Highlights Of Budget 2020-21
Finance

Highlights Of Budget 2020-21

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Budget 2020-21 was presented by Union Finance Minister of India Smt. Nirmala Sitharaman on Saturday 1st Feb 2020. It was the longest Budget (45 Pages) speech by any finance minister, going beyond 2 hours 30 minutes. Last year her budget speech was 2 hours 17 minute long in July 2019. She said that this Budget will boost the income and purchasing power of all.

This time there were three prominent themes of the budget and it were:

  1. Aspirational India – To improve better standards of living in health & education and provide jobs for all.
  2. Economic Development for All – Sabka Saath, Sabka Vikas, Sabka Vishwas – सबका साथ, सबका विकास, सबका विश्वास 
  3. Caring Society – Both human and compassionate.

Three components of Aspirational India:

  1. Agriculture, Irrigation, and Rural Development
  2. Wellness, Water, and Sanitation
  3. Education and Skills

Here are all the key highlights from Nirmala Sitharaman’s Budget 2020-21 speeches:

  • Insurance cover for bank depositors have been raised from ₹ 1 Lakh to ₹ 5 Lakh.
  • Proposed new simplified Income Tax slabs and lower rates. These income tax rates are optional and are available to those who are willing to forego some exemptions and some deductions.
  1.  10% tax for income between ₹ 5 Lakh – ₹ 7.5 Lakh
  2.  15% tax for income between ₹ 7.5 Lakh to ₹ 10 Lakh
  3. 20% tax for income between ₹ 10 Lakh to ₹ 12.5 Lakh
  4. 25% tax for income between ₹ 12.5 Lakh to ₹ 15 Lakh
  5. 30% tax for income above ₹ 15 Lakh.
  6. No income tax for those with taxable income below ₹ 5 Lakh
  • To simplify the tax system and lower tax rates, around 70 of more than 100 income tax deductions and exemptions have been removed. Remaining exemptions and deductions to be reviewed and rationalized in the coming years.
  • Companies will no longer be required to pay Dividend Distribution Tax (DDT).
  • Aadhar based verification for GST compliance to be introduced.
  • Aadhar based quick issuance of PAN announced.
  • Government plans to amend the Companies Act to decriminalize civil offenses.
  • Government will sell part of its stake in Life Insurance Corporation of India (LIC) via public offering.
  • Allocation of ₹ 1.60 Lakh crore for Agriculture, Irrigation & allied activities.
  • Allocation of ₹ 1.23 Lakh crore for Rural Development & Panchayati Raj.
  • NABARD Re-finance Scheme to be further expanded.
  • Doubling farmers’ income by 2022.
  • Agri-credit availability set at ₹ 15 Lakh Crore for 2020-21.
  • Village storage scheme proposed to be run by women Self Help Groups (SHGs).
  • Comprehensive measures for 100 water-stressed districts.
  • Provide 20 Lakh farmers to set up standalone solar pumps. Help another 15 Lakh farmers to solarise their power grid.
  • Indian Railways to have refrigerated coaches’ capability in ‘Kisan Trains’ to carry perishables and milk.
  • Krishi UDAAN on international and national routes
  • ₹ 1 Lakh crore fisheries’ exports to be achieved by 2024-25
  • 200 Lakh tonnes fish production targeted by 2022-23
  • One-Product One-District for better marketing and export in the Horticulture sector
  • Doubling of milk processing capacity from 53.5 million MT to 108 million MT by 2025
  • Artificial insemination to be increased to 70% from the present 30%
  • Foot and Mouth Disease, Brucellosis in cattle and Peste Des Petits ruminants (PPR) in sheep and goat to be eliminated by 2025
  • Deen Dayal Antyodaya Yojana – 0.5 crore households mobilized with 58 Lakh SHGs for poverty alleviation.
  • ₹ 69,000 crore allocated for overall Healthcare sector. ₹ 6400 crores (out of Rs. 69,000 crores) for PM Jan Arogya Yojana (PMJAY)
  • Jan Aushadhi Kendra Scheme to offer 2000 medicines and 300 surgical in all districts by 2024
  • TB Harega Desh Jeetega campaign launched – commitment to end Tuberculosis by 2025
  • ₹ 3.60 Lakh crore approved for Jal Jeevan Mission; ₹ 11,500 crore for the year 2020-21
  • ₹ 12,300 crore allocation for Swachh Bharat Mission in 2020-21
  • New Education Policy to be announced soon
  • Government to provide ₹ 99,300 crore for the educational sector in FY21 and ₹ 3000 crores for skill development in 2020-21
  • National Police University and National Forensic Science University proposed for policing science, forensic science, and cyber-forensics
  • Degree level full-fledged online education program by Top-100 institutions in the National Institutional Ranking Framework
  • 150 higher educational institutions to start apprenticeship embedded degree/diploma courses by March 2021
  • ₹ 27,300 crores allocated for 2020-21 for development and promotion of Industry and Commerce
  • Five new smart cities proposed to be developed
  • Scheme to encourage manufacture of mobile phones, electronic equipment, and semi-conductor packaging proposed.
  • New scheme ‘NIRVIK’ to be launched to achieve higher export credit disbursement
  • ₹ 100 Lakh crore to be invested on infrastructure over the next 5 years
