilities announced by the Finance Minister amidst COVID-19 challenges, Sharad Kumar Saraf, President, FIEO said that the relaxation given in compliance and regulations in Direct and Indirect tax matters, MCA, IBC Code etc. are pragmatic and will ease the operational problem of tax payers. The extension of Dispute settlement scheme in Income Tax, Central Excise and Service till 30^th June, 2020 will help the assesses to avail it as lockdown was imposing a big challenge to avail it by 31^st March, 2020.

The operation of Customs clearance at all ports on 24X7 basis till 30th June, 2020 is most welcome yet all allied agencies (statutory agencies, shipping lines, CHAs etc) should align their timings with Customs so that actual gain flows to the industry observed Saraf.

Extension of all Sanitary Import Permits (SIPs) expiring between 1^st March and 30^th April, 2020 by three months, condonation of delayed imports by 30 days, reduction in time period of verification and grant of NOC from 7days to 3 days etc. will benefit the Marine Sector, which is already feeling the pinch amidst Corona crisis with drop in demand said FIEO Chief.

Extension in time limit and procedure in various schemes of the Department of Commerce, though not yet detailed, should recognize the challenges faced by exporters/ importers thus giving adequate time to complete the export obligation (in view of slowdown in demand) and effect imports (faced with supply-side disruptions) opined Saraf.

He also demanded that exports may be covered as “essential services” in view of tight delivery schedule thereby allowing factories and other stakeholders to operate, during lock down, with minimal workforce.

The Finance Minister proposed setting up of an Investment Clearance Cell that will provide “end to end” facilitation and support to create more opportunities to youth and remove road-blocks. She also proposed to develop five new smart cities in collaboration with States in PPP mode and such sites would be chosen that offer the best choices in terms of aforementioned principles.

Smt. Nirmala Sitharaman said that electronics manufacturing industry is very competitive and the potential in job creation is immense. She further said that India needs to boost domestic manufacturing and attract large investments in the electronics value chain. She proposed a scheme to encourage manufacture of mobile phones, electronic equipment and semi-conductor packaging. She also proposed a National Technical Textiles Mission with a four-year implementation period from 2020-21 to 2023-24 at an estimated outlay of Rs. 1480 crore to position India as a global leader in Technical Textiles.

She referred the Prime Minister’s call from Red Fort about quality and standards when he spoke of “Zero Defect-Zero Effect” manufacturing. All Ministries, during the course of this year, would be issuing quality standard orders, she added.

The Finance Minister announced a new scheme NIRVIK to achieve higher export credit disbursement, which provides for higher insurance coverage, reduction in premium for small exporters and simplified procedure for claim settlements.  She further said that by the end of 5th year, this Scheme is expected to support export of around Rs 30 lakh crore. She proposed to digitally refund to exporters, duties and taxes levied at the Central, State and local levels, such as electricity duties and VAT on fuel used for transportation, which are not getting exempted or refunded under any other existing mechanism.

Smt. Sitharaman said that Government e-Marketplace (GeM) is moving ahead for creating a Unified Procurement System in the country for providing a single platform for procurement of goods, services and works. She proposed to take the turnover of GeM to Rs. 3lakh crores. She also proposed to provide Rs. 27300 crore for development and promotion of Industry and Commerce for the year 2020-21.

New Delhi: Reiterating Prime Minister’s commitment towards “Sabka Saath, Sabka Vikas , Sabka Vishwas” and “Ease of Living” for people of India, Union minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman in her budget speech in Parliament today proposed 16 action points focusing on doubling Farmers income, Horticulture sector, Food storage, Animal Husbandry and Blue economy.

Doubling Farmers Income

With the aim of doubling farmers income by 2022, Smt. Sitharaman in her budget speech proposed to expand PM-KUSUM to 20 lakh farmers for setting up stand alone solar pumps and help another 15 lakh farmers solarise their grid connected pump sets. She further proposed to operationalize scheme to enable farmers to set up solar power generation capacity on their fallow/barren lands and to sell it to grid. Resource efficiency is the first step in doubling farmer’s income and keeping this in mind Smt. Sitharaman further stressed to encourage balanced use of all kinds of fertilizers and Zero Budget Natural Farming (ZBNF). She further proposed integration of negotiable warehousing receipts (e-NWR) and National Agricultural Market (e-NAM).

“Integrated farming systems for rainfed areas shall be expanded. Multi-tier cropping, bee keeping, solar pumps, solar energy production in non cropping season will be added. The portal on “Jaivik kheti” – online national organic products market will also be strengthened” Smt. Sitharaman said.

To address concerns related to water stress in various parts of the country, Finance Minister said “our government is proposing comprehensive measures for one hundred water stressed districts”.

