Union Budget 2020-21

• Finance Minister Nirmala Sitharaman presented the Union Budget 2020-21 in the Lok Sabha on 1st February 2020.
• This is the second budget after Narendra Modi led National Democratic Alliance returned to power for a second term. This year's Union Budget centres around three ideas — Aspirational India, Economic development, A Caring Society.

Three prominent themes of the Budget

• Aspirational India - better standards of living with access to health, education and better jobs for all sections of the society
• Economic Development for all - “Sabka Saath , Sabka Vikas , Sabka Vishwas”.
• Caring Society - both humane and compassionate; Antyodaya as an article of faith.
• Three broad themes are held together by:
  • Corruption free, policy-driven Good Governance.
  • Clean and sound financial sector.
• Ease of Living underlined by the three themes of Union Budget 2020-21.

Three components of Aspirational India

• Agriculture, Irrigation, and Rural Development
• Wellness, Water, and Sanitation
• Education and Skills

1.Sixteen Action Points for Agriculture, Irrigation and Rural Development

• Rs. 2.83 lakh crore to be allocated for the 16 Action Points:
  • Rs. 1.60 lakh crore for Agriculture, Irrigation & allied activities.
  • Rs. 1.23 lakh crore for Rural development & Panchayati Raj.

Agriculture Credit

• Rs. 15 lakh crore targets for Agriculture credit set for the year 2020-21.

Blue Economy

• Rs. 1 lakh crore fisheries’ exports to be achieved by 2024-25.
• 200 lakh tonnes fish production targeted by 2022-23.

Kisan Rail to be setup by Indian Railways through PPP:

1. To build a seamless national cold supply chain for perishables (milk, meat, fish, etc.)
2. Express and Freight trains to have refrigerated coaches.

Krishi Udaan to be launched by the Ministry of Civil Aviation:

• Both international and national routes to be covered.
• North-East and tribal districts to realize Improved value of agri-products.
• One-Product One-District for better marketing and export in the Horticulture sector.

Measures for organic, natural, and integrated farming

• Jaivik Kheti Portal – online national organic products market to be strengthened.
• Zero-Budget Natural Farming (mentioned in July 2019 Budget) to be included.

PM-KUSUM to be expanded

• 20 lakh farmers to be provided for setting up stand-alone solar pumps.

Village Storage Scheme

• Women, SHGs to regain their position as Dhaanya Lakshmi

Livestock:

• Doubling of milk processing capacity to 108 million MT from 53.5 million MT by 2025.
• Artificial insemination to be increased to 70% from the present 30%.
• MNREGS to be dovetailed to develop fodder farms.
• Foot and Mouth Disease, Brucellosis in cattle and Peste Des Petits ruminants (PPR) in sheep and goat to be eliminated by 2025.

2. Wellness, Water and Sanitation

• Rs. 69,000 crores allocated for overall Healthcare sector.
• Targeting diseases with an appropriately designed preventive regime using Machine Learning and AI.
• Jan Aushadhi Kendra Scheme to offer 2000 medicines and 300 surgical in all districts by 2024.
• TB Harega Desh Jeetega campaign launched - commitment to end Tuberculosis by 2025.

3. Education and Skills

• Rs. 99,300 crores for education sector and Rs. 3000 crores for skill development in 2020-21.
• New Education Policy to be announced soon.
• National Police University and National Forensic Science University proposed for policing science, forensic science, and cyber-forensics.
• Degree level full-fledged online education program by Top-100 institutions in the National Institutional Ranking Framework.
• Up to 1-year internship to fresh engineers to be provided by Urban Local Bodies.
• Budget proposes to attach a medical college to an existing district hospital in PPP mode.
• 150 higher educational institutions to start apprenticeship embedded degree/diploma courses by March 2021.
• External Commercial Borrowings and FDI to be enabled for education sector.
• Ind-SAT proposed for Asian and African countries as a part of Study in India program.

Economic Development

• Rs. 27,300 crores allocated for 2020-21 for development and promotion of Industry and Commerce.
• Investment Clearance Cell proposed to be set up:
  • To provide “end to end” facilitation and support.
  • To work through a portal.
• National Technical Textiles Mission to be set up
• New scheme NIRVIK to be launched to achieve higher export credit disbursement
• Turnover of Government e-Marketplace (GeM) proposed to be taken to Rs 3 lakh crore
• All Ministries to issue quality standard orders as per PM’s vision of “Zero Defect-Zero Effect” manufacturing.

Infrastructure

• Rs.100 lakh crore to be invested on infrastructure over the next 5 years.
• National Infrastructure Pipeline:
  • Rs. 103 lakh crore worth projects; launched on 31st December 2019.
• A National Logistics Policy to be released soon

Highways

• Delhi-Mumbai Expressway and two other packages to be completed by 2023.
• Chennai-Bengaluru Expressway to be started.
• Proposed to monetise at least 12 lots of highway bundles of over 6000 Km before 2024.

Indian Railways

• More Tejas type trains to connect iconic tourist destinations.
• High speed train between Mumbai and Ahmedabad to be actively pursued.
• 148 km long Bengaluru Suburban transport project at a cost of Rs 18600 crore
• Indian Railways’ achievements:
  • 550 Wi-fi facilities commissioned in as many stations.
  • Zero unmanned crossings.
  • 27000 Km of tracks to be electrified.

