While the global economy is battling with strong headwinds, India's economy is seeing a robust growth and is on the path to emerge out as one of the fastest growing economies in the world.
A day after 'Unfettered Sky Blue' Economic Survey, breaking away from tradition, Finance Minister Nirmala Sitharaman today presented Modi government's first Budget in the second term in the form of traditional bahi khaata (account ledger).
After a pre-elections populous Budget in February, Modi government today presented the Union Budget to boost infrastructure and foreign investment at a time when economy is showing signs of slowdown.
Taking a pragmatic approach Finance Minister today announced no changes in personal income tax rates, hikes excise duty on fuel, increased tax rate for super rich and provide additional tax relief for home loan holders.
Among key announcement, Sitharaman said the government will launch an inter-operable ATM-like One Nation One Card for pan-India travel, new rental laws for affordable housing and interest subvention scheme for MSMEs and women.
Here are all the key Highlights from the Finance Minister's speech:
Taxes:
• No change in personal income tax rates
• Increase in surcharge on super rich: 3% surcharge for Rs 2 crore income; 7% on Rs 5 crore and above
• Government hike custom duty on fuel by 1 rupee, gold and precious items; Petrol & diesel to get costlier
• Annual turnover limit for 25% Corporate tax raised to Rs 400 crore from Rs 250 crore
• Taxpayers with annual turnover of less than Rs 5 crore to have to file only quarterly
• Direct tax revenue has increased by 78%
• Additional Rs 1.5 lakh deduction on home loans
• Interchangeability of PAN and Aadhaar for ITR who don't have PAN cards
• 2% TDS on withdrawals of Rs 1 crore in a year from bank accounts for business payments
• Government waives MDR changes on cashless payment
Ease of living:
• Rs 3,000 pension per month for informal sector workers
• Aadhaar card under 180 days for NRIs on arrival in India
• Government to open embassies in countries where India doesn't have a resident diplomatic mission as yet.
Women empowerment:
• Nari tu Narayani: Women SHG Interest Subvention Programme to be expanded to all districts in India
• Rs 1 lakh loan to be provided for SHG women members
• Every verified woman SHG member having a Jan Dhan account can avail Rs 5,000 rupees overdraft facility
Banking reform:
• On purchase of high-rate pooled assets of NBFC amounting of Rs 1 lakh core in this FY, Government will provide one-time 6 month credit guarantee
• Propose to provide Rs 70,000 crore capital for PSU Banks
• Regulation of HFCs (Housing Finance Cos) to move to RBI from National Housing Bank
Divestment:
• Government to modify present policy of retaining 51% stake in PSUs
• Government to continue with strategic divestment of select CPSEs.
• Divestment target of Rs 1.05 lakh crore for FY20
Railways:
• A new PPP model will usher the new dawn of Indian railway.
• Railways to be encouraged to invest more in suburban rail network via SPVs
• Railway infrastructure will need an investment of Rs 50 lakh crore between 2018 and 2030.
MSME:
• Propose easing angel tax for startups
• Angel tax: Wont require scrutiny from Income Tax department for startup
• 2% interest subvention for GST-registered MSME on fresh or incremental loans.
• ‘Stand Up India' Scheme to continue till 2025
• Propose to commence television channel for start-ups
• To extend pension benefit to retail traders with annual turnover less than Rs 1.5 crore
• New payment platform for MSMEs to be created
Affordable housing:
• Rental laws to be reformed. Modern tenancy law will be shared with states to promote house renting.
Economy:
• Fiscal deficit in FY19 at 3.3% of the GDP
• Government will start raising part of borrowing in foreign currency
• Government external debt to GDP is among the lowest in the world.
Education:
• Government to launch 'Study in India' programme to attract foreign students in higher education
• Allocate Rs 400 crore for world-class higher education institutions in FY20.
• To unveil new education policy.
• National research foundation to fund, coordinate and to promote research in the country.
• New Higher Education Commison with focus on higher autonomy
• New national education policy to propose changes in school, higher education
Tourism:
• 17 iconic world-class tourist sites to be developed
FDI:
• Local sourcing norms will be relaxed for the Single brand retail sector
• Government of open FDI in aviation, insurance, animation AVGC and media
Transportation
• Inter-operable One Nation One transport card: National transport card for universal travel which can used on various modes of transport (road, railways etc). The card can also be used as a ATM card for withdrawing money.
• Government plans to create MRO (Manufacturing, Repair and Operate) industry
• PPP to be used to unleash faster development and the delivery of passenger freight services.