Storage and Logistics

To promote storage infrastructure and reduce wastage of food grains Smt. Sitharaman proposed creation of warehouses through viability gap funding on a PPP mode at block level. She also proposed warehouse building by Food Corporation of India (FCI) and Central Warehousing Corporation (CWC) on their land too. As a backward linkage, Smt. Sitharaman proposed village storage scheme to be run by Self Help Groups (SHG). “Women, SHG’s shall regain their position as Dhaanya Lakshmi”said Smt. Nirmala Sitharaman.

To build a seamless national cold supply chain for perishables, inclusive of milk, meat, Smt. Sitharaman said, “Indian Railways will set up Kisan Rail-through PPP arrangements. There shall be refrigerated coaches in express and freight trains as well”. “To help improve value realization especially in North-East and tribal districts Krishi Udaan will be launched by the Ministry of Civil Aviation” added the Finance Minister.

Animal Husbandry

Recognizing the contribution of animal husbandry sector in farmer’s income, Smt. Sitharaman aimed to eliminate Foot and Mouth disease, brucellosis in cattles and peste des petits ruminants (PPR) in sheep and goat by 2025 and to increase coverage of artificial insemination from 30 percent to 70 percent. “we shall facilitate doubling of milk processing capacity from 53.5 million MT to 108 million MT by 2025” said Smt. Sitharaman.

Agriculture credit

Setting agriculture credit target of rupees 15 lakh crore for the year 2020-21. She stated that all eligible beneficiaries of Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) will be covered under the Kisan Credit Card (KCC) scheme. 

Horticulture

On horticulture, she said “For better marketing and export, we propose supporting states which, adopting a cluster basis will focus on one product one district”

Blue Economy

Smt. Sitharaman proposed to put in place a framework for development, management and conservation of marine fishery resources and promotion of algae, sea weed and cage culture that will assist in raising fish production to 200 lakh tonnes by 2022-23. In her budget speech she said that “our government will involve youth in fishery extension through 3477 sagar mitras and 500 fish farmer producer organizations. We hope to raise fishery export to rupees 1 lakh crore by 2024-25”.

New Delhi: To make India an attractive destination for both international and domestic tourists, the Finance Minister proposed to allocate Rs 2,500 crores in 2020-21 for the tourism sector. Besides tourism, Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman also proposed to allocate Rs 3,150 crore for Ministry of Culture while presenting the Union Budget 2020-21 in Parliament today.

In order to have well-trained resources in the disciplines of museology and archeology, the Finance Minister proposed to establish first Indian Institute of Heritage and Conservation with the status of a deemed university to operate under the Ministry of Culture. She said, “Acquisition of knowledge in disciplines such as museology and archeology are essential for collecting and analysing scientific evidence of such findings and for dissemination through high quality museums.”

Highlighting improved tourism revenues due to better rank, the Finance Minister said, “India had moved up from rank 65 in 2014 to 34 in 2019 in the Travel & Tourism Competitive Index (World Economic Forum).” Due to this, she continued, “Foreign Exchange earnings grew 7.4% to Rs 1.88 lakh crores for the period January 2019 from Rs 1.75 lakh crores.”

In a major bid to revitalise tourism, Smt. Sitharaman proposed 8 new museums, which includes building infrastructure around 5 Iconic Sites, besides proposing renovation of 5 major museums across the length and breadth of India.

The Union Finance Minister proposed the following:

• 5 Archeological sites to be set-up/developed as Iconic Sites with on-site Museums at the following locations:
• Rakhigarhi (Haryana)
• Hastinapur (Uttar Pradesh)
• Shivsagar (Assam)
• Dholavira (Gujarat)
• Adichanallur (Tamil Nadu)
  • Maritime Museum to highlight Harappan Age at Lothal, Ahmedabad, by Ministry of Shipping
  • KOLKATA:
    • Indian Museum: Re-curation of the oldest museum in India as announced by Prime Minister Narendra Modi in January 2020.
    • Numismatics and Trade Museum to be located in the historic Old Mint Building
•  
  • Support for setting up Tribal Museum in Ranchi (Jharkhand)
  • Renovation and re-curation of 4 more museums across India

Recognising the role of States in the proposed scheme for growth and employment generation, Smt. Sitharaman said, “Growth of tourism directly relates to growth and employment. States have a critical role to play. I expect State Governments expected to develop a roadmap for certain identified destinations and formulate financial plans during 2021 against which specified grants will be made available to the States in 2020-21”. 

Emphasising need for efficiency of India Sea Ports and use of technology to improve their performance, Smt Nirmala Sitharaman, said “The government would consider corporatizing at least one major port and subsequently its listing on the stock exchanges.”

Speaking about Inland Waterways, the Finance Minister also announced that the “Jal Vikas Marg” on National Waterway-1 will be completed and further the 890 Km Dhubri-Sadiya connectivity will be done by 2022”.

