FM Sitharaman’s budget aims to propel India into a new term of prosperity, development, and holistic growth and consequently ‘liberate’ India into a first world nation.
Union Budget 2019 wrapped up with Finance Minister Nirmala Sitharaman concluding her 2.5-hour long speech. Before going into what the new Finance Minister’s maiden budget is all about and what Modi-led government’s second term is going to bring, it’s best to look back and reflect on what was originally BJP’s stance on how the country ought to progress.
Back to back general election wins for the BJP suggest the following things: 1) The proposed plan of action initially put forth by Modi-led government’s first term appealed to the masses. 2) The win cemented the country’s belief in that plan of action.
The finance minister said, “Between 2014 and 2019, BJP provided rejuvenated Centre-state dynamic, cooperative federalism, GST Council and a strident commitment to fiscal discipline; set the ball rolling for a New India”
We take a look at the highlights of Budget 2019 and the reform and policy announcements by FM Sitharaman.
What all has been achieved?
- India’s private sector aided industrial growth.
- 96 million toilets have been constructed since Oct 2012.
- 30,000km of roads built with green technology.
- 350 million LED bulbs were distributed under Ujala scheme.
- The Udan scheme is providing air connectivity to the common man. All these programmes are also helping bridge rural and urban divide.
- It took 55 years to become $1 trillion dollar economy, only 5 years to add $1 trillion more.
- New metro rail projects have been approved during 2018-19. Also, during 2019, 210 km of metro lines have been operationalized.
- National Common Mobility Card was launched by PM Modi in March this year. This will enable people to pay multiple transport charges across India. This card runs on RuPay card and allows users to pay bus charges, parking charges, etc.
- NPAs by banks have reduced by 1 trillion rupees.
- 6% y-o-y growth in foreign investments.
- SWAYAM has been successful in providing Open Online courses.
- India’s sovereign external debt to GDP is at less than 5%.
- International Yoga Day as an example of India’s soft power was highlighted.
- Over 2 crore rural Indians have been made digitally literate.
- Fiscal deficit for 2019/20 seen at 3.3% down from 3.4% of GDP.
In her speech, the above achievements were the ones that the Finance Minister chose to highlight as the most significant. Hoping to set the stage for what’s to come, a snowball effect.
Targets & Future Plans
The Union budget was not all to different from the interim budget. Given below is a list of all proposed plans, reforms and a path that has been laid out. This is the road yet to be taken:
For Transport
- Aircraft financing and leasing activities are on the table. It’s about time that India moves into aviation finance.
- Railway infrastructure needs investment of 50 trillion rupees b/w 2018-30.
- The ambitious programme of Bharatmala will help develop roads and highways, while Sagarmala will enhance port connectivity.
- 125,000 km of road to be upgraded over the next 5 years at a cost of Rs. 802.5 billion.
For MSMEs
- Formulation of a model tenancy law will happen. For ease of access MSMEs will be given loans of up to Rs.1 Crore.
- Electronic fund raising platform for listing social enterprises was proposed (payment platform for MSMEs).
- PM Karam Yogi Maan Dhan scheme will extend pension benefits to 3 crore retail traders and shopkeeper with less than Rs.1.5 crore in revenue.
- Exclusive channel to be started for start-ups.
For Investments and Market
- India is all set to become a $3 trillion economy current fiscal year.
- The Finance Minister stresses on the need to invest heavily in infrastructure, job creation. (addressing unemployment).
- Action plans to deepen market for long-term bonds, corporate bonds, to be put in place.
- Min. public shareholding in listed companies is proposed to be increased.
- FM stresses on the need to know your customer norms for foreign portfolio investors in order to streamline.
- Increase Foreign Direct Investment in aviation, media and animation. Ease of FDI norms for single-brand retail was suggested.
- FDI must be further opened up into insurance sector.
- The FM proposes to merge non-resident portfolio schemes with foreign portfolio investment route.
- 100 trillion rupees to be invested in infrastructure in the next 5 years.
- Propose to issue Aadhar cards to NRIs with Indian passports after arrival without mandatory wait of 180 days. Ease of KYC.
- Indian Railways will be encouraged to invest more in suburban networks.
On Ease of Living
- Jal ministry focus on providing adequate drinking water.
- 35 crore LED bulbs have been distributed through Ujala Yojana, leading to a cost-saving of ₹18,341 crore annually. India is going to be free of incandescent bulbs.
- Aadhar card and Pan card interchangeable.
- 1.95 crore houses proposed to be provided under PMAY Grameen by 2021.
- 18 new embassies in Africa approved.
- Upfront incentive to be offered on purchase of EVs.
- Using rivers for cargo transportation, de-congesting railways and roadways.
On Youth and Research
- Proposal for a national research foundation was introduced. All research grants given by different ministries independent of each other will be assimilated.
- ‘Study in India’ programme to focus on bringing foreign students to study in India.
- Archaic labour laws are to be streamlined into 4 labour codes.
- India has emerged as a major space power. Time has come to harness this ability commercially. New Space India Limited, a public sector enterprise, has been incorporated to tap the benefits of R&D carried out by ISRO. The company will spearhead commercialization of various space products.
On Banking and Finance
- Allow an additional tax deduction of 150,000 rupees on interest paid on housing loans for self-occupied house owners. This will come up to enhanced interest reduction of upto ₹3.5 lakh on loans for affordable homes.
- Public sector banks to be provided 700 billion rupees of capital.
- Social Stock Exchange under SEBI proposed.
- Strengthen RBI’s regulatory authority over NBFCs.
- Pension benefit to be extended to around 3 crore retail traders and shopkeepers with an annual turnover less than 1.5 crores under Pradhan Mantri Karam Yogi Man Dhan Scheme.
- Govt. to set a target of over 1 trillion rupees of disinvestment proceeds in FY 2019/20.
- Introduction of new series of coins is in the offing Rs. 20 coins.
- 17 iconic tourism sites are being developed as world-class. destinations. Digital repository proposed for preserving tribal history.
On Taxation
- Tax revenues increased by 78%.
- All companies with annual turnover of up to 4 bn to have a corporate tax of 25%.
- Providing additional income tax deduction of 150,000 rupees on interest paid on loans taken to purchase EVs.
- Propose to give relief in securities transaction tax.
- Faceless scrutiny of tax assessment.
- Finance Minister Nirmala Sitharaman says propose to enhance tax surcharge on HNIs with income over 20 million rupees a year.
On Agriculture
Zero – budget farming model will double farmers’ income by 2022. Zero budget farming is a form of gardening as a self-sustainable practice with minimum external intervention.
This concept of zero budget natural farming (ZBNF) was first propagated 25 years ago by Subhash Palekar as a movement for farmers who were in debt due to the Green Revolution and is now being used by a large number of farmers across the country.
