Union Budget 2019-20

Question: Union Finance Minister Nirmala Sitharaman presented the Union Budget of India on July 5, 2019. Consider the following statement in relation to the budget and choose the correct option:
(1) Smt. Nirmala Sitharaman became the first women to present the Union Budget in the history of India.
(2) The budget mentions that more than 95% cities and 5.6 lakh villages declared ODF.
(3) Pradhan Mantri Matsya Sampada Yojana is a scheme for fishery launched in this budget.
(4) Fiscal deficit in FY 19 has been set at 3.3% of the GDP.
Correct option:
(a) 1,2 and 3
(b) 2, 3 and 4
(c) 1, 2 and 4
(d) All of the above
Answer: (b)
Related facts:

  • Union Finance Minister Smt. Niramala Sitharaman tabled the Union Budget 2019-20 in the Parliament on July 5 2019.
  • She became the second women in India to introduce a budget after the former Prime Minister Indira Gandhi.

Major Highlights of the Budget:

  • The government proposes to spend Rs 27,86,349 crore in 2019-20, which is 13.4% above the revised estimate of 2018-19.
  • 3.18 lakh crore rupees have been given for defense budget. This is 7.93 percent more than the year 2018-19, compared to 2 lakh 95 thousand 511 rupees and the last time it has increased by 20 thousand crore rupees.
  • A provision of Rs. 62,398 thousand crores has been made for the health sector. This has increased by 19 percent compared to the previous year.
  • Rs 65,837 crore has been allocated for Railways and Rs 1.60 lakh crore has been fixed for capital expenditure.
  • The government has assumed a nominal GDP growth rate of 12% in 2019-20. The nominal growth estimate for 2018-19 was 11.5%.
  • Ministry allocations: Among the top 13 ministries with the highest allocations, the highest percentage increase is observed in the Ministry of Agriculture and Farmers’ Welfare (82.9%), followed by Ministry of Petroleum and Natural Gas (32.1%) and Ministry of Railways (23.4%).
  • India is inching to become a 5 Trillion Dollar Economy. Indian economy to become a 3 trillion dollar economy in the current year.
  • There is a need for investment in infrastructure, digital economy, job creation in small and medium firms, initiatives to be proposed for kick-starting the virtuous cycle of investments.
  • MUDRA loans for ease of doing business have improved the cash facilitation to the needy sector leading to generation of SSI and MSMEs.
  • Around 70% of the total beneficiary in this is women. Measures related to MSMEs.
  • Pradhan Mantri Karam Yogi Maandhan Scheme: Pension benefits to about three crore retail traders & small shopkeepers with annual turnover less than Rs. 1.5 crore.
  • Rs. 350 crore allocated for FY 2019-20 for 2% interest subvention (on fresh or incremental loans) to all GST-registered MSMEs, under the Interest Subvention Scheme for MSMEs
  • India’s first indigenously developed payment ecosystem for transport, based on National Common Mobility Card (NCMC) standards, launched in March 2019.
  • Inter-operable transport card runs on RuPay card and would allow the holders to pay for bus travel, toll taxes, parking charges, retail shopping.
  • Massive push given to all forms of physical connectivity through Pradhan Mantri Gram Sadak Yojana, Industrial Corridors, Dedicated Freight Corridors, Bhartamala and Sagarmala projects, Jal Marg Vikas and UDAN Schemes.
  • State road networks to be developed in second phase of Bharatmala project.
  • Navigational capacity of Ganga to be enhanced via multi modal terminals at Sahibganj and Haldia and a navigational lock at Farakka by 2019-20, under Jal Marg Vikas Project.
  • A proposal for Rs. 50 lakh crore investments needed in Railway Infrastructure during 2018-2030. Public-Private-Partnership proposed for development and completion of tracks, rolling stock manufacturing and delivery of passenger freight services.
  • 657 kilometers of Metro Rail network has become operational across the country.
  • Upfront incentive proposed on purchase and charging infrastructure, to encourage faster adoption of electric vehicles. Only advanced-battery-operated and registered e-vehicles to be incentivized under FAME Scheme.
  • National Highway Programme to be restructured to ensure a National Highway Grid, using a financeable model.
  • Power at affordable rates to states ensured under ‘One Nation, One Grid’.
  • Credit Guarantee Enhancement Corporation to be set up in 2019-2020.
  • Government to organize an annual Global Investors Meet in India, using National Infrastructure Investment Fund (NIIF) as an anchor to get all three sets of global players (pension, insurance and sovereign wealth funds).
  • New Space India Limited (NSIL), a PSE, incorporated as a new commercial arm of Department of Space.