Smt Sitharaman further said that Plans are afoot on “Arth Ganga”- PM’s vision to energise economic activity along the river banks. In order to boost the transport Infrastructure in the country the Union Budget has provided for about Rs 1.70 Lakh Crore. 

Impetus to Civil Aviation Sector

The Finance Minister also announced that 100 more airports would be developed by 2024 to support Udaan scheme. She also remarked in her Budget presentation that India’s Air traffic has grown rapidly as compared to global average and the Air fleet number was expected to go up from the present 600 to 1200 during this time.

In the direction of doubling farmers’ income by 2022, among other measures, the Finance Minister also announced launch of “Krishi Udaan” by the Ministry of Civil aviation on International & National routes. This is aimed to help improve value realisation especially in North-East and Tribal districts.

Power and Renewable Energy

The Union Finance Minister, also proposed an allocation of Rs. 22000 crore for Power and Renewable Energy sector in 2020-21. Finance minister urged all States and Union Territories to replace conventional meters by prepaid “Smart Meters” in the next 3 years and measures to reform DISCOMs.

Further, the Finance Minister proposed in the Budget that national gas grid would be expanded from the present 16200 km to 27000 km with further reforms to be undertaken to facilitate transparent price discovery and ease of transactions.

The Finance Minister also proposed to extend corporate tax rate of 15% to new domestic companies engaged in the generation of electricity.

Presenting the Budget for the financial year 2020-21 in the Parliament today, the Union Finance and Corporate Affairs Minister, Smt Nirmala Sitharaman said that a total outlay of Rs.99,300 crore has been earmarked for the education sector in 2020-21 and Rs.3000 crore for Skill Development. “By 2030, India is set to have the largest working age population in the world. Not only do they need literacy but they need both job and life skills”, the Finance Minister explained.

Smt Nirmala Sitharaman announced that about 150 Higher Educational Institutions will start apprenticeship embedded degree/diploma courses by March 2020-21. This will help to improve the employability of students in the general stream (vis-a-vis services or technology stream). The government will also start a program whereby urban local bodies across the country would provide internship opportunities to fresh engineers for a period of up to one year. National Skill Development Agency will give special thrust to infrastructure-focused skill development opportunities, the Minister explained.

The Finance Minister, in her speech also said that the New Education Policy will be announced soon. Smt Nirmala Sitharaman stated that steps will be taken to enable sourcing External Commercial Borrowings and FDI to ensure greater inflow of finance to attract talented teachers, innovate and build better labs.

Degree level full-fledged online education programme will be started to provide quality education to students of deprived sections of the society as well as those who do not have access to higher education.However, these shall be offered only by institutions who are ranked within top 100 in the National Institutional Ranking Framework.

The Finance Minister observed that India should be a preferred destination for higher education. Therefore, under its “Study in India” programme, an Ind-SAT is proposed to be held in Asian and African countriesfor benchmarking foreign candidates who receive scholarships for studying in Indian higher education centres.

In order to meet the requirement of qualified medical doctors, it is proposed to attach a medical college to an existing district hospital in PPP mode. Viability gap funding will be made available to the States that fully allow the facilities of the hospital to the medical college and provide land at a concession.

The Government will also encourage large hospitals with sufficient capacity to offer resident doctors DNB/FNB courses under the National Board of Examinations. Smt Nirmala Sitharaman stated that a huge demand exists for teachers/nurses/para medical staff and care givers abroad. Therefore special bridge courses may be designed jointly by the Ministries of Health and Skill Development along with professional bodies to match the employer’s standards as well as meet the language requirements of various countries.

A National Police University and a National Forensic Science University have also been proposed in the domain of policing science, forensic science, cyber-forensics etc. in the Budget.

The New personal Income tax regime proposes the following tax structure:

In the new tax regime, substantial tax benefit will accrue to a taxpayer depending upon exemptions and deductions claimed by him.  For example, a person earning Rs 15 lakh in a year and not availing any deductions etc. will pay only Rs, 1,95,000 as compared to Rs, 2,73,000 in the old regime. Thus his tax burden shall be reduced by 78,000 in the new regime. He would still be a gainer in the new regime even if he was taking deduction of Rs 1.5 lakh under various sections of Chapter VI –A of the Income Tax Act under the old regime.

The new tax regime will be optional for the taxpayers. As per the Memorandum explaining the provision in the Finance Bill, the option shall be exercised for every previous year where the individual or the HUF has no business income and in other cases the option once exercised for a previous year shall be valid for that previous year and all subsequent years. The option shall become invalid for a previous year or previous years as the case may be if the individual or HUF fails to satisfy the conditions and other provisions of the Act shall apply.

