Union Budget 2020 Highlights
Nirmala Sitharaman, the current Finance Minister of India presented today the annual Union Budget 2020-2021. She is the second lady Finance Minister of India after Late Prime Minister Indira Gandhi. This is her second Union Budget under the NDA regime. Till 2016, Union Budget was presented on the last working day of February but from 2017 it was presented on the first working day of February. Before going into the details of Union Budget 2020-2021 let’s have a quick look into the meaning of Indian Budget.
What Is Union Budget?
Article 112 of the Indian Constitution defines Union Budgets as a statement of the estimated receipts and expenditure of the government for that particular year. It is also referred as The Annual Financial Statement. It keeps the account of the government finances for the financial year that starts from 1st April to 31st March.
Union Budget Composition
The Union budget comprises of Revenue and Capital Budget which are defined as follows-
- Revenue Budget – It records all the revenue receipts and expenditure that is earned or spent on running the operations for that particular year.
- Capital Budget – It has accounts for receipts and capital payments which are government related.
Besides this the receipts and disbursements of the government comprise of various types of funds namely- The Consolidated Fund of India, The Contingency Fund and The Public Account which are mentioned below-
- Consolidated Fund– It includes revenues received and expenses made by the government. It is the main source of income for the government and is at the disposal of the Parliament.
- Contingency Fund– It is created to meet some urgent or unforeseen expenditure of the government. It is an imprest account and at the disposal of the President.
- The Public Account Fund– All the other public money which the government of India directly receives or is collected on its behalf is credited under this fund. It is at the disposal of the executives.
Union Budget Theme
The Union Budget 2020-2021 is woven around three important themes-
- Aspirational India where all sections of the society seek better standards of living, with access to health, education and better jobs.
- Economic development for all i.e. – “SabkaSaath, SabkaVikas, SabkaVishwas” thus entailing reforms across swathes of the economy
- Caring Society that is both humane and compassionate.
Union Budget 2020-2021 Important Highlights
Here are the important points of the Union Budget 2020-2021
Agriculture, Irrigation and Rural Development
- Doubling farmers income by 2020
- Focus on sustainable cropping patterns
- Comprehensive measures for 100 water stressed districts
- The PM- KUSUM scheme will be expanded to 20 lakh farmers for setting up stand-alone solar pumps
- Also to help another 15 lakh farmers solarise their grid-connected pump sets.
- A scheme to enable farmers to set up solar power generation capacity on their barren lands and sell it to the grid would be operationalized.
- Also encourage states to follow model laws
- An exercise to map and geo-tag agriwarehousing, cold storage, and reefer van facilities etc. by NABARD.
- KrishiUdaan to be launched by the Ministry of Civil Aviation on international and national routes
- Expansion of Integrated farming systems in rainfed areas
- 15 crore has been set up as agriculture credit target for 2020-21
- Blue economy framework for the development, management and conservation of marine fishery resources.
- Fund allocation– 1.60 lakh crore has been kept aside for agriculture, irrigation and allied activities and 1.23 lakh crore for Rural development & Panchayati Raj
Water, Wellness and Sanitation`
- TB Harega Desh Jeetega- campaign efforts strengthen to end Tuberculosis by 2025.
- Expansion of Jan Aushadhi Kendra Scheme to all districts offering 2000 medicines and 300 surgical by 2024.
- Swachh Bharat Mission has been allocated 12,300 crore
- Aiming to provide piped water supply to all households for which 3.60 lakh crore has been approved under Jal Jeevan Mission.
- Fund Allocation– Health sector to get 69,000 crores.
Education and Skills
- The New Education Policy to be announced soon as by 2030, India would have the largest working-age population in the world.
- By March 2021,150 higher educational institutions to start apprenticeship embedded degree/diploma courses.
- Degree level full-fledged online education programme to be offered by institutions who are ranked within top 100 in the National Institutional Ranking framework to make education available to all.
