Interim Budget 2019-2020


Ajit Kumar AJIT KUMARWISDOM IAS, New Delhi.

                                              Interim Budget 2019-2020
 
Goal: ‘New India’ by 2022
an India which is clean and healthy, where everybody would have a house with universal access to toilets, water and electricity; where farmers’ income would have doubled; youth and women would get ample opportunities to fulfil their dreams; an India free from terrorism, communalism, casteism, corruption and nepotism.
 
State of the Economy
The last five years have seen India being universally recognised as a bright spot of the global economy.
The country witnessed its best phase of macro-economic stability during this period.
We are the fastest growing major economy in the world with an annual
average GDP growth during last five years higher than the growth achieved by any Government since economic reforms began in 1991.
From being the 11th largest economy in the world in 2013-14, we are today the 6th largest in the world.
 
Besides generating high growth rate, we contained double-digit inflation and restored fiscal balance. Inflation is a hidden and unfair tax on the poor and the middle class. The average rate of inflation during 2009-2014 was a backbreaking 10.1%.  We brought down average inflation to 4.6% which is lower than the inflation during the tenure of any other Government.
 
From the high of almost 6% seven years ago, the fiscal deficit has
been brought down to 3.4% in 2018-19 RE.
 
The current account deficit (CAD), against a high of 5.6% six years ago, is likely to be only 2.5% of GDP this year.
 
The Finance Commission's recommendations increasing the share of the States from 32% to 42% in central taxes, which we accepted in the true spirit of cooperative federalism, thereby transferring significantly higher amounts to the States.
 
Due to a stable and predictable regulatory regime, growing
economy and strong fundamentals, India could attract massive amount of
Foreign Direct Investment (FDI) during the last 5 years - as much as $239 billion. This period also witnessed a rapid liberalisation of the FDI policy, allowing most FDI to come through the automatic route.
 
Government has undertaken path breaking structural reforms by
introducing Goods and Services Tax (GST) and other taxation reforms.
 
Banking Reforms and Insolvency and Bankruptcy Code (IBC)
 
The period of 2008-14 - Outstanding loans of public
sector banks ballooned from Rs. 18 lakh crore to Rs. 52 lakh crore during this period.
There were high stressed and non-performing assets (NPAs)
amounting to Rs. 5.4 lakh crore in 2014.
 
We put a stop to such practices and stopped the culture of “phone banking”.
The 4Rs approach of recognition, resolution, re-capitalisation and reforms has been followed.
A number of measures have been implemented to ensure Clean Banking.
 
Through a transparent and accountable process, we recognised these NPAs.
The Insolvency and Bankruptcy Code has institutionalised a resolution-friendly mechanism, which is helping in recovery of non-performing loans while preserving the underlying businesses and jobs.
 
An amount of close to Rs 3 lakh crore has already been recovered in favour of banks and creditors.
To restore the health of public sector banks, recapitalisation has been done with an investment of  Rs 2.6 lakh crore.
 
Amalgamation of banks has also been done to reap the benefits of economies of scale, improved access to capital and to cover a larger geographical spread.
 
                                  Steps against corruption
 
We have ushered in a new era of transparency. We have given a
corruption free government.
The Real Estate (Regulation and Development) Act, 2016 (RERA) and Benami Transactions (Prohibition) Amended Act, 2016  are
helping to bring transparency in the real estate sector.
 
The Fugitive Economic Offenders Act, 2018 will help confiscate and dispose off the assets of economic offenders who escape the jurisdiction of the laws in India.
                                      Cleanliness
Swachh Bharat Mission
India has achieved 98% rural sanitation coverage and as many as 5.45 lakh villages have been declared "Open Defecation Free."
 
                       Poor and backward classes
The poor have the first right on the resources of the nation.
The Government has ensured 10% reservation in educational institutions and Government services for poors.
 
In these institutions, around 25% extra seats (approximately 2 lakh) will be provided so that, there is no shortfall of presently available/reserved seats for any class.
 
