On Saturday morning Union Finance Minister Nirmala Sitharaman presented the Union Budget 2020. As expected, it wasn’t well-received; at the time of writing this piece, the stock market has dropped to 987 pts. Investors and industry alike have condemned the budgets.
The most interesting comment has come from P Chidambaram, Former Union Finance Minister. In a press conference he said, “Did the FM read the Economic Survey? Was the chief economic adviser privy to the content of the Budget speech? I think the answer to both questions is in the negative.”
Key Highlights of the Budget:
- The most common thing that a working-class look for in a budget is Income Tax relief! Yes, there is some relief.
- The other notable point is Nirmala Sitharaman is expecting a GDP growth of 10%.
- The Finance Minister has announced Rs 99,300 crore for the education sector.
- Rs 1.7 lakh crores has been allocated for transport, infrastructure including Railways
The Union Budget 2020 comes at a time when India is staring at an estimated 5 percent annual rate of expansion.
A day before the budget announcement, Nirmala Sitharaman tabled the Economic Survey in the Parliament made with the guidance of Chief Economic Advisor KV Subramanian. In the survey, the government presented various aspects for a better fiscal, from the ease of doing business to the Chinese model of job creation and most interestingly ‘Thalinomics’.
Keeping wealth creation as the broad theme KV Subramanian had highlighted the need for ‘Assemble in India for the world’. He stated that wealth is both a cause and effect of investment, that’s why it is important for us to focus on wealth creation, reported Economics Times.
While tabling the Union Budget today, Sitharaman extends tax holiday for affordable housing by a year. The government also plans to extend the additional reduction of ₹1.5 lakh for interest paid on home loans taken for the purchase of affordable housing by another year.
Tax and Reliefs
The government has also announced big income tax relief, from 5 to 7.5 lakh people will pay 10% and from 7.5 to 10 it will be 15% from earlier 20% income tax. People earning in the range of 10 to 12.5 and 12.5 to 15 lakh will also get 5% to 10% relief, they will now pay 20% and 25% respectively.
Talking about bank deposits or savings, the Finance Minister announced to increase the insurance coverage from Rs 1 lakh to 5 lakh.
The expected GDP to grow is estimated at 10 percent as per Sitharaman’s budget. However, Sitharaman did not mention any number of expected Jobs in the coming years but she has allocated Rs 99,300 crore for the education, additionally Rs 3,000 crore in the skill development. Adding, she also said that 150 higher education institutions will provide apprentices embedded in the real-time course for in-hand training.
On the other hand, KV Subramanian suggested that India can look to surpass China’s business model which created 7 crore jobs in just five years in their export-led industry.
As per the Union Budget 2020, Rs 1.7 lakh crores has been allocated for transport, infrastructure including Railways. However, the government’s aim to achieve $5 trillion GDP (as per the economic survey) by 2024-25 is very challenging; as the survey highlighted that the country needs to spend$1.4 trillion on infrastructure to remove the constraints in growth.
Food and Travel
It was also interesting to note that foreign tourist arrivals in India have seen a spike from 4.5 lakh in 2015 to 23.69 lakh in 2018 and stood at 21.75 lakh in January-October 2019, recording nearly 21 percent year-on-year growth thanks to e-visas which are available for 169 countries.
We have never thought about the fact that the government measures our Thali also, to be precise Vegetarian and Non-Vegetarian categories as well. The survey stated that the affordability of vegetarian ‘thallis’ has improved by 29% while that of non-vegetarian ‘thallis’ improved by 18% in the last 13 years.