- A National Police University and a National Forensic Science University to be set up.
- Fund Allocation– 99,300 crore for the education sector and about ` 3,000 crores for skill development.
Commerce, Industry and Investment
- Proposal to set up Investment Clearance Cell that will provide “end to end” facilitation and support.
- Five new smart cities to be developed in collaboration with States in PPP mode.
- National Technical Textiles Mission with a four-year implementation period from 2020-21 to 2023-24 at an estimated outlay of 1480 crore.
- NIRVIK scheme for export credit disbursement for higher insurance coverage, premium reduction and simplified procedure for claim settlements
- Fund Allocation– 27,300 crore for development and promotion of Industry and Commerce
- A National Logistics Policy to be released soon
- Project preparation facility for infrastructure projects
- Delhi-Mumbai Expressway and two other packages to be completed by 2023 and Chennai-Bengaluru Expressway to start soon.
- Four station redevelopment projects and operation of 150 passenger trains to be done through PPP mode.
- Solar power capacity to be set up alongside the rail tracks, on the land owned by the railways
- The Jal Vikas Marg on National Waterway-1 to be completed and 890 Km Dhubri-Sadiya connectivity to be done by 2022.
- 100 airports would be developed by 2024 to support the Udaan scheme as air fleet number is expected to grow from 600 to 1200
- Fund Allocation- 1.70 lakh crore for transport Infrastructure
- The Ministry intends to promote “smart” metering by urging all the States and Union Territories to replace conventional energy meters by prepaid smart meters in the next 3 years.
- The national gas grid will be expanded from the present 16200 km to 27000 km.
- Fund Allocation-22,000 crore to power and renewable energy sector
- Policy to enable the private sector to build Data Centre parks throughout the country.
- To link 100,00 gram panchayats by Fibre to the Home (FTTH) connections through Bharatnet.
- 6000 crore to Bharatnet programme
- Knowledge Translation Clusters to be set up
- Two new national level Science Schemes, to create a comprehensive database.
- Focus on Quantum technology that is opening up new frontiers in computing, communications, cyber security with wide-spread applications
- Fund Allocation– 8000 crore over a period of five years for the National Mission on Quantum Technologies and Applications.
Women & Child, Social Welfare
- Beti Bachao Beti Padhao has yielded tremendous results as the gross enrolment ratio of girls across all levels of education is now higher than boys.
- Fund Allocation– 35600 crore for nutrition-related programmes
- Fund of 28,600 crore for programs that are specific to women
- For the welfare of Scheduled Castes and Other Backward classes, the budget has a provision of about 85,000 crore.
- For Scheduled tribes the Budget has an amount of about 53,700 crore.
- For Senior citizens and Divyang an enhanced allocation of about 9,500 crore is being provided
Culture & Tourism
- Five archaeological sites to be developed as iconic sites which are – Rakhigarhi (Haryana), Hastinapur (Uttar Pradesh) Shivsagar (Assam), Dholavira (Gujarat) and Adichanallur (Tamil Nadu).
- Re-curation of the Indian Museum in Kolkata
- Old Mint building Kolkata to have a museum on Numismatics and Trade and a Tribal Museum to be set up in Ranchi (Jharkhand).
- Ministry of Shipping to build a maritime museum at Lothal- the Harrapan age maritime site near Ahmedabad.
- Fund Allocation– 3,150 crore for Ministry of Culture
- Foreign exchange earnings grew 7.4% to 1.88 lakh crores in tourism
- India moved up from rank 65 in 2014 to 34 in 2019 in the Travel & Tourism Competitive Index.
- Fund Allocation– 2,500 crore for tourism sector
Environment & Climate Change
- The Coalition for Disaster Resilient Infrastructure (CDRI) with its Secretariat in Delhi to be implemented effectively from 1st January 2021.
- Thermal power plants that are old and their carbon emission levels are high are to be closed and the land will be used for alternative purposes
- Cities having a population above one million to formulate and implement plans for ensuring cleaner air and 4400 crore will be provided to these cities.