To provide food grains at affordable prices to the poor and middle
classes, about Rs 1,70,000 crores were spent in the year 2018-19 which is almost double the amount of Rs 92,000 crores spent in the year 2013-14. We ensured that everyone gets food and none goes to sleep hungry. Rs 60,000 crores are being allocated for MGNREGA in BE 2019-20. Additional amount would   be provided if required.
 
Under the Pradhan Mantri Gram Sadak Yojana, construction of
rural roads has been tripled. 15.80 lakh habitations out of a total of 17.84 lakh habitations have already been connected with pucca roads and work is going on to complete the rest very soon.
Pradhan Mantri Gram Sadak Yojana (PMGSY) is being allocated Rs 19,000 crore in BE 2019-20 as against Rs 15,500 crore in RE 2018-19.
 
During the period 2014-18, a total number of 1.53 crore houses have been built under the Pradhan Mantri Awas Yojana.
 
Under 'Saubhagya Yojna', we provided free electricity connection to almost every household. By March, 2019, all willing families will get electricity connection.
                                                    Health care
 
We launched the world’s largest healthcare programme, Ayushman Bharat, to provide medical treatment to nearly 50 crore people. Already close to 10 lakh patients have benefited for medical treatment which would have cost them Rs 3,000 crore through free treatment made available under the scheme.
 
Lakhs of poor and middle class people are also benefiting from reduction in the prices of essential medicines, cardiac stents and knee implants, and availability of medicines at affordable prices through Pradhan Mantri Jan Aushadhi Kendras.
 
Announced setting up of new the 22nd AIIMS in Haryana.
 
The Aspirational Districts Programme is providing targeted
development to the 115 most backward districts of the country. The
programme has achieved notable results.
 
Farmer's progress and Increase in Income
 
Farmers were not getting the full value of their produce.
With an aim to double the income of farmers, our Government, for the first time in history has fixed the Minimum Support Price (MSP) of all 22 crops at minimum 50% more than the cost.
 
 
Structured Income Support
 
Declining prices of agricultural commodities in the international market and fall in food inflation in India since 2017-18, relative to non-food sector, have however, reduced the returns from farming.
 
There is a need for providing structured income support to the poor land-holder farmer families in the country for procuring inputs such as seeds, fertilizers, equipment, labour etc. and to meet other needs.
 
Such support will help them in avoiding indebtedness as well and falling into clutches of money lenders.
 
Pradhan Mantri KIsan SAmman Nidhi (PM-KISAN)
 
To provide an assured income support to the small and marginal
farmers, our Government is launching a historic programme namely
Pradhan Mantri KIsan SAmman Nidhi (PM-KISAN)”.
 
Under this programme, vulnerable landholding farmer families, having cultivable land upto 2 hectares, will be provided direct income support at the rate of Rs 6,000 per year.
This income support will be transferred directly into the bank accounts of beneficiary farmers, in three equal instalments of Rs 2,000 each.
Around 12 crore small and marginal farmer families are expected to benefit from this.
This programme will entail an annual expenditure of Rs 75,000 crore.
 
 Interest Subvention
 
During the last five years, for providing affordable loans to farmers, the
amount of interest subvention has been doubled.
 
The crop loan to farmers increased to Rs 11.68 lakh crore in year 2018-
 
Made genuine efforts to remove the hardships of farmers by providing them Soil Health Cards, quality seeds, irrigation scheme and Neem Coated Urea to remove shortage of fertilizers.
 
Rashtriya Kamdhenu Aayog
 
Increased the allocation for Rashtriya Gokul Mission to Rs 750 crore in the current year itself.
Setting up of "Rashtriya Kamdhenu Aayog" to upscale sustainable genetic up-gradation of cow resources and to enhance production and productivity of cows. The Aayog will also look after effective implementation of laws and welfare schemes for cows.
 
                                       Fishing
India is the second largest fish producing nation in the world
accounting for 6.3% of global production.
Government has decided to create a separate Department of Fisheries.
 