Overview:

 Actuals
2017-18
Budgeted
2018-19
Revised
2018-19
Budgeted
2019-20
% change
(RE 2018-19 to BE 2019-20)
Revenue Expenditure 18,78,833 21,41,77221,40,612 24,47,780 14.3%
Capital Expenditure 2,63,140  3,00,441  3,16,623  3,38,569 6.9%
Total
Expenditure
21,41,973 24,42,213 24,57,235 27,86,349 13.4%
Revenue Receipts 14,35,233 17,25,738 17,29,682 19,62,761 13.5%
Capital Receipts  1,15,678  92,199  93,155  1,19,828 28.6%
of which:          
Recoveries of Loans  15,633  12,199  13,155  14,828 12.7%
Other receipts (including disinvestments)  1,00,045  80,000  80,000  1,05,000 31.3%
Total Receipts (without borrowings)15,50,911 18,17,937 18,22,837 20,82,589 14.2%
Revenue Deficit  4,43,600  4,16,034  4,10,930  4,85,019 18.0%
% of GDP 2.6 2.2 2.2 2.3  
Fiscal Deficit  5,91,062  6,24,276  6,34,398  7,03,760 10.9%
% of GDP 3.5 3.3 3.4 3.3  
Primary Deficit  62,110  48,481  46,828  43,289 -7.6%
% of GDP 0.4 0.3 0.2 0.2  

Rupee comes from:

  • 21% Corporate Tax
  • 20% Borrowings and Other Liabilities
  • 19% GST
  • 16% Income Tax
  • 9% Non Tax Revenue
  • 8% Union Excise Duties
  • 4% Customs
  • 3% Non debt Capital Receipts

Rupee Goes to:

  • 23% States’ share of taxes and Duties
  • 18% Interest Payments
  • 13% Central Sector Schemes
  • 9% Defence
  • 9% Centrally Sponsored Schemes
  • 8% Subsidies
  • 7% Finance Comm. & Transfers

Direct Taxes:

  • Tax rate reduced to 25% for companies with annual turnover up to Rs. 400 crore.
  • Surcharge increased on individuals having taxable income from Rs. 2 crore to Rs. 5 crore and Rs. 5 crore and above.
  • India’s Ease of Doing Business ranking under the category of ‘paying taxes’ jumped from 172 in 2017 to 121 in the 2019.
  • Direct tax revenue increased by over 78% in past 5 years to Rs. 11.37 lakh crore
  • PAN and Aadhaar will become interchangeable. One can use Aadhaar number to file I-T Returns.
  • Rs. 5 lakh minimum limit announced for taxpayers.
  • Electricity and clean cooking facility to all willing rural families by 2022.
  • Affordable housing: Additional deduction up to Rs. 1.5 lakhs for interest paid on loans borrowed up to 31st March, 2020 for purchase of house valued up to Rs. 45 lakh.
  • Additional income tax deduction of Rs. 1.5 lakh on interest paid on electric vehicle loans.

Indirect Taxes:
Make In India

  • Basic Customs Duty increased on cashew kernels, PVC, tiles, auto parts, marble slabs, optical fiber cable, CCTV camera etc.
  • Exemptions from Custom Duty on certain electronic items now manufactured in India withdrawn.
  • End use based exemptions on palm stearin, fatty oils withdrawn.
  • Exemptions to various kinds of papers withdrawn.
  • 5% Basic Custom Duty imposed on imported books.
  • Customs duty reduced on certain raw materials such as:
  • Inputs for artificial kidney and disposable sterilised dialyser and fuels for nuclear power plants etc.
  • Capital goods required for manufacture of specified electronic goods.

Defence

  • Defence equipment not manufactured in India exempted from basic customs duty

Other Indirect Tax provisions

  • Export duty rationalised on raw and semi-finished leather
  • Increase in Special Additional Excise Duty and Road and Infrastructure Cess each by Rs. 1 per litre on petrol and diesel
  • Custom duty on gold and other precious metals increased

Grameen Bharat/ Rural India

  • Pradhan Mantri Awas Yojana – Gramin (PMAY-G) aims to achieve “Housing for All” by 2022.
  • Eligible beneficiaries to be provided 1.95 crore houses with amenities like toilets, electricity and LPG connections during its second phase (2019-20 to 2021-22).
  • Pradhan Mantri Matsya Sampada Yojana (PMMSY): A robust fisheries management framework through PMMSY to be established by the department of Fisheries.
  • Pradhan Mantri Gram Sadak Yojana (PMGS): 30,000 kilometers of PMGSY roads have been built using Green Technology, Waste Plastic and Cold Mix Technology, thereby reducing carbon footprint.
  • 1,25,000 kilometers of road length to be upgraded over the next five years under PMGSY III with an estimated cost of Rs. 80,250 crore.
  • 75,000 entrepreneurs to be skilled in agro-rural industry sectors.
  • 10,000 new Farmer Producer Organizations to be formed, to ensure economies of scale for farmers.
  • Zero Budget Farming in which few states’ farmers are already being trained to be replicated in other states.

Shahree Bharat/ Urban India

  • Pradhan Mantri Awas Yojana – Urban (PMAY-Urban)-
  • Over 81 lakh houses with an investment of about Rs. 4.83 lakh crore sanctioned of which construction started in about 47 lakh houses.
  • Over 26 lakh houses completed of which nearly 24 lakh houses delivered to the beneficiaries.
  • Over 13 lakh houses so far constructed using new technologies.
  • More than 95% of cities also declared Open Defecation Free (ODF).
  • Almost 1 crore citizens have downloaded Swachhata App.
  • Target of achieving Gandhiji’s resolve of Swachh Bharat to make India ODF by 2nd October 2019.
  • To mark this occasion, the Rashtriya Swachhta Kendra to be inaugurated at Gandhi Darshan, Rajghat on 2nd October, 2019.
  • Gandhipedia being developed by National Council for Science Museums to sensitize youth and society about positive Gandhian values.