The new personal income tax rates will entail estimated revenue forgone of Rs 40,000 crore per year.  Smt Sitharaman said, “We have also initiated measures to prefill the income tax return so that an individual who opts for the new regime would need no assistance from an expert to file his return and pay income tax.” The Finance Minister said that in order to simplify the income tax system, she has reviewed all the exemptions and deductions incorporated over the past several decades.”

In the Budget, around 70 of the existing exemptions and deductions of different nature (more than 100) have been proposed to be removed.  Remaining exemptions and deductions will be reviewed and rationalised in the coming years with a view to further simplifying the tax system and lowering the tax rate.

New Delhi: Presenting the first Union Budget of the third decade of the 21^st century, Finance Minister Smt. Nirmala Sitharaman, today unveiled a series of far-reaching reforms, aimed at energizing the Indian economy through a combination of short-term, medium-term, and long term measures.

PART-A

The Union Budget has been structured on the overall theme of “Ease of Living.” This has been achieved by farmer friendly initiatives such as Agriculture credit target of Rs 15 lakh crore for 2020-21; schemes of “Kisan Rail” and “Krishi Udaan” for a seamless national cold supply chain for perishables; and expansion of PM-KUSUM to provide 20 lakh farmers for setting up stand-alone solar pumps.

In the health sector, the Budget proposes more than 20,000 empanelled hospitals under PM Jan Arogya Yojana for poor people; and expansion of  Jan Aushadhi Kendra Scheme to all districts offering 2000 medicines and 300 surgicals by 2024.

Infrastructure receives a boost, with 100 more airports by 2024 to support Udaan scheme; and operation of 150 passenger trains to be done through PPP mode.

Starting apprenticeship embedded courses through 150 higher educational institutions by March 2021 and a proposal to establish Indian Institute of Heritage and Conservation are some of the other major highlights.

The Finance Minister said that the Union Budget Aims:

•  
  • To achieve seamless delivery of services through Digital governance
  • To improve physical quality of life through National Infrastructure Pipeline
  • Risk mitigation through Disaster Resilience
  • Social security through Pension and Insurance penetration.

           The  budget is woven around three prominent themes:

•  
  • Aspirational India in which all sections of the society seek better standards of living, with access to health, education and better jobs.
  • Economic development for all, indicated in the Prime Minister’s exhortation of “SabkaSaath, SabkaVikas, SabkaVishwas”.
  • Caring Society that is both humane and compassionate, where Antyodaya is an article of faith.

The three broad themes are held together by

•  
  • Corruption free – policy-driven good governance
  • Clean and sound financial sector. 

The three components of Aspirational India are- a) Agriculture, Irrigation and Rural Development , b) Wellness, Water and Sanitation and c) Education and Skills

Agriculture, Irrigation  and Rural Development

The Finance Minister said that more than Rs 2.83 lakh crore would be spent on Agriculture, Rural Development, Irrigation and allied activities as farmers and rural poor continue to remain the key focus of the Government. Reiterating the commitment of doubling farmers’ income by 2022, She said, Government has already provided resilience for 6.11 crore farmers insured under PM Fasal Bima Yojana. Agriculture credit target for the year 2020-21 has be set at Rs 15 lakh crore. All eligible beneficiaries of PM-KISAN will be covered under the KCC scheme. Moreover, comprehensive measures for one hundred water stressed districts, proposal to expand PM-KUSUM to provide 20 lakh farmers for setting up stand-alone solar pumps and for another 15 lakh farmers to solarise their grid-connected pump sets, setting up of efficient warehouses at the block/taluk level and in Horticulture sector with focus on “one product one district” for better marketing and export are some of the steps in that direction. Foot and Mouth disease, brucellosis in cattle and also peste des petits ruminants(PPR) in sheep and goat to be eliminatated by 2025,  Coverage of artificial insemination to be increased from the present 30% to 70%, MNREGS to be dovetailed to develop fodder farms, doubling of milk processing capacity from 53.5 million MT to 108 million MT by 2025 to be facilitated. Similarly on the Blue Economy, raising of fish production to 200 lakh tonnes is proposed by  2022-23.  Youth to be involved in fishery extension through 3477 Sagar Mitras and 500 Fish Farmer Producer Organisations. Fishery exports hoped to be raised to Rs 1 lakh crore by 2024-25. DeenDayalAntyodayaYojana- for alleviation of poverty, half a crore households are mobilized with 58 lakh SHGs and it will be further expanded.

