Key Highlights of Union Budget 2019
On 5th July 2019, Finance minister Mrs. Nirmala Sitharaman presented the Union Budget 2019 in Loksabha in order to boost the Indian economy. The key highlights of Union budget 2019 are given below –
- No change in personal tax rates.
- Additional tax relief of Rs.1.5 Lakhs on home loan for buying houses up to Rs.45 Lakh.
- Corporate tax with turnover up to Rs.400 crore slashed down from 30% to 25%.
- Hike in custom duty of fuel by 1 Rupee.
- Gold & precious items to get costlier.
- Petro & diesel to get costlier.
- 3% surcharge to be levied on income of Rs.2 crore.
- 7% surcharge to be levied on income of Rs.5 crore & above.
- Interchangeability option given for PAN & Aadhar in case of Income tax returns.
- Rise in duty of tiles, Vinyl Flooring, Cashew Kernels, some synthetic rubber, auto parts, digital & video recorder, CCTV camera etc.
- Advice to GST council to reduce the tax rates on electric vehicles from 12 % to 5%.
- Reformation in the rental laws – In order to promote house renting, modern tenancy laws will be shared with states soon.
Promotion of Digital Payments
- Government waves off the merchant discount rate charge on cashless payments.
- 2% TDS to be levied on withdrawal payment of Rs.1 crore from the bank account annually for business payments.
Ease of Living
- Pension of Rs.3000 per month to be given to the workers of informal sector.
- Aadhaar card for NRI’s on arrival in India.
- One nation one card – Launching one transport one card to be used in various travel modes all over India (metro, road, railways etc.)
- Government is planning to create a new industry named “Manufacturing, Repair and Operate” (MRO)
- Public private partnership (PPP) model to be used for faster development & completion of tracks, rolling stock manufacturing and delivering of passenger freight services.
- Comprehensive restructuring of national highways program in order to create national highways grid.
- Government plans to use rivers for cargo transport in order to reduce & avoid congestion on roads & railways routes.
- Fiscal deficit stands at 3.3% of the GDP in FY 2019.
- Government is planning to raise part of borrowing in foreign currency.
- Government external debt to GDP is among the lowest in the world.
- To expand women self-help groups (SHG) interest subvention programme named “NarituNarayani” to all districts in India.
- Loan of Rs.1 lakh to be provided to self-help groups (SHG) women members under Mudra Scheme.
- Every registered SHG women member having a Jan Dhan account can avail overdraft facility of RS.5000.
- Government proposes to provide capital of Rs.70000 crore for PSU banks.
- Regulations of housing finance companies moving RBI from national housing bank.
- Government will provide one time 6 month credit guarantee on purchase of high rate pooled assets of non-banking financial corporation amounting to Rs.1 lakh crore in this financial year.
- Government targeting Rs.1.05 Lakh crore for disinvestment in financial year 2020.
- Government present policy of retaining 51% stake in public sector units (PSU’s) to be modified.
- Government to continue with strategic disinvestment of selected central public sector enterprises (CPSE’s)
- Government proposed to reinitiate the strategic disinvestment of Air India.
- A new public partnership model (PPP) to be followed for faster development, rolling stock manufacturing and the delivery of freight services.
- Railways are encouraged to invest more in suburban rail network through special purpose vehicles (SPV’s)
- Infrastructure of railways needs an investment of Rs.50 Lakh crore from 2018 to 2030.
- Budget of Rs.65837 crore allocated to railways including capital expenditure of Rs.1.60 Lakh crore.
- Massive programs to be launched for modernization of railway stations in 2019.
Micro, Small & Medium Enterprises (MSME)
- Creation of new payment platform for MSME’s
- New television channel for startups
- Continuation of “Stand up India” scheme till 2025
- Government proposes easing angle tax for startups and won’t require scrutiny for startup from the IT department
- Use of E-verification mechanism for establishing identity of investor & source of funds for startups
- Provision of 2% interest on fresh or incremental loans for GST registered MSME.