India’s water security

  • New Jal Shakti Mantralaya to look at the management of our water resources and water supply in an integrated and holistic manner.
  • Jal Jeevan Mission to achieve Har Ghar Jal (piped water supply) to all rural households by 2024.
  • Under Swachh Bharat Abhiyan, 9.6 crore toilets constructed since Oct 2, 2014. More than 5.6 lakh villages have become Open Defecation Free (ODF).
  • Pradhan Mantri Awas Yojana – Urban (PMAY-Urban): Over 81 lakh houses with an investment of about Rs. 4.83 lakh crore sanctioned of which construction started in about 47 lakh houses.
  • Over 26 lakh houses completed of which nearly 24 lakh houses delivered to the beneficiaries. More than 95% of cities also declared Open Defecation Free (ODF).

Youth

  • New National Education Policy to be brought which proposes major changes in both school and higher education.
  • National Research Foundation (NRF) proposed to fund, coordinate and promote research in the country.
  • Rs. 400 crore provided for “World Class Institutions”, for FY 2019-20, more than three times the revised estimates for the previous year.
  • ‘Study in India’ proposed to bring foreign students to study in Indian higher educational institutions.
  • Draft legislation to set up Higher Education Commission of India (HECI), to be presented.
  • National Sports Education Board for development of sportspersons to be set up under Khelo India, to popularize sports at all levels.
  • Stand-Up India Scheme to be continued for the period of 2020-25. The Banks to provide financial assistance for demand based businesses.

Naari Tu Narayani/Women

  • Approach shift from women-centric-policy making to women-led initiatives and movements.
  • Women SHG interest subvention program proposed to be expanded to all districts.
  • One woman per SHG to be eligible for a loan up to Rs. 1 lakh under MUDRA Scheme.
  • About 30 lakh workers joined the Pradhan Mantri Shram Yogi Maandhan Scheme that provides Rs. 3,000 per month as pension on attaining the age of 60 to workers in unorganized and informal sectors.
  • Approximately 35 crore LED bulbs distributed under UJALA Yojana leading to cost saving of Rs. 18,341 crore annually.
  • Proposal to consider issuing Aadhaar Card for NRIs with Indian Passports on their arrival without waiting for 180 days.
  • 18 new Indian diplomatic Missions in Africa approved in March, 2018, out of which 5 already opened. Another 4 new Embassies intended in 2019-20.
  • Revamp of Indian Development Assistance Scheme (IDEAS) proposed.
  • 17 iconic Tourism Sites being developed into model world class tourist destinations.

Banking and Financial Sector

  • NPAs of commercial banks reduced by over Rs. 1 lakh crore over the last year. Record recovery of over Rs. 4 lakh crore effected over the last four years. Domestic credit growth increased to 13.8%.
  • Rs. 70,000 crore proposed to be provided to PSBs to boost credit.
  • Target of Rs. 1, 05,000 crore of disinvestment receipts set for the FY 2019-20.
  • New series of coins of One Rupee, Two Rupees, Five Rupees, Ten Rupees and Twenty Rupees, easily identifiable to the visually impaired to be made available for public use shortly.

Achievements during 2014-19

  • 1 trillion dollar added to Indian economy over last 5 years (compared to over 55 years taken to reach the first trillion dollar).
  • India is now the 6th largest economy in the world, compared to 11th largest five years ago.
  • Indian economy is globally the 3rd largest in Purchasing Power Parity (PPP) terms.
  • Average amount spent on food security per year almost doubled during 2014-19 compared to 2009-14.

10-point Vision for the decade

  • Building Team India with Jan Bhagidari: Minimum Government Maximum Governance.
  • Achieving green Mother Earth and Blue Skies through a pollution-free India.
  • Making Digital India reach every sector of the economy.
  • Launching Gaganyan, Chandrayan, other Space and Satellite programmes.
  • Building physical and social infrastructure.
  • Water, water management, clean rivers.
  • Blue Economy.
  • Self-sufficiency and export of food-grains, pulses, oilseeds, fruits and vegetables.
  • Achieving a healthy society via Ayushman Bharat, well-nourished women & children, safety of citizens.
  • Emphasis on MSMEs, Start-ups, defence manufacturing, automobiles, electronics, fabs and batteries, and medical devices under Make in India.

Roadmap for future

  • Simplification of procedures.
  • Incentivizing performance.
  • Red-tape reduction.
  • Making the best use of technology.
  • Accelerating mega programmes and services initiated and delivered so far.

Link:
http://pib.nic.in/newsite/PrintRelease.aspx?relid=191301
https://www.indiabudget.gov.in/bh.php

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