Wellness, Water and Sanitation

Dwelling on the Wellness, Water and Sanitation theme, Smt Sitharaman said Rs 69,000 crore is being provided for Health care including Rs 6400 crores for Prime Minister Jan ArogyaYojana (PMJAY). She said, under PM Jan ArogyaYojana (PMJAY), there are more than 20,000 empanelled hospitals more in Tier-2 and Tier-3 cities for poorer people. Setting up hospitals in the PPP mode mainly in  Aspirational Districts, using machine learning and AI, in the Ayushman Bharat scheme, “TB Harega Desh Jeetega” campaign to end Tuberculosis by 2025, expansion of Jan Aushadhi Kendra Scheme to all districts offering 2000 medicines and 300 surgicals by 2024 are some of the other wellness measures in the Budget.

On sanitation front, Government is committed to ODF Plus in order to sustain ODF behaviour and the total allocation for Swachh Bharat Mission is Rs.12,300 crore in 2020-21.  Similarly, Rs 3.60 lakh crore approved for Jal Jeevan Mission and Rs 11,500 crore in 2020-21.

Education and Skills

On Education and Skill front, the Finance Minister said Rs 99,300 crore is being allocated  in 2020-21 and Rs 3000 crores for skill development.  New Education Policy will be announced soon. About 150 higher educational institutions will start apprenticeship embedded degree/diploma courses by March 2021. Degree level full-fledged online education programme to be started.  Under its “Study in India” programme, an Ind-SAT is proposed to be held in Asian and African countries. A National Police University and a National Forensic Science University are being proposed in the domain of policing science, forensic science, cyber-forensics etc. It is proposed that special bridge courses be designed by the Ministries of Health, Skill Development.

Economic Development

Industry, Commerce and Investment

Referring to the theme of Economic Development, the Finance Minister said that Rs 27300 crore would be allocated for development and promotion of Industry and Commerce for the year 2020-21. An Investment Clearance Cell will be set up to provide “end to end” facilitation. It is proposed to develop five new smart cities in collaboration with States in PPP mode. A scheme to encourage manufacture of mobile phones, electronic equipment and semi-conductor packaging is also proposed. A National Technical Textiles Mission would be set up with a four-year implementation period from 2020-21 to 2023-24 at an estimated outlay of Rs 1480 crore to position India as a global leader in Technical Textiles. To achieve higher export credit disbursement, a new scheme, NIRVIK is being launched to support mainly small exporters. Government e-Marketplace (GeM) is moving ahead for creating a Unified Procurement System in the country for providing a single platform for procurement of goods, services and works. It is proposed to take the turnover of GeM to Rs 3 lakh crores. 3.24 lakh vendors are already on this platform.

Infrastructure

On Infrastructure sector as highlighted by the Prime Minister that Rs 100 lakh crore would be invested  over the next 5 years, National Infrastructure Pipeline was launched on 31st December 2019 of Rs 103 lakh crore. It consists of more than 6500 projects across sectors and are classified as per their size and stage of development. She said that about Rs 22,000 crore has already been provided as support to Infrastructure Pipeline. Accelerated development of highways will be undertaken. This will include development of 2500 Km access control highways, 9000 Km of economic corridors, 2000 Km of coastal and land port roads and 2000 Km of strategic highways. Delhi-Mumbai Expressway and two other packages to be completed by 2023. Chennai-Bengaluru Expressway also be started. It is proposed to monetise at least 12 lots of highway bundles of over 6000 Km before 2024. Indian Railways aims to achieve electrification of 27000 Km of tracks. She said that within 100 days of assumption of this government, it has commissioned 550 wi-fi facilities in as many stations. Four station re-development projects and operation of 150 passenger trains would be done through PPP mode. The process of inviting private participation is underway. More Tejas type trains will connect iconic tourist destinations. High speed train between Mumbai to Ahmedabad would be actively pursued. Similarly, 100 more airports would be developed by 2024 to support Udaan scheme. Air fleet number expected to go up from the present 600 to 1200 during this time. Allocation of Rs 1.70 lakh crore proposed for transport Infrastructure in 2020-21. Similarly, allocation of Rs 22,000 crore proposed for power and renewable energy sector in 2020-21.  Expansion of the national gas grid from the present 16,200 km to 27,000 km proposed.

New Economy

On New Economy, Smt Sitharaman said that a policy to enable private sector to build Data Centre parks throughout the country will be brought out soon.  Fibre to the Home (FTTH) connections through Bharatnet will link 100,000 gram panchayats this year. It is proposed to provide Rs 6000   crore to Bharatnet programme in 2020-21.  Measures proposed to benefit the Start-ups include a digital platform for seamless application and capture of IPRs, Knowledge Translation Clusters to be set up across different technology sectors including new and emerging areas. For designing, fabrication and validation of proof of concept, and further scaling up Technology Clusters, harbouring test beds and small scale manufacturing facilities to be established. It is proposed to provide an outlay of Rs 8000 crore over a period five years for the National Mission on Quantum Technologies and Applications.

