10 key takeaways from Budget 2019
Amid the market expectations, and merely four months after the interim budget, Finance Minister Nirmala Sitharaman presented her maiden full budget on July 5, 2019. This was the first Union Budget of the Narendra Modi led government, which is in its second term. Although the budget had no major announcements, with some experts even calling it a supplementary budget, here are the key takeaways from the FM’s budget speech delivered in the Parliament:
Boost to Micro, Small and Medium Enterprises (MSMEs) – The FM, in her budget speech, has proposed a loan of Rs 1 crore in order to boost the sector that is the second largest employer after agriculture. Additionally, there will be an allocation of Rs 350 crore at 2 per cent interest subvention for all GST registered MSMEs for fresh or incremental loans.
Zero budget farming to boost farmers’ income – With the aim of boosting the agricultural sector in the country, Nirmala Sitharaman said that the government will reassess the implementation of zero budget farming that has the potential of nearly doubling farmers’ income. She added that 10 thousand new farmer producer organisations will be set up for ensuring market reach for the farmers.
Education sector – The Union Budget 2019 emphasised on improving higher education and research infrastructure in the country. The FM spoke about the implementation of the new National Education Policy and also setting up a Higher Education Commission. The government has proposed setting up of the National Research Foundation, which will be responsible for assimilating funds and building the research infrastructure for colleges and universities in the country.
Petroleum products to cost more – The Finance Minister has announced a hike in the special additional excise duty and road and infrastructure cess, each by Re 1 per litre on petrol and diesel. This will, in turn, make petrol and diesel dearer by Rs 2/litre.
Housing for all – Nirmala Sitharaman, in her budget speech, highlighted that the Pradhan Mantri Awas Yojana (PMAY) aims to achieve housing for all by 2022. Under the scheme, the government will construct 1.95 crore houses from financial year (FY) 2020-2022.
Checking black market economy – The government has announced that 2 per cent TDS will be levied on cash withdrawals of over Rs 1 crore. The move is clearly aimed at discouraging big cash transactions and encouraging digital payments in the country. This will also keep a check on the black money market in the country.
Banking & financial sector – The finance minister said, in her budget speech, that non-performing assets (NPAs) have reduced by Rs 1 lakh crore over the last year. The government has announced a provision of Rs 70,000 crore capital for public sector banks in order to boost credit. Ms Sitharaman also emphasised on boosting online personal loans and doorstep banking.
GST on electric vehicles reduced – Continuing with its focus on promoting electric mobility in the country, the government has slashed GST rate for electric vehicles from the current 12 per cent to 5 per cent, which will considerably bring down the purchasing prices of EVs in India. Besides, the government will provide a discount of Rs 1.5 lakh on the interest on electric vehicle loans.
Taxing the rich – While Budget 2019 did not touch upon the prevailing income tax slabs, the government has hiked surcharge for the super-rich category. The budget did, however, specify that the effective tax rates for individuals having taxable income from Rs 2 crore to Rs 5 crore, and Rs 5 crore and above is proposed to be increased by 3 per cent and 7 per cent, respectively. Besides, a zero tax benefit has been extended to persons with income under Rs 5 lakh, allowing self-employed people to pay lower tax and boost their business. However, it is necessary for these people to file their income tax return (ITR).
Har ghar jal by 2024 – The finance minister spoke on ensuring that every rural household gets access to safe drinking water by the year 2024. The newly constituted Jal Shakti Mantralaya will closely work with the states to ensure ‘Har ghar jal’ and to look into the water security issue of the country.
Besides the above, the finance minister also spoke about opening of FDI in aviation, media, insurance, and single brand retail sector. While addressing a press conference post the budget presentation, the Union Finance Minister opined that Budget 2019 carries a 10-year vision and the measures announced are aimed at achieving this mission.
