union budget 2020

Union Budget 2020 – 2021

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All eyes were set on the Union budget 2020 on the 1st of Feb. The whole country was glued to the television screens, people were watching live updates on their phones, everybody was in hopes of a revival of the economy. This economy had seen one the worst economic slowdown in the past decades, a drastic fall in GDP in the past year, demonetization and a lot more. According to a source, India’s GDP growth had come down to 5.6 percent in 2019 from 7.4 percent in 2018. India’s economic slowdown is lasting longer than expected and the situation is steadily getting out of control. In a time like this, all eyes were set on Finance minister, Nirmala Sitharaman as she presented her second budget. This is the second budget from Narendra Modi led NDA government’s term. The central idea of the Union budget 2020 are:

  • Aspirational India
  • Economic development
  • A caring society

Here are some highlights of the Union Budget 2020:

TAX:
Tax Budget

The government has announced a new tax regime, however, those who want to remain in the old regime can continue to pay at old rates. The new tax regime is as follows:

INCOME TAX
  • Upto Rs. 2.5 lakhs
  • Between INR 5 lakhs and INR 7.5
  • Between INR 7.5 lakhs to 10 lakhs
  • Between 10 lakhs to 12.5 lakhs
  • Between 12.5 lakhs to 15 lakhs
  • Above 15 lakhs
  • Rs 2.5 lakh to Rs 5 lakh

  • NIL
  • Reduced to 10% from the current 20%
  • Reduced to 15% from the current 20%
  • Reduced to 20% from the current 25%
  • Reduced to 25% from the current 30%
  • Continued at 30%, without any exceptions
  • 5% (Tax rebate of Rs 12,500 available under section 87A)

Apart from this over 70 different types of deductions have been removed, also companies will no longer have to pay Dividend Distribution Tax (DDT) and an Aadhaar-based verification will be introduced for GST compliance. (Tax slab source: The Hindu)

Also read: How to file ITR online?

AGRICULTURE

Agriculture Budget

The government indicated that The Prime Minister Kusum scheme has reduced the dependence of farmers on diesel and kerosene. Now, PM Kusum will cover 20 lakh farmers for stand-alone solar pumps and further 15 lakh farmers for grid-connected pumps. The government will now revise incentives for the use of chemical fertilizers and for the creation of efficient warehouses on PPP mode. SHGs run village storage scheme will be launched and integration of e-NWR with e-NAM.

  • “Kisaan Rail” and “Krishi Udaan” will be launched by the Indian Railways and Ministry of Civil Aviation respectively for a seamless national cold supply chain for perishables.
  • Doubling of the milk processing capacity by 2025
  • Agriculture credit target of INR 15 lakh crore for 2020-21
  • Raise fishery exports to INR 1 lakh crore by 2024-25
EDUCATION
Education budget

However, the education sector will now be open to FDI and new education policy will be announced. A total of 3000 crores will be given for skill development and the degrees offered by the top 100 NIRF-ranked institutes can soon take online.

About 150 educational institutions will start apprenticeship embedded courses

  • Ind-SAT to be conducted in Asia and Africa understudy in India program.
  • Internship opportunities to fresh engineers by urban local bodies
  • Special bridge courses will be introduced to improve skill sets of those seeking employment abroad.
HEALTHCARE
Healthcare Budget

Therefore, A total of INR 69,000 crore has been provided for the healthcare sector of which PM Jan Arogya Yojana will get INR 6,400 crore. The government will extend “Mission Indra Dhanush” to cover new diseases and new vaccines and Fit India will also be a part of this mission.

  • More than 20,000 hospitals will be impaneled hospitals under PM Jan Arogya Yojana.
  • “TB Harega Desh Jeetega” campaign launched to end TB by 2025
  • Expansion of Jan Aushadhi Kendra scheme to all districts by 2024.
  • A viability gap funding has been funding proposed for setting up hospitals in the PPP model.
INFRASTRUCTURE
Infrastructure Budget

The government will soon launch a national logistics policy. The government has announced:

  • Accelerated development of highways
  • Four station redevelopment projects have been announced
  • 150 passenger trains through PPP mode
  • 100 airports will be developed under UDAAN
  • At least one major port will be corporatized
  • The government has proposed a Bengaluru suburban rail project at a cost of 18,600 crores.

While presenting the Union Budget, Finance minister Nirmala Sitharaman said “In May 2019, Prime Minister Narendra Modi received a massive mandate to form the government again. People of India have unequivocally given their Janaadesh for not just political stability but have also reposed their faith in our economic policy. Above all, This is a budget to boost their income and enhance their purchasing power.” (source: The Hindu)

There are many factors that may come into play while giving shape to the announced plans by the NDA government and we might another blog on it another time but we want you to tell us what you think about the Union Budget and if we missed out on something. In addition, We love creating new blogs every week on trending topics in Banking and Finance, if there is anything you want us to write about feel free to drop in your suggestions, we would love to do a blog on it.

Until next time …..happy buying!

One comment

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