Caring  society

Women and Child, Social Welfare

Harping on the theme of Caring Society, the Finance Minister  said that Rs 35,600 crore proposed for nutrition-related programmes for the financial year 2020-21. Rs 28,600 crore proposed  for programs that are specific to women. Moreover, Rs 85000 crore would be allocated towards the welfare of Scheduled Castes and Other Backward classes for 2020-21. Similarly, for furthering development and welfare of Scheduled tribes, Rs 53,700 crore is proposed for 2020-21. She said, the government is mindful of the concerns of senior citizens and Divyang. Accordingly, an enhanced allocation of Rs 9,500 crore is being provided for 2020-21.

Culture and Tourism

On Culture and Tourism, establishment of an Indian Institute of Heritage and Conservation under Ministry of Culture proposed with the status of a deemed University. 5 archaeological sites to be developed as iconic sites with on-site Museums – Rakhigarhi (Haryana), Hastinapur (Uttar Pradesh) Shivsagar (Assam), Dholavira (Gujarat) and Adichanallur (Tamil Nadu). Re-curation of the Indian Museum in Kolkata, announced by Prime Minister in January 2020. Museum on Numismatics  and Trade to be located in the historic Old Mint building Kolkata. 4 more museums from across the country to be taken up for renovation and re-curation. Support for setting up of a Tribal Museum in Ranchi (Jharkhand). Maritime museum to be set up at Lothal- the Harrapan age maritime site near Ahmedabad, by Ministry of Shipping.

Environment and Climate Change

On Environment, States that are formulating and implementing plans for ensuring cleaner air in cities above one million to be encouraged. Parameters for the incentives to be notified by the Ministry of Environment, Forests and Climate change and the allocation for this purpose is Rs 4,400 crore for 2020-21.

Governance

Dwelling on the issue of Governance as clean, corruption-free, policy driven and good in intent and most importantly trusting in faith, the Finance Minister announced setting up of a National Recruitment Agency (NRA) as an independent, professional, specialist organisation for conduct of a computer-based online Common Eligibility Test for recruitment to Non-Gazetted posts. A test-centre in every district, particularly in the Aspirational Districts would also be set up.  It is also proposed to evolve a robust mechanism for appointment including direct recruitment to various Tribunals and specialised bodies to attract best talents and professional experts.  Deliberation to strengthen the Contract Act is also on.

Financial Sector

The Finance Minister said that In the last few years, Government of India has infused about Rs 3,50,000 crore by way of capital into Public Sector Banks for regulatory and growth purposes. Governance reforms would be carried out in these banks, so that they become more competitive. Government has already approved consolidation of 10 banks into four. Further, the Deposit Insurance and Credit Guarantee Corporation (DICGC) has been permitted to increase Deposit Insurance Coverage for a depositor, which is now Rs one lakh to Rs five lakh per depositor.          The limit for NBFCs to be eligible for debt recovery under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002 is proposed to be reduced from Rs. 500 crore to asset size of Rs 100 crore  or  loan size from existing Rs 1 crore to Rs 50 lakh. To meet the need for greater private capital, it is proposed to sell the balance holding of Government of India IDBI Bank to private, retail and institutional investors through the stock exchange. To help easy mobility while in jobs, we wish to infuse into the Universal Pension coverage with auto enrolment. More than five lakh MSMEs have benefitted from restructuring of debt permitted by RBI in the last year.  The restructuring window was to end on March 31, 2020. Government has asked RBI to consider extending this window till March 31, 2021. For selected sectors such as pharmaceuticals, auto components and others, it is proposed to extend handholding support – for technology upgradations, R&D, business strategy etc. A scheme of Rs 1000 crore will be anchored by EXIM Bank together with SIDBI.

Financial Markets

On Financial Markets, about deepening of the bond market, certain specified categories of Government securities would be opened fully for non-resident investors, apart from being available to domestic investors as well.            Government also proposes to expand by floating a new Debt-ETF consisting primarily of government securities. This will give retail investors access to government securities as much as giving an attractive investment for pension funds and long-term investors. To address the liquidity constraints of the NBFCs/HFCs, post the Union budget 2019-20, the government formulated a Partial Credit Guarantee scheme for the NBFCs. The Government and RBI has taken various measures to permit Rupee derivatives to be traded in the International Financial Services Centre at GIFT city, Gujarat.

Disinvestment

On Disinvestment, the Finance Minister said that listing of companies on stock exchanges discipline a company and provides access to financial markets and unlocks its value.  It also gives opportunity for retail investors to participate in the wealth so created. The government now proposes to sell a part of its holding in LIC by way of Initial Public Offer (IPO).