Ports & Water-ways

• Economic activity along river banks to be energised as per Prime Minister’s Arth Ganga concept.

Airports:

• 100 more airports to be developed by 2024 to support Udaan scheme.
• Air fleet number expected to go up from present 600 to 1200 during this time.

Electricity:

• “Smart” metering to be promoted.

Power:

• Rs.22, 000 crore proposed for power and renewable energy sector in 2020-21.
• Expansion of national gas grid from the present 16200 km to 27000 km proposed.

New Economy

• Fibre to the Home (FTTH) connections through Bharat-net to link 100,000-gram panchayats this year.

Caring Society

• Focus on:
  • Women & child,
  • Social Welfare;
  • Culture and Tourism
• Allocation of Rs. 35,600 crores for nutrition-related programmes proposed for the FY2020-21.
• Rs.28, 600 crores proposed for women specific programs.
• Rs. 85, 000 crore proposed for 2020-21 for welfare of Scheduled Castes and Other Backward Classes.
• Rs. 53, 700 crores provided to further development and welfare of Scheduled Tribes.
• Enhanced allocation of Rs. 9,500 crores provided for 2020-21 for senior citizens and Divyang.

Culture & Tourism

• 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 on-site Museums:
  • Rakhigarhi (Haryana)
  • Hastinapur (Uttar Pradesh)
  • Shivsagar (Assam)
  • Dholavira (Gujarat)
  • 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 in Kolkata.
• 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 & Climate Change

• PM launched Coalition for Disaster Resilient Infrastructure (CDRI) with Secretariat in Delhi.
• Second such international initiative after International Solar Alliance.

Governance

• Taxpayer Charter to be enshrined in the Statute will bring fairness and efficiency in tax administration.
• Major reforms in recruitment to Non-Gazetted posts in Government and Public sector banks:
  • An independent, professional and specialist National Recruitment Agency (NRA) for conducting a computer-based online Common Eligibility Test for recruitment.
  • A test-centre in every district.
• New National Policy on Official Statistics to promote use of latest technologies including AI.
• A sum of Rs. 100 crores allocated to begin the preparations for G20 presidency to be hosted in India in the year 2022.

Financial Sector

• Reforms accomplished in PSBs:
  • 10 banks consolidated into 4.
  • Rs. 3,50,000 crore capital infused.
• Deposit Insurance and Credit Guarantee Corporation (DICGC) permitted to increase Deposit Insurance Coverage to Rs. 5 lakhs from Rs.1 lakh per depositor.
• Government to sell its balance holding in IDBI Bank to private, retail and institutional investors through the stock exchange.

Financial Market

• FPI limit in corporate bonds increased to 15% from 9% of its outstanding stock

Disinvestment

• Government to sell a part of its holding in LIC by way of Initial Public Offer (IPO).
• XV Finance Commission (FC):
  • XV Finance Commission has given its first report for FY2020-21
  • Its final report for five years beginning 2021-22 to be submitted during the latter part of the year.

GST Compensation Fund:

• Balances due out of collection of the years 2016-17 and 2017-18 to be transferred to the Fund, in two instalments.

Economy in Numbers

• For the FY 2019-20:
  • Revised Estimates of Expenditure: at Rs.26.99 lakh crore
  • Revised Estimates of Receipts: estimated at Rs.19.32 lakh crore.
• For the FY 2020-21:
  • Nominal growth of GDP estimated at 10%.
  • Receipts: estimated at Rs.22.46 lakh cr
  • Expenditure: at Rs.30.42 lakh cr.
• Fiscal deficit of 3.8% estimated in RE 2019-20 and 3.5% for BE 2020-21.

• Market borrowings:
  • Net market borrowings: Rs.4.99 lakh crore for 2019-20 and Rs.5.36 lakh crore for 2020-21.

Direct Tax

Corporate Tax:

• Tax rate of 15% extended to new electricity generation companies.
• Indian corporate tax rates now amongst the lowest in the world.

Start-ups:

• Start-ups with turnover up to Rs. 100 crores to enjoy 100% deduction for 3 consecutive assessment years out of 10 years.

Cooperatives:

• Cooperative societies exempted from Alternate Minimum Tax (AMT) just like Companies are exempted from the Minimum Alternate Tax (MAT).

Tax Facilitation Measures

• Instant PAN to be allotted online through Aadhaar.
• Vivad Se Vishwas’ scheme, with a deadline of 30th June, 2020, to reduce litigations in direct taxes
• Faceless appeals to be enabled by amending the Income Tax Act.

Indirect Tax

• Excise duty proposed to be raised on Cigarettes and other tobacco product
• Anti-dumping duty on PTA abolished to benefit the textile sector

Unprecedented Milestones and Achievements of Indian Economy

• India now the fifth largest economy of the world.
• 7.4% average growth clocked during 2014-19 with inflation averaging around 4.5%.
• 271 million people raised out of poverty during 2006-16.
• India’s Foreign Direct Investment elevated to US$ 284 billion during 2014-19 from US$ 190 billion during 2009-14.
• Central Government debt reduced to 48.7% of GDP (March 2019) from 52.2% (March 2014).

Future Aim for sustaining India’s unique global leadership, driven by Digital Revolution

• Seamless delivery of services through Digital Governance.
• Improvement in physical quality of life through National Infrastructure Pipeline.
• Risk mitigation through Disaster Resilience.
• Social security through Pension and Insurance penetration.

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