KCC to Animal Husbandry and Fisheries
 
In the last Budget, our Government announced the facility of
extension of Kisan Credit Card scheme (KCC) to Animal Husbandry and
Fisheries farmers.
To provide the benefit of 2% interest subvention to the farmers pursuing the activities of animal husbandry and fisheries, who avail loan through Kisan Credit Card.
Further, in case of timely repayment of loan, they will also get an additional 3% interest subvention.
 
Natural Calamities
All farmers affected by severe natural calamities, where
assistance is provided from National Disaster Relief Fund (NDRF), will be provided the benefit of interest subvention of 2% and prompt repayment incentive of 3% for the entire period of reschedulement of their loans.
 
 
 
 
Labour and Workers Dignity
 
High growth and formalistation of the economy has led to the
expansion of employment opportunities as shown in EPFO membership,
which has increased by nearly 2 crore in two years reflecting formalization of the economy and job creations.
 
'Pradhan Mantri Shram-Yogi Maandhan
 
Half of India’s GDP comes from the sweat and toil of 42 crore
workers in the unorganised.  The budget provides them
comprehensive social security coverage for their old age. Therefore, in
addition to the health coverage provided under ‘Ayushman Bharat’ and
life & disability coverage provided under ‘Pradhan Mantri Jeevan Jyoti
Bima Yojana’ and ‘Pradhan Mantri Suraksha Bima Yojana’, our Government proposes to launch a mega pension yojana namely 'Pradhan Mantri Shram-Yogi Maandhan' for the unorganised sector workers with monthly income upto Rs. 15,000.
This pension yojana shall provide them an assured monthly pension of Rs 3,000 from the age of 60 years on a monthly contribution of a small affordable amount during their working age. An unorganised sector worker joining pension yojana at the age of 29 years will have to contribute only Rs 100 per month till the age of 60 years. A worker joining the pension yojana at 18 years, will have to contribute as
little as Rs 55 per month only.
The Government will deposit equal matching share in the pension account of the worker every month. It is expected that at least 10 crore labourers and workers in the unorganised sector will avail the benefit of 'Pradhan Mantri Shram-Yogi Maandhan' within next five years making it one of the largest pension schemes of the world. A sum of Rs 500 crore has been allocated for the Scheme. The scheme will also be implemented from the current year.
 
De-notified, Nomadic and Semi- Nomadic communities
 
The Nomadic and Semi- Nomadic communities move from place to place in search of a livelihood. The Renke Commission and the Idate Commission have done commendable work to identify and list these communities. A Committee under NITI Aayog will be set up to complete the task of identifying De-notified, Nomadic and Semi- Nomadic communities not yet formally classified. Our Government will also set
up a Welfare Development Board under the Ministry of Social Justice and Empowerment specifically for the purpose of implementing welfare and development programmes for De-notified, Nomadic and Semi-Nomadic communities. The Board shall ensure that special strategies are designed and implemented to serve these hard-to-reach communities.
 
Women’s development to women led development
Government embarked upon a programme to deliver 8 crore free LPG connections under the Ujjwala Yojana. More than 6 crore connections have already been given and the remaining will get free gas connections by next year.
 
More than 70% of the beneficiaries of Pradhan Mantri MUDRA
Yojana are women who are getting affordable and collateral-free loans to start their own businesses.
Amongst many measures, benefits of Maternity leave of 26 weeks and Pradhan Mantri Matru Vandana Yojana for pregnant women have provided financial support to women while empowering them to participate in work.
 
Empowering Youth to fulfil their potential
 
Through Pradhan Mantri Kaushal Vikas Yojana, over 1 crore youth are being trained to help them earn a livelihood.
Under MUDRA Yojana 15.56 crore loans have been disbursed.
With job seekers becoming job creators, India has become the world’s second largest start-up hub.
 
Artificial Intelligence
In order to take the benefits of Artificial Intelligence and related
technologies to the people, a National Programme on 'Artificial Intelligence' has been envisaged by our Government.
This would be catalysed by the establishment of the National Centre on Artificial Intelligence as a hub along with Centres of Excellence.
 
A National Artificial Intelligence portal will also be developed soon.
 
