Budget 2019-20 : The maiden budget of second Narendra Modi government
Finance Minister Nirmala Sitharaman presents the maiden budget of the second Narendra Modi government in the Lok Sabha on July 5, 2019. So here we are providing the brief detail about 2nd Budget 2019-20. The maiden budget of second Narendra Modi government in Lok Sabha on July 5, 2019
- Fiscal deficit target is 3.3% of GDP, brought down from 3.4%.
The Minister proposes a modern tenancy law. Loans of upto ₹1 crore to be given to MSMEs for ease of access.
- Government will create a payment platform for MSMEs to enable them to pay bills, and save time. The Government will extend pension benefits to 3 crore retail traders and shopkeepers who have a revenue of less than ₹1.5 crore. This will be called the PM Karam Yogi Maan Dhan scheme.
Investments and markets
- Investment by FIIs and FDIs in debt securities in infrastructure debt funds to be allowed. Minimum public shareholding in listed companies can be increased from 25% to 35%, says the Minister, saying this is being considered.
- Global FDIs fell to $1.3 billion from $1.5 trillion, but inflows in India remained strong at $54.37 billion, a growth of 6%.
- “100% FDI for insurance intermediaries. Local sourcing norms to be eased for FDI in single-brand retail.”
- 9.6 crore toilets have been constructed till now. More than 5.6 lakh villages have become open-defecation free. She proposes to expand Swachch Bharat to solid waste management in every village.
- Over 2 crore rural Indians have been made digitally literate.
- The Minister moves on to the rural portion of the Budget. “Gaon, Gareeb aur Kisan at the centre of all our policies.”
- Under phase three of PM Gram Sadak Yojana, 1.25 lakh kms of road to be built in the next five years. Project cost estimated at over Rs 80,000 crore.
- “All villages and almost 100% of houses have been provided with electricity.”
- She asssures that by 2022 every single rural family, except those who are unwilling to take the connection, will have electricity and clean cooking gas.
- The completion of houses has come down from 314 days per house in 2015-16 to 114 days now, she says.
- Over 81 lakh houses at investment of Rs 4.83 lakh crore have been sanctioned and construction has started in about 41 lakh houses, under PMAY-Urban. More than 95% of all cities have declared themselves open defecation free.
- Rashtriya Swachchta Kendra to be inaugurated at Gandhi Darshan on October 2, 2019.
- The Minister proposes ₹50 lakh crore investment for Railway infrastructure between 2018 and 2030, and using public-private partnerships unleash faster development, completion of tracks, passenger freight services.
- Government will do a restructuring of the national highway programme. In the second phase of Bharat Mala, States will be helped to develop State highways.”
- She then goes on to cite the government’s transport infrastructure schemes such as Sagar Mala, UDAN etc.
- 17 taxes and 13 cesses became one tax under GST. In the initial phase, GST witnessed teething problems, and the Centre and States worked to make it better.
- Relief of above ₹92,000 crore per year has been given. GST to be further simplified to a single monthly return.
- Proposed to increase custom duty on gold and other precious metals from 10 % to 12.5%.
- Special additional excise duty on fuel of ₹1 per liter.
- India’s sovereign external debt to GDP is at less than 5%.
- New ₹20 coins to be made available soon. Part A concludes after 1 hour 35 minutes.
- TDS of 2% on cash withdrawals exceeding ₹1 crore in a year from bank accounts, to discourage business payments in cash.
- Those in the highest income brackets will have to pay more surcharge for those in the ₹2-5 crore, and ₹5 crore and above, increasing the effective tax rate by 3% and 7% respectively.
- In direct taxes, due to a slew of efforts, the revenue has increased by over 78% to ₹11.37 lakh crore.
- ₹5 lakh minimum limit announced for taxpayers.
Banking and finance sector
- Financial gains from cleaning up of banking sector are clearly visible. NPAs of commercial banks have come down by ₹1 lakh crore. Number of public sector banks reduced by 8, through consolidation.
- ₹70,000 crore recapitalisation for public sector banks.
- NBFCs that are fundamentally sound should continue to get funding from banks and mutual funds. Govt will provide one-time 6-months partial credit guarantee for public sector banks, for the purchase of pooled assets of financially sound NBFCs.
- The National Housing Bank is also the regulator of the housing finance sector. She proposes the regulation to be returned to the RBI. ₹100 lakh crore investment in infratructure over the next five years.
- Govt to support private entrepreneurs in agriculture. The Minister says the government will focus more on agricultural infrastructure.
- “Ease of doing business and ease of living should apply to farmers.” She proposes zero-budget farming, as a model for farmers. “Steps such as this can help doubling farmers income.”
- Zero-Budget farming is natural farming which is neither chemical-loaded nor organic with its reliance on manure. It’s a form of gardening as a self-sustainable practice with minimum external intervention. This concept of zero budget natural farming (ZBNF) was first propagated 25 years ago by Subhash Palekar as a movement for farmers who were in debt due to the Green Revolution and is now being used by a large number of farmers across the country.