Fiscal Management

On Fiscal Management, the Finance Minister said that XV Finance Commission has given its first report pertaining to Financial Year 2020-21.  In the spirit of co-operative federalism, Government in substantial measure, accepted the recommendations of the Commission. The commission would submit its final report to the President during the latter part of the year, for five years beginning 2021-22. She also announced to transfer to the GST Compensation Fund balances due out of collection of the years 2016-17 and 2017-18, in two instalments. Hereinafter, transfers to the fund would be limited only to collection by way of GST compensation cess. The Revised Estimates of Expenditure for the Financial Year 2019-20 are at a level of Rs 26.99 lakh Crore and the receipts are estimated at Rs.19.32 lakh crore.

 She said, Government has estimated nominal growth of GDP for year 2020-21, on the basis of trends available, at 10%. Accordingly, receipts for the year 2020-21 are estimated at Rs. 22.46 lakh cr and, keeping in mind commitment of the Government towards various schemes and need for improvement in quality of life, level of expenditure has been kept at Rs 30.42 lakh cr.  A good part of the borrowings for the financial year 2020-21 would go towards Capital expenditure of the Government that has been scaled up by more than 21%. She said that the measures would spur growth impulses in the economy.

PART-B

Finance Minister Smt Nirmala Sitharaman said that the Union Government has spearheaded radical fiscal measures to ensure that India’s economy continues to tread the path of high growth. She said that to make sure India stays globally competitive and a favoured destination for investment, a bold historic decision was taken to reduce the corporate tax rate for new companies in the manufacturing sector to an unprecedented level of 15%. For existing companies, the rate has been brought down to 22%. As a result, our corporate tax rates are now amongst the lowest in the world.

The Finance Minister said that in continuation of the reform measures already taken so far, the tax proposals in this budget introduce further reforms to stimulate growth, simplify tax structure, bring ease of compliance, and reduce litigations.

Personal Income Tax and Simplification of Taxation

In order to provide significant relief to the individual taxpayers and to simplify the Income-Tax law, the Finance Minister has proposed to bring a new and simplified personal income tax regime, wherein income tax rates will be significantly reduced for the individual taxpayers who forego certain deductions and exemptions.

The proposed changes in tax slabs are listed in the following table:

Surcharge and cess shall be continued to be levied at the existing rates.

In the new tax regime, substantial tax benefit will accrue to a taxpayer depending upon exemptions and deductions claimed by him. For example, a person earning Rs. 15 lakh in a year and not availing any deductions etc., will pay only Rs. 1,95,000 as compared to Rs. 2,73,000 in the old regime. Thus, his tax burden shall be reduced by Rs. 78,000 in the new regime. He would still be the gainer in the new regime, even if he was taking deduction of Rs. 1.5 Lakh under various sections of Chapter VI-A of the Income Tax Act under the old regime.

The new tax regime shall be optional for taxpayers. An individual who is currently availing more deductions and exemption under the Income Tax Act may choose to avail them and continue to pay tax in the old regime.

The new personal income tax rates will entail estimated revenue foregone of Rs. 40,000 crore per year. Measures have been initiated to pre-fill the income tax return so that an individual who opts for the new regime would need no assistance from an expert to file his return and pay income tax.

The Finance Minister said she had reviewed all exemptions and deductions which got incorporated in the income tax legislation over the past several decades. Currently more than one hundred exemptions and deductions of different nature are provided in the Income Tax Act. She said that she has removed around 70 of them in the new simplified regime. She said that the remaining exemptions and deductions would also be reviewed and rationalized in the coming years, with a view to further simplifying the tax system and lowering the tax rate.

Dividend Distribution Tax

Currently, companies are required to pay Dividend Distribution Tax (DDT) on the dividend paid to its shareholders at the rate of 15% plus applicable surcharge and cess, in addition to the tax payable by the company on its profits. In order to increase the attractiveness of the Indian Equity Market and to provide relief to a large class of investors, the Finance Minister has proposed to remove DDT, and adopt the classical system of dividend taxation, under which the companies would not be required to pay DDT. The dividend shall be taxed only in the hands of the recipients at their applicable rate.

In order to remove the cascading effect, the Finance Minister has proposed to allow deduction for the dividend received by holding company from its subsidiary. The removal of DDT will lead to estimated annual revenue foregone of Rs. 25,000 crore. This will further make India an attractive destination for investment.

Concessional Tax Rate for Electricity Generation Companies

New provisions were introduced in September 2019, offering a concessional corporate tax rate of 15% to the newly incorporated domestic companies in the manufacturing sector which start manufacturing by 31^st March, 2023.

In order to attract investment in the power sector, it has been proposed to extend the concessional corporate tax rate of 15% to new domestic companies engaged in the generation of electricity.

Tax Concession for Foreign Investments

To incentivize investment by Sovereign Wealth Fund of foreign governments, the Finance Minister has proposed to grant 100% tax exemption to their interest, dividend and capital gains income in respect of the investment made in infrastructure and other notified sectors before 31^st March, 2024 and with a minimum lock-in period of 3 years.