- 30,757 crore has been provided to newly created Jammu and Kashmir Union Territory and an amount of 5,958 crore has been provided for the Union Territory of Ladakh.
- India to host G 20 presidency in the year 2022- the year of 75th anniversary of independence of Indian Nation for which 100 crore has been laid aside for preparations
- DICGC to increase Deposit Insurance Coverage for a depositor from one lakh to five lakh per depositor.
- To strengthen the Cooperative Banks, amendments to the Banking Regulation Act have been proposed
- NBFCs eligible for debt recovery under the SARFAESI Act 2002 is proposed to be reduced from 500 crore to asset size of 100 crore or loan size from existing 1 crore to 50 lakh.
- Remaining holding of Government of India in IDBI Bank to be sold to private, retail and institutional investors through the stock exchange
- The new National Policy on Official Statistics will be out soon that would use the latest technology including AI.
- Necessary amendments to the Factor Regulation Act 2011.
- National Recruitment Agency (NRA) to be set up as an independent, professional, specialist organisation for conduct of a computer-based online Common Eligibility Test for recruitment to NonGazetted posts.
- An app-based invoice financing loans product to be launched
- A scheme for technology upgradations, R&D, and business strategy will be anchored by EXIM Bank together with SIDBI with an allocation of 1000 crore.
- Certain categories of Government securities would be opened fully for non-resident investors
- FPI limit in corporate bonds which is currently at 9% of outstanding stock, to be increased to 15% of the outstanding stock.
- MSMEs window for restructuring of debt to be extended till March 31, 2021.
- GIFT City to set up an International Bullion exchange(s) in GIFT-IFSC as an additional option for trade by global market participants.
- A fiscal deficit of 3.8% in 2019-20 and 3.5% for 2020-21 is estimated
- A substantial part of the borrowings for the financial year 2020-21 would go towards Capital expenditure of the Government which scaled by more than 21%.
Personal Income Tax Simplification, Miscellaneous
- To bring a new and simplified personal income tax regime wherein income tax rates will be reduced for the individual taxpayers.
- Substantial tax benefit will be given to a taxpayer depending upon exemptions and deductions claimed by him/her.
- The new tax regime shall be optional for the taxpayers
- Removal of the DDT or Dividend Distribution Tax and adoption of the classical system of dividend taxation under which the companies would not be required to pay DDT and the dividend will be taxed in the hands of the recipients at their applicable rate.
- Concessional corporate tax rate of 15% to be extended to new domestic companies engaged in electricity generation.
- 100% tax exemption to Sovereign Wealth Fund of foreign governments in interest, dividend and capital gains income with respect to investment made in infrastructure before 31st March, 2024 with a minimum lock in period of 3 years.
- Co-operative societies to be exempted from Alternative Minimum Tax or AMT.
- To reduce direct taxes litigation a scheme ‘Vivad Se Vishwas’ would be created where a taxpayer has to pay only the amount of the disputed taxes and will get complete waiver of interest and penalty provided he pays tax by 31st March, 2020.
- A system to be launched soon under which PAN will be allotted online instantly on the basis of Aadhaar without any filling up of detailed application form.
- Custom duty exemptions to be reviewed comprehensively by September, 2020 for their relevance.
- Customs duty raised on footwear and furniture.
- Basic customs duty on imports of newsprint and light-weight coated paper to be reduced from 10% to 5%.
- Anti-dumping duty on PTA or Purified Terephthalic Acid is being abolished.
- Health cess on specified medical equipment
- National Calamity Contingent duty or NCCD on Cigarettes and tobacco products to be increased.
- Incentives in IFSC, municipal bonds and offshore borrowing as well in affordable housing.
You can also download Union Budget 2020 highlights in the form of pdf that is absolutely free from the link mentioned below
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Keep sharing such articles!