• Comprehensive restructuring of National Highways Programme for creation of National Highways Grid.
• Government envisions using rivers for cargo transport,it will also decongest roads and railways.
• Affordable housing: Government will provide additional income tax deduction of Rs 1.5 lakh on the interest paid on the loans taken to purchase EVs
• Affordable housing: Government will provide additional income tax deduction of Rs 1.5 lakh on the interest paid on the loans taken to purchase EVs
Investment:
• Existing KYC norms for FPIs to be rationalized and simplified to make it more investor-friendly
• Long-term bonds for market
• To allow FIIs & FPIs investment in debt securities issued by NBFCs
• Credit Guarantee Enhancement Corporation to be set up long-term bonds with specific focus on infra sector
• Propose Social Stock Exchange under SEBI for listing social enterprises & voluntary organisations
• To merge NRI portfolio route with FPI route
• To hike statutory limit for foreign investment in some companies
• To set up a credit guarantee enhancement corporation
• Government will take up measures to make RBI & SEBI depositories inter-operable
• SEBI to mull increasing minimum public shareholding to 35% from 25%
• User friendliness of trading platforms for corporate bonds will be reviewed, including issues arising out of capping of International Securities Identification Number
• To deepen corporate tri-party repo market in corporate debt securities. Plan to enable stock exchanges to allow AA rated bonds as collaterals.
• Annual Global Investors' Meet for attracting global players to come and invest in India.
• To allow FPIs to subscribe to listed debt papers of REITs
Auto sector:
• FAME II scheme aims to encourage faster adoption of electric vehicles by the right incentives and charging infrastructure
For Rural India:
• Gaon, Garib and Kisan are the focus of our government
• New Jal Shakti ministry will work with states to ensure Har Ghar Jal for all rural houses by 2024.
• Pradhan Mantri Gram Sadak Yojana phase 3 is envisaged to upgrade 1,25,000 km of road length over the next 5 years.
• Government will set up 100 new clusters for 50,000 artisans in FY20
• To invest Rs 80,250 cr for upgradation of roads under PM Gram Sadak Yojana
• Every single rural family except those unwilling to have electricity by 2022
Agriculture:
• Government to promote innovative Zero Budget farming.
• 10,000 new farmer producer organisations.
• 80 Livelihood business incubators and 20 technology business incubators to be set up in 2019-20 under ASPIRE to develop 75,000 skilled entrepreneurs in agro-rural industries
Space:
• India has emerged as a major space power. It is time to harness our ability commercially.
• A public sector enterprise, New Space India Limited (NSIL) has been incorporated to tap benefits of ISRO
Sports:
• To popularise sports at all levels, National Sports Education Board for development of sportspersons to be set up under Khelo India.
State of the economy:
• Government external debt to GDP is among the lowest in the world.
• Railways will require investment of Rs 50 lakh crore from 2018-30.
• Schemes such as BharatMala, Sagarmala and UDAN are bridging rural urban divide and improving our transport infrastructure.
• Gandhipedia' is being developed to sensitize the youth about positive Gandhian values
• The unambiguous mandate by the people in the recent election has set the ball rolling for the New India
• NPAs recovery of Rs 4 lakh crore over the last four years, NPAs down by Rs 1 lakh crore in the last one year
• Rashtriya Swachhta Kendra to be inaugurated at raj ghat on Oct 2
• The people of India have validated their two goals for our country's future: national security and economic growth.
• It took us over 55 years to reach $1 trillion dollar economy, but we added $1 trillion in just 5 years
• We can very well reach $5 trillion in the next few years.
• Last mile delivery stood out, citizens in every nook and corner of the country felt the difference; our objective was and continues to be Mazbooth Desh Ke Liye Mazbooth Nagarik
• India will become $3 trillion economy this year. We need to continue to take many structural reforms to achieve $5 trillion economic goal.
• Connectivity is the lifeline of the economy
In summary:
The thrust of this Budget was on social infrastructure, ease of living and technologyled governance aimed at inclusive and equitable growth. Direct Benefit Transfer to farmers will support rural demand. The Real Estate sector will see more activity and the allied sectors of steel and cement will get a boost. With enhanced spending and direct benefit transfers, there is an obvious concern about inflationary pressures.
'Yakeen ho to koi raasta niklata hai, hawa ki awt(protection) bhi le kar chiragh jalta hai'
The Government's vision to create a tech-enabled tax system is a welcome initiative. In all, this Budget has set the tone for considerable future discourse.
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