Start-ups

The Finance Minister noted that during their formative years, Start-ups generally use Employee Stock Option Plan (ESOP) to attract and retain highly talented employees. Currently, ESOPs are taxable as perquisites at the time of exercise. In order to give a boost to the start-up ecosystem, the Finance Minister has proposed to ease the burden of taxation on the employees by deferring the tax payment for five years or till they leave the company or when they sell their shares, whichever is earliest.

An eligible Start-up having turnover upto 25 crore is allowed deduction of 100% on its profits for three consecutive assessment years out of seven years if the total turnover does not exceed 25 crore rupees. The Finance Minister has proposed to increase this limit to Rs. 100 crore. She has also proposed to extend the period of eligibility for claim of deduction from the existing 7 years to 10 years.

Concessional Tax Rate for Cooperatives

Cooperative societies are currently taxed at a rate of 30% with surcharge and cess. As a major concession, and in order to bring parity between the cooperative societies and corporates, the Finance Minister has proposed to provide an option to cooperative societies to be taxed at 22% plus 10% surcharge and 4% cess with no exemptions/deductions. She has also proposed to exempt these societies from Alternative Minimum Tax (AMT), just like companies under the new tax regime are exempted from the Minimum Alternate Tax (MAT).

Medium, Small and Micro Enterprises

In order to reduce the compliance burden on small retailers, traders, shopkeepers who comprise the MSME sector, the Finance Minister has proposed to raise by five times, the turnover threshold for audit from the existing Rs. 1 crore to Rs. 5 crore. In order to boost less-cash economy, she has proposed that the increased limit shall apply only to those businesses which carry out less than 5% of their business transactions in cash.

Affordable Housing

In the last budget, the Finance Minister had announced an additional deduction of upto one lakh, fifty thousand rupees for interest paid on loans taken for purchase of an affordable house. The date of loan sanction for availing this additional deduction is proposed to be extended by one year, beyond 31^stMarch, 2020.

Charity Institutions

Income of Charity Institutions is fully exempt from taxation. Donation made to these institutions is also allowed as deduction in computing the taxable income of the donor. It is proposed to pre-fill the donee’s information in taxpayer’s return on the basis of information of donations furnished by the donee.

In order to claim the tax exemption, charity institutions have to be registered with the Income Tax Department. It is proposed to make the registration completely electronic under a unique registration number (URN) to be issued to all new and existing charity institutions.

Faceless Appeals

In order to impart greater efficiency, transparency and accountability to the assessment process, a new faceless assessment scheme has already been introduced. It is proposed to amend the Income Tax Act so as to enable Faceless appeal on the lines of Faceless assessment.

‘Vivad se Vishwas’ scheme

Under the proposed ‘Vivad se Vishwas’ scheme, a taxpayer would be required to pay only the amount of the disputed taxes and will get complete waiver of interest and penalty, provided he pays by 31^stMarch, 2020. Those who will avail the scheme after 31^st March, 2020 will have to pay some additional amount. The scheme will remain open till 30^th June 2020.

Instant PAN through Aadhaar

In order to further ease the process of allotment of PAN, a system will be launched under which PAN shall be instantly allotted online on the basis of Aadhaar, without any requirement for filling up of detailed application form.

Indirect Tax

GST

A simplified GST return shall be implemented from the 1^st April, 2020. It will make return filing simple with features like SMS based filing for nil return, return pre-filling, improved input tax credit flow and overall simplification. Dynamic QR-code is proposed for consumer invoices. GST parameters will be captured when payment for purchases is made through the QR-code.

Customs

On the Customs side, India has taken a quantum leap in the “Trading Across Border” parameter of Ease of Doing Business rankings by the World Bank. India’s rank has improved from 146 to 68.

Imports under Free Trade Agreements are on the rise. Undue claims of FTA benefits have posed threat to domestic industry. In the coming months, Rules of Origin requirements shall be reviewed, particularly for certain sensitive items, so as to ensure that FTAs are aligned to the conscious direction of our policy.

Labour intensive sectors in MSME are critical for employment generation. Cheap and low-quality imports are an impediment to their growth. Keeping in view the need of this sector, customs duty is being raised on items like footwear and furniture. Rate of Duty for footwear is being raised from 25% to 35%; and for “parts of footwear” from 15% to 20%. Rate of Duty for specified Furniture goods is being raised from 20% to 25%.

To give impetus to domestic industry, and to generate resource for health services, it is proposed to impose a nominal health cess of 5% on imports of specified medical equipment. Basic customs duty on imports of newsprint and light-weight coated paper is being reduced from 10% to 5%.

An increase is proposed in National Calamity Contingent Duty (NCCD) on Cigarettes and Tobacco products. NCCD on Bidis remains unchanged.