Empowering MSMEs and Traders
 
Recently, a scheme of sanctioning loans upto Rs 1 crore in 59 minutes has been launched.
 
Government e-Marketplace (GeM), created by our Government two
years ago, has transformed public procurement by making it fully
transparent, inclusive and efficient.
 
Strengthening Defence and National Security
Govt  has implementes One Rank One
Pension (OROP).
The Government also announced substantial hike in the Military Service Pay (MSP) of all service personnel and special allowances given to Naval and Air Force personnel deployed in high risk duties.
 
Infrastructure development
 
Because of 'UDAAN Scheme', today an ordinary citizen is also travelling
by air.
 
The flagship programme of Sagarmala along the coastal areas of the country will develop ports for faster handling of import and export cargo.

For the first time, container freight movement has started on inland waterways from Kolkata to Varanasi.
Indian Railways
Indian Railways has experienced the safest year in its history.
All Unmanned Level Crossings on broad gauge network have been eliminated.
Introduction of the first indigenously developed and manufactured semi
high-speed "Vande Bharat Express" will give the Indian passengers world
class experience with speed, service and safety.
 
The Operating Ratio is expected to improve from 98.4% in 2017-18 to 96.2% in 2018-19 (RE) and further to 95% in 2019-20 (BE). 
 
Climate Change
Our commitment to promote renewable energy is reflected in setting up the International Solar Alliance, the first treaty based international inter-governmental organisation headquartered in India. India’s installed solar generation capacity has grown over ten times in last five years. This sector is now creating lakhs of new age jobs.
 
North East
The people of North East have also received significant benefits of
infrastructure development.
Arunachal Pradesh came on the air map recently and Meghalaya,
Tripura and Mizoram have come on India’s rail map for the first time.
 
Digital India Revolution
 
Under Make in India, mobile and parts manufacturing companies have increased from 2 to more than 268 providing huge job opportunities.
More than 3 lakh Common Service Centres (CSCs) employing about 12 lakh people, are digitally delivering several services to the citizens. The Common Service Centres are expanding their services and also creating digital infrastructure in the villages, including connectivity, to convert the villages into Digital Villages.
The Government will make 1 lakh villages into Digital Villages over next five years.
 
Jan Dhan-Aadhaar-Mobile (JAM) and Direct Benefit Transfer
 
In the last five years, nearly 34 crore Jan Dhan bank accounts were opened. Aadhaar is now near universally implemented. This has helped ensure the poor and middle class receive the benefits of Government schemes directly in their bank accounts by eliminating middlemen.
 
Entertainment
To promote entertainment industry - Single window clearance for ease of shooting films, available only to foreigners, is now going to be made
available to Indian filmmakers as well.
 
Direct Tax System
 
For making the life of our direct tax-payers easy, govt reduced tax rates, more for the common man and middle class, and made the interface with the tax department much simpler and largely faceless. Due to this, the tax collections increased significantly from Rs 6.38 Lakh crore in 2013-14 to almost Rs 12 lakh crore this year.
 
The number of returns filed have also increased from 3.79 crore to 6.85 crore showing 80% growth in tax base.
 
The Income Tax Department now functions online. Returns, assessments, refunds and queries are all undertaken online.
 
All returns will be processed in twenty-four hours and
refunds issued simultaneously.
Within the next two years, almost all verification and assessment of returns selected for scrutiny will be done electronically through anonymised back office, manned by tax experts and officials, without any personal interface between taxpayers and tax officers.
 
Income Tax for individual 




  • Govt has increased the basic exemption limit from Rs 2 lakh to Rs 2.5 Lakh and gave tax rebate so that no tax was payable by persons having income up to Rs 3 lakh.


  • We also reduced the tax rate from 10% to 5% for the tax slab of Rs 2.5 lakh to Rs 5 lakh and introduced Standard Deduction of Rs 40,000 for the salaried class.


  • Deduction of savings under section 80C was increased from Rs 1 lakh to Rs 1.5 lakh. Deduction of interest for self-occupied house


  • property was raised from Rs 1.5 lakh to Rs 2 lakh.


