The Key Highlights of Union Budget 2020-21 are as follows:
- Rs. 2.83 lakh crore to be allocated for the following Points:
- Rs. 1.60 lakh crore for Agriculture, Irrigation & allied activities.
- Rs. 1.23 lakh crore for Rural Development & Panchayati Raj.
- Rs. 99,300 crore for the education sector and Rs. 3000 crore for skill development in 2020- 21.
Economic Development: Industry, Commerce and Investment
- Rs. 27,300 crore allocated for 2020-21 for development and promotion of Industry and Commerce.
- Investment Clearance Cell proposed to be set up to provide “end to end” facilitation and support.
- Five new smart cities proposed to be developed.
- Scheme to encourage the manufacture of mobile phones, electronic equipment and semiconductor packaging proposed.
- National Technical Textiles Mission to be set up: o with four-year implementation period from 2020-21 to 2023-24.
- New scheme NIRVIK to be launched to achieve higher export credit disbursement, which provides for higher insurance coverage, Reduction in premium for small exporters & Simplified procedure for claim settlements.
- Turnover of Government e-Marketplace (GeM) proposed to be taken to Rs 3 lakh crore.
- All Ministries to issue quality standard orders as per PM‟s vision of “Zero Defect-Zero Effect” manufacturing.
- Rs.100 lakh crore to be invested on infrastructure over the next 5 years.
- National Infrastructure Pipeline of Rs. 103 lakh crore worth projects; launched on 31st December 2019. More than 6500 projects across sectors, to be classified as per their size and stage of development.
- A National Logistics Policy to be released soon.
- Rs.1.7 lakh crore proposed for transport infrastructure in 2020-21.
- Accelerated development of highways to be undertaken, including 2500 Km access control highways, 9000 Km of economic corridors, 2000 Km of coastal and land port roads, 2000 Km of strategic highways.
- Five measures:
- Large solar power capacity to be set up alongside rail tracks, on land owned by railways.
- Four station re-development projects and operation of 150 passenger trains through PPP.
- More Tejas type trains to connect iconic tourist destinations.
- High speed train between Mumbai and Ahmedabad to be actively pursued.
- 148 km long Bengaluru Suburban transport project at a cost of Rs 18600 crore, to have fares on metro model. Central Government to provide 20% of equity and facilitate external assistance up to 60% of the project cost.
- 100 more airports to be developed by 2024 to support Udaan scheme.
- Air fleet number expected to go up from present 600 to 1200 during this time.
- Government to sell a part of its holding in LIC by way of Initial Public Offer (IPO).
- Rs.2.1 Trillion disinvestment target.
- Fiscal deficit of 3.8% estimated in RE 2019-20 and 3.5% for BE 2020-21.
For the FY 2019-20
1. Revised Estimates of Expenditure at Rs.26.99 lakh crore
2. Revised Estimates of Receipts: estimated at Rs.19.32 lakh crore.
For year 2020-21
1. Nominal growth of GDP estimated at 10%.
2. Receipts: estimated at Rs.22.46 lakh cr
3. Expenditure: at Rs.30.42 lakh cr.
- New personal Income tax regime proposed.
- Around 70 of the existing exemptions and deductions (more than 100) to be removed in the new simplified regime. Remaining exemptions and deductions to be reviewed and rationalised in coming years.
- New tax regime to be optional – an individual may continue to pay tax as per the old regime and avail deductions and exemptions.
- Dividend Distribution Tax (DDT) removed.
- MSMEs: Turnover threshold for audit increased to Rs. 5 crores from Rs. 1 crore for businesses carrying out less than 5% business transactions in cash.
- Tax concession for foreign investments
- 100% tax exemption to the interest, dividend, and capital gains income on investment made in infrastructure and priority sectors before 31st March 2024 with a minimum lock-in period of 3 years by the Sovereign Wealth Fund of foreign governments.
- Affordable housing: o Additional deduction up to Rs. 1.5 lakhs for interest paid on loans taken for an affordable house extended till 31st March 2021.
- Cash reward system envisaged to incentivise customers to seek invoice.
- Simplified return with features like SMS based filing for nil return and improved input tax credit flow to be implemented from 1st April, 2020 as a pilot run.
- Dynamic QR-code capturing GST parameters proposed for consumer invoices.
- Electronic invoice to capture critical information in a centralized system to be implemented in a phased manner.
- Aadhaar based verification of taxpayers being introduced to weed out dummy or non-existent units.
- GST rate structure being deliberated to address inverted duty structure.
- Customs Duties:
- Customs duty raised on footwear to 35% from 25% and on furniture goods to 25% from 20%.
- Basic customs duty on imports of news print and light-weight coated paper reduced from 10% to 5%.
- Customs duty rates revised on electric vehicles and parts of mobiles.
- 5% health cess to be imposed on the imports of medical devices, except those exempt from BCD.
- Lower customs duty on certain inputs and raw materials like fuse, chemicals, and plastics.
- Higher customs duty on certain goods like auto-parts, chemicals, etc. which are also being made domestically.
- Excise duty proposed to be raised on Cigarettes and other tobacco products, no change made in the duty rates of bidis.
- Anti-dumping duty on PTA abolished to benefit the textile sector.
Source: Government of India Budget official website.