Finance minister Nirmala Sitharaman is all set to announce Union Budget 2020 — her second — on February 1. Sitharaman, India’s first full-time female finance minister, presented her maiden budget on July 5 last year amid increasing economic challenges including slowing growth, high unemployment, declining savings and a slump in consumption. The July 5 budget was also the first of the new Modi government after the BJP-led NDA came to power for the second time following a thumping victory in May.
While the government had to revisit its budget in a month and announce a rollback of its big bold move of a hike in surcharge for super-rich after it spooked the stock market, the challenges — more or less — remain the same — or even worse — this time around with India’s GDP growth expected to be at a 11-year low for FY20. With 10 days left for the budget, here’s a look at the highlights of the last budget announcements:
India to become a $5 trillion economy by 2024.
The government proposed to spend Rs 27,86,349 crore in FY20.
The government targeted to achieve a nominal GDP growth rate of 12 percent for FY20.
Revenue deficit was targeted at 2.3 percent of GDP while the fiscal deficit was aimed at 3.3 percent of GDP.
Divestment target of Rs 1.05 lakh crore was announced for FY 20.
The surcharge on income tax for individuals earning between Rs 2 crore and Rs 5 crore increased to 25 percent and for those earning over Rs 5 crore hiked to 37 percent. This was withdrawn later.
The threshold for firms paying corporate income tax of 25 percent was raised to Rs 400 crore from Rs 250 crore.
An additional tax deduction of up to Rs 1,50,000 to be provided on interest paid on loans for self-occupied house owners.
A tax deduction of up to Rs 1,50,000 to be provided on interest paid on loans to purchase an electric vehicle to promote e-vehicles.
An increase of Re 1 was announced in the Road and Infrastructure Cess on petrol and high-speed diesel per litre. Excise duty too was hiked by Re 1 per litre for these.
The customs duty on gold and precious metals was hiked from 10 percent to 12.5 percent.
Partial guarantee (for first 10 percent of loss) for public sector lenders for funds provided in a pooled manner to NBFCs. Further, Rs 70,000 crore was announced for the recapitalisation of PSBs.
The government announced its plans to raise a part of its borrowings abroad in foreign currency.
Rs 100 lakh crore to be invested in infrastructure over five years.
Minimum public shareholding in listed companies to be hiked from 25 percent to 35 percent.
The existing policy of 51 percent government stake in non-financial PSUs to be modified to include stake of government-controlled institutions.
100 percent Foreign Direct Investment (FDI) allowed for insurance intermediaries.
Pradhan Mantri Karam Yogi Maandhan Scheme, a new pension scheme, was announced for traders and small shopkeepers with an annual turnover of less than Rs 1.5 crore.
PAN and Aadhaar interchangeability permitted for ITR for those not having PAN cards.
Duty hike on auto parts, video recorder, CCTV camera, tiles, cashew kernels, and others.
2 percent TDS on withdrawals of Rs 1 crore a year from the bank account on business transactions.
Aadhaar card on arrival in India for NRIs.
Rs 3,000 pension per month for the informal sector workers.
Allocation of Rs 65,837 crore for railways and the highest ever outlay for capital expenditure of Rs 1.60 lakh crore.
Private players to be brought in to operate train routes and modernisation of stations.