- Extension of pension benefit to retail traders having annual turnover of less than Rs.1.5 crore.
- Amount Allocation of Rs.400 crore for world class higher educational institutions in financial year 2020.
- New education policy to be unveiled soon.
- Government will launch a program named “Study in India” to attract foreign students to India for higher education
- Government to propose changes in schools & higher educational institutions by launching new national education policy.
- Focus on higher autonomy with the implementation of new higher education commission.
- National research foundation to fund, coordinate and to promote research in the country.
- To make Indian youth ready to take jobs in foreign countries, giving more importance to new age skills like artificial intelligence, big data, internet of things etc.
- 17 iconic world class tourist sites to be developed soon.
- Relaxation will be given in local sourcing norms for single brand retail sector.
- Government to open FDI in sectors like aviation, media, insurance & animation AVGC.
- Rationalizing & simplification of existing KYC norms for foreign portfolio investment to make it more investor friendly.
- Allowing foreign institutional investors (FII’s) & foreign portfolio investors (FPI’s) investment in debt securities issued by NBFC’s.
- Long term bonds for market
- NRI portfolio route to be merge with FPI route soon.
- To set up a credit guarantee enhancement corporation for long term bonds with specific focus on infra sector.
- SEBI deliberate to increase minimum shareholding from 25% to 35%.
- To allow foreign portfolio investors (FPI’s) to subscribe to listed debt papers of real estate investment trust (REIT’s)
- To hike statutory limit for foreign investment in some companies.
- Government proposes social stock exchange under SEBI in order to list social enterprises & voluntary organizations.
- Annual meet with global investors to attract global players to come & invest in India.
- Government will take measures to make RBI & SEBI depositories inter-operable.
- Corporate bonds trading platforms will be reviewed for its user friendliness including issues arising out of capping of international securities identification number (ISIN)
- To expand tri-party repo market in corporate debt securities. Government plans to enable stock exchanges to allow AA rated bonds as collateral.
- To encourage faster adoption of electrical vehicles through right incentives & charging infrastructure with the help of FAME11 scheme.
- Government main focus is on Gaon, Garib & Kisan.
- Government is planning to set up 100 new clusters for 50000 skilled workers (artisans) in financial year 2020.
- Government to invest Rs.80250 crore in PM Gram Sadak Yojana for upgradation of roads.
- Every single rural family will get electricity by 2020 (except peoples who are unwilling)
- Government planning to upgrade phase 3 road lengths to 125000 KM under Pradhan Mantri Sadak Yojna over the next 5 years.
- New Jal Shakti Ministry will join hands with other states to provide water to all rural houses by 2024.
- Government to set up 10000 new farmer producer organizations
- Government to promote zero budget farming to save farmers from debt trap.
- Government to set up 80 livelihoods & 20 technologies business incubators to develop 75000 skilled entrepreneurs in agro-rural industries under “ASPIRE” in 2019-20.
- Indian has emerged as a major space power. Now time has come to utilize our ability commercially.
- New space India limited (NSIL); a public sector enterprise has been formed to utilize the benefits of ISRO.
- To promote sports at all levels.
- Government is planning to set up national sports education board under “Khelo India” for the development of sports persons.
State of the Economy
- Government to develop “Gandhipedia” to familiarize the youth with the positive Gandhian values.
- Government will inaugurate “Rashtriya Swachhta Kendra” at Rajghat on 2nd October.
- Government to use schemes such as Bharatmala, Sagarmala & Udaan to improve the transport infrastructure and to bridge the gap between rural and urban areas.
- Investment of Rs.50 lakh crore is needed for railways from 2018-30
- Rs.4 Lakh crore are recovered by Non-performing assets over the last 4 years but seen the down trend in the last 1 year.
- National security & economic growth are the 2 most important goals of our country’s future as validated by People of India.
- We are currently a $1 trillion economy and we reached this position in just 5 years. Aiming to reach $5 trillion in the next few years.
- Government lays out 10 point vision for the new India.
- Connectivity is considered as the lifeline of the economy.
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