  
Income                       Rates of Income Tax for individual 
Up to Rs. 2,50,000   --  Nil
Rs. 2,50,000 to Rs. 3,00,000    --   5% - gave tax rebate so that no tax was payable by persons having income up to Rs 3 lakh.
Rs. 3,00,000 to Rs. 5,00,000    --  5%  - In case, taxable income is upto Rs. 5 lacs, the tax payable shall be nil on account of Tax Relief u/s 87A . Rebate under section 87A of Income Tax Act is obtainable in the form of a deduction from the tax liability
Rs. 5,00,000 to Rs. 10,00,000  --  20%
Above Rs. 10,00,000  --  30% 




  • Surcharge – Total Income Up to Rs. 50 Lakhs – Nil  


  • Total Income > 50 Lakhs < =1 Crore – 10% of Tax  


  • Total Income > 1 Crore – 15%


  • Education & Health Cess – 4% of the Income Tax & Surcharge (Earlier 3%)


Tax Rates* for Corporate 
Firms/Local Authority  -- 30%
Domestic Company  --  30% / 25%
Foreign Company  --  40%
 
Small Businesses
Special benefits and incentives were also given to small businesses
and start-ups. Overall compliance processes were simplified. Threshold
limit for presumptive taxation of business was raised from
Rs 1 crore to Rs 2 crore.
 
GST Reform  




  • Seventeen different taxes levied by the Central and


  • State/UT Governments with cascading effect of tax on tax, were


  • consolidated into one GST.


  • India became a common market.


  • GST has resulted in increased tax base, higher collections and ease of trade.


  • This will reduce the interface between the tax payer and the Government for day-to-day operations and assessments.


  • Now returns are fully online and e-way bill system is in place.


  • Inter-state movements have become faster, more efficient, and hassle free with no Entry Tax, check posts, and truck queues.


  • The high taxation levied on multiple commodities in the pre-GST regime has been rationalised and the burden on the consumer, especially the poor and the middle class, has been significantly reduced.


  • GST aims to benefit small traders, manufacturers and service providers.


  • In spite of such major rate reductions and relaxations, revenue trends are encouraging.


 Customs and Trading Across Border Reforms 



  • To promote the “Make in India” initiative, we have undertaken


rationalization of customs duties and procedures. Our Government has abolished duties on 36 capital goods.



  • A revised system of importing duty free capital goods and inputs for manufacture and export has been introduced, along with introduction of single point of approval under section 65 of the Customs Act.


  • Indian Customs is introducing full and comprehensive digitalization of export/import transactions and leveraging RFID technology to improve export logistics.


 
Black Money
 
The anti-black money measures taken by us during the last four and half years in the form of Black Money Law, the Fugitive Criminal Offenders Act, and Demonetisation.
The Fugitive Criminal Offenders Act allows for a person to be declared as a fugitive economic offender (FEO) if: (i) an arrest warrant has been issued against him for any specified offences where the value involved is over Rs 100 crore, and (ii) he has left the country and refuses to return to face prosecution. Upon declaration as an FEO, properties of a person may be confiscated and vested in the central government, free of encumbrances (rights and claims in the property).  Further, the FEO or any company associated with him may be barred from filing or defending civil claims.
 
Vision for the next Decade 
Vision for ten most important dimensions in 2030 are -




  1. The First Dimension of this Vision will be to build physical as well as social infrastructure for a ten Trillion Dollar economy and to provide ease of living. It will comprise next generation infrastructure of roads, railways, seaports, airports, urban transport, gas and electric transmission and inland waterways. On the social infrastructure side, every family will have a roof on its head and will live in a healthy, clean and wholesome environment. We will also build a quality, science oriented educational system with Institutes of Excellence providing leadership at the top.


  2. The Second dimension of our Vision is to create a Digital India reaching every sector of the economy, every corner of the country and impacting the life of all Indians. Digital Infrastructure and digital economy of 2030 will be built upon the successes achieved in recent years in digitisation of Government processes and private transactions. Our youth will lead us in this endeavour with innumerable start-ups creating digital India, and millions of jobs in this eco-system.


