Finance Minister Niramala Sitharaman's maiden budget received mixed response from critics and industry experts.
New Delhi: Prime Minister Narendra Modi’s first budget since sweeping to victory for a second time in the recent national election has sought to boost investments while continuing his government’s focus on social sector spending.
In her maiden budget speech Finance Minister Nirmala Sitharaman announced that there would be steps undertaken to sell India’s first global sovereign bonds and ease rules for overseas investors to help revive economic growth which was received very well by her party members and allies.
Here’s a look into the various aspects of this year’s budget:
- Rs 7000 crore cash infusion in banks
- NRIs to get Aadhaar on arrival
- Scrapping the 180-day rule for Non-Resident Indians arriving to India to get Aadhaar cards
- The budget proposes issuing of Aadhaar cards with Indian passports upon arrival in India.
- Aadhaar-PAN interchangeability
Nirmala Sitharaman's maiden budget on Friday proposed to make Pan Card and Aadhaar card interchangeable to file tax returns.
Nirmala Sitharaman's maiden budget today proposed to make Pan Card and Aadhaar card interchangeable to file tax returns. In addition to that, those who do not have PAN can simply quote their Aadhaar number wherever PAN is mandatory to quote.
- In addition to that, those who do not have PAN can simply quote their Aadhaar number wherever PAN is mandatory to quote.
- Incentives for electric vehicles
- Sitharaman announced that upfront incentive will be offered on purchase of electric vehicles, adding that the government has already moved GST Council to cut rate for EVs To 5% from 12%.
- Sitharaman's other big announcement on EVs pertained to (a) tax deduction of Rs 1.50 lakh on EV loan interest, and (b) No custom duty on certain parts of EVs.
- Rural India
- From raised spending on road building to connect villages, to more rural homes built with power and fuel connections and support for small businesses producing cattle feed, the government’s continued push could benefit companies with exposure to rural India.
- Sitharaman said the government will consider further opening up foreign direct investment in aviation. Apart from announcing another plan to sell state-owned Air India Ltd., the government also announced a plan enter aircraft financing and leasing.
- Water supply
- The plan to provide piped water across Indian households by 2024 and the focus on managing the nation’s resources by consolidating the country’s scattered water administration under the Water Power ministry underlines the seriousness of India’s rising shortages.
- Real estate and construction
- Sitharaman has promised to build 19.5 million rural homes by 2022. That’s in addition to the continued focus on building roads under the national highways and rural roads programs.
- One nation, one card
- This inter-operable transport card runs on RuPay card and would allow the holders to pay for their bus travel, toll taxes, parking charges, retail shopping and even withdraw money.
- This will enable people to pay multiple kinds of transport charges, including metro services and toll tax, across the country.
- Angel tax
- In a major breather for startups, it was announced that startups and investors who file requisite declarations and provide information in their returns will not be subjected to any scrutiny on valuation.
- Govt waives MDR charges on cashless payments
- Merchant discount rate won't be charged on businesses with annual turnover of over Rs 50 crore and also on their customers.
- RBI and banks will absorb these costs instead of the poeple and the business. The move is expected to be a major push to cashless payment.
- Rs 3,000 pension per month for informal sector workers
- Around 30 lakh workers are now covered under the Pradhan Mantri Shram Yogi Maandhan Yojana, the scheme that provides a monthly pension of Rs 3,000 to informal sectors workers after they turn 60.
- Zero-Budget farming
- Sitharaman said this is a step that would be taken to replicate zero-budget farming, currently practiced only in a few states, in all of India.
- It called 'zero budget' because the costs of raising the main crop are offset by the income that farmers earn from intercrops.
- Under this method, chemical fertilizers and pesticides make way for locally available cow dung and cow urine, jaggery and pulse flour.
- Finance Minister Nirmala Sitharaman announced there is soon going to be a new education policy, and that higher education in the country will be reformed comprehensively.
- Efforts will be made to bring in foreign students under a Study in India plan, she said. She said the government will make renewed efforts to promote research in the country.
- Shareholding in listed companies
- Sitharaman said the government would consider raising minimum public shareholding in the listed firms from 25pc to 35pc.
- Corporate tax
- Under a phased reduction plan for corporate taxes, the budget proposed to bring under 25% tax ambit companies with an annual turnover of up to Rs 400 crore, in place of the earlier cap of Rs 250 crore.
- An allocation of Rs 3.18 lakh crore was made in the Union Budget to the defence sector for 2019-20 as against last year's Rs 2.98 lakh crore. Out of the total allocation, Rs 1,08,248 crore has been set aside for capital outlay to purchase new weapons, platforms and military hardware.
- Taxing of the "super-rich"
- For the wealthy, Sitharaman's budget was a big blow. The finance minister shunned the wealth tax, but increased the surcharge for the rich, proposing to increase the surcharge for those earning Rs 2-5 cr 3 per cent and for those earnings above Rs 5 cr to 7 per cent.
- Fuel bill
- In a blow to owners of cars and bikes, Finance Minister Sitharaman proposed to increase Special Additional Excise duty and Road and Infrastructure Cess each by one rupee a litre on petrol and diesel.