  3. Making India a pollution free nation with green Mother Earth and blue skies is the Third Dimension of our Vision. This India will drive on Electric Vehicles with Renewables becoming a major source of energy supply. India will lead the world in the transport revolution through electric vehicles and energy storage devices, bringing down import dependence and ensuring energy security for our people.


  4. Expanding rural industrialisation using modern digital technologies to generate massive employment is the Fourth Dimension of our Vision. This will be built upon the Make in India approach to develop grass-roots level clusters, structures and mechanisms encompassing the MSMEs, village industries and start-ups spread in every nook and corner of the country. India is now on the way to becoming a global  anufacturing hub in various sectors including automobiles and electronics, defence and medical devices. Our rivers and water bodies are our life supporting assets. Our Government has worked vigorously for cleaning River Ganga.


  5. Fifth Dimension of our Vision for India of 2030 is Clean Rivers, with safe drinking water to all Indians, sustaining and nourishing life and efficient use of water in irrigation using micro-irrigation techniques.


  6. India’s long coastline has the potential of becoming the strength of the economy, particularly through exploitation of the Blue Economy, to ensure better standards and quality of life for a large number of people living in the coastal areas. Our efforts in the Sagarmala programme will be scaled up and we will develop other inland waterways faster. Our coastline and our ocean waters powering India’s development and growth is the Sixth Dimension of our Vision.


  7. The Seventh Dimension of our Vision aims at the outer skies. Our space programme – Gaganyaan, India becoming the launch-pad of satellites for the World and placing an Indian astronaut into space by2022 reflect this dimension of our vision. Making India self-sufficient in food, exporting to the world to meet their food needs and producing food in the most organic way is the


  8. Eighth Dimension of our Vision. High farm production and productivity will be achieved through modern agricultural practices and value addition. An integrated approach towards agro and food processing, preservation, packaging and maintenance of the cold chain will be our focus of attention.


  9. A healthy India is the Ninth Dimension of our Vision. We will be aiming at healthy society with an environment of health assurance and the support of necessary health infrastructure. Our Government has rolled out the Ayushman Bharat scheme. By 2030, we will work towards a distress free health care and a functional and comprehensive wellness system for all. Such a healthy India built with the participation of women having equal rights and concern for their safety and empowerment.


  10. Our Vision can be delivered by Team India - our employees working together with the elected Government, transforming India into a Minimum Government Maximum Governance nation. This is the Tenth Dimension. Our India of 2030 will have a proactive and responsible bureaucracy which will be viewed as friendly to people.


With this comprehensive ten-dimensional Vision, we will create an India where poverty, malnutrition, littering and illiteracy would be a matter of the past. India would be a modern, technology driven, high growth, equitable and transparent society.
 
Fiscal Programme for 2019-20 and beyond 




  • Pegs the fiscal deficit of year 2019-20 at 3.4% of GDP. Target of 3% of fiscal deficit to be achieved by 2020-21.


  • Total expenditure rises from Rs 24,57,235 crore in 2018-19 RE to


  • Rs 27,84,200 crore in 2019-20 BE, a rise of approximately 13.30%.


  • Fiscal deficit brought down to 3.4% in 2018-19 RE from almost 6% seven years ago


  • Total expenditure increased by over 13% to Rs.27,84,200 crore in 2019-20 BE


  • Capital Expenditure for 2019-20 BE estimated at Rs. 3,36,292 crore


  • Centrally Sponsored Schemes (CSS) allocation increased to Rs. 3,27,679 crore in BE 2019-20


  • National Education Mission allocation increased by about 20% to Rs. 38,572 crore in BE 2019-20


  • Allocation for Integrated Child Development Scheme (ICDS) increased by over 18% to Rs. 27,584 crore in BE 2019-20


  • Substantial increase in allocation for the Scheduled Castes and Scheduled Tribes


  • Government confident of achieving the disinvestment target of 80,000 crore


  • Focus now on debt consolidation along with fiscal deficit consolidation programme


 


Saturday, 16th Feb 2019, 04:16:51 PM

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