  • Infrastructure agencies of the government to involve youth-power in start-ups
  • ₹ 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.
  • Delhi-Mumbai Expressway and two other packages to be completed by 2023
  • Chennai-Bengaluru Expressway to be started
  • Proposed to monetise at least 12 lots of highway bundles of over 6000 KM before 2024
  • Five measures for Indian Railways:
  • 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 ₹ 18,600 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
  • National Textile Mission to be launched with a proposed ₹ 1,480 crore allocation
  •  Proposes ₹ 4,400 crores to tackle Delhi’s air pollution problem
  • 100 more airports to be developed by 2024 to support Udaan scheme
  • “Smart” electric metering to be promoted
  • ₹ 22,000 crore proposed for power and renewable energy sector in 2020-21
  • Expansion of national gas grid from the present 16200 km to 27000 km proposed.
  • Fiber to the Home (FTTH) connections through Bharatnet to link 100,000 gram panchayats this year
  • ₹ 6000 crores proposed for Bharatnet programme in 2020-21
  • Mapping of India’s genetic landscape – Two new national level Science Schemes to be initiated to create a comprehensive database
  • Early life funding proposed, including a seed fund to support ideation and development of early-stage Start-ups
  • ₹ 8000 crore proposed over five years for National Mission on Quantum Technologies and Applications
  • Allocation of ₹ 35,600 crores for nutrition-related programs proposed for the FY2020-21
  • ₹ 28,600 crores proposed for women specific programs
  • ₹ 85,000 crore proposed for 2020-21 for welfare of Scheduled Castes and Other Backward Classes
  • ₹ 53,700 crore provided to further development and welfare of Scheduled Tribes
  • Enhanced allocation of ₹ 9,500 crore provided for 2020-21 for senior citizens and Divyang (Handicapped)
  • Allocation of ₹ 2500 crore for 2020-21 for tourism promotion
  • ₹ 3150 crores proposed for Ministry of Culture for 2020-21
  • Five archaeological sites (Rakhigarhi in Haryana, Hastinapur in U.P., Shivsagar in Assam, Dholavira in Gujarat, and Adichanallur in Tamil Nadu) to be developed as iconic sites with on-site Museums
  • Allocation for this purpose to be ₹ 4400 crores for 2020-21 for Environment & Climate change
  • States that are formulating and implementing plans for ensuring cleaner air in cities above one million to be encouraged
  • PM launched Coalition for Disaster Resilient Infrastructure (CDRI) with Secretariat in Delhi. Second such international initiative after International Solar Alliance.
  • Major reforms in recruitment to Non-Gazetted posts in Government and Public sector banks:
  1. An independent, professional and specialist National Recruitment Agency (NRA) for conducting a computer-based online Common Eligibility Test for recruitment
  2. A test-centre in every district, particularly in the Aspirational Districts
  3. A robust mechanism to be evolved for appointment including direct recruitment to various Tribunals and specialised bodies to attract best talents and professional experts
  • A sum of ₹ 100 crores allocated to begin the preparations for G20 presidency to be hosted in India in the year 2022
  • Development of Union Territories of J&K and Ladakh:
  1. An amount of ₹ 30,757 crore provided for the financial year 2020-21.
  2. The Union Territory of Laddakh has been provided with ₹ 5,958.
  • Reforms accomplished in PSBs : 10 banks consolidated into 4 and ₹ 3,50,000 crore capital infused
  • Cooperative Banks to be strengthen by amending Banking Regulation Act for:
  1. Increasing professionalism
  2. Enabling access to capital
  3. Improving governance and oversight for sound banking through the RBI
  • Government to sell its balance holding in IDBI Bank to private, retail and institutional investors through the stock exchange
  • Auto-enrolment in Universal Pension coverage
  • ₹ 103 Lakh crore National Infrastructure Pipeline projects earlier announced
  • ₹ 22,000 crore to cater to the equity support to Infrastructure Finance Companies such as IIFCL and a subsidiary of NIIF
  • Corporate Tax rate of 15% extended to new electricity generation companies
  • Dividend Distribution Tax (DDT): DDT removed making India a more attractive investment destination
  • Start-ups with turnover up to ₹ 100 crore to enjoy 100% deduction for 3 consecutive assessment years out of 10 years
  • Additional deduction up to ₹ 1.5 lakhs for interest paid on loans taken for an affordable house extended till 31st March, 2021.
  • Plan to have a large solar power capacity for Indian Railways.
  • Aim to achieve electrification of 27,000 km of lines.
  • The government also proposes a Bengaluru suburban rail project at a cost of ₹18,600 crore.

Achievements of Indian Economy:

  1. India now the fifth largest economy of the world
  2. 271 million people raised out of poverty during 2006-16.
  3. Total of 60 lakh new taxpayers and 105 crore e-way bills generated under GST
  4. India’s Foreign Direct Investment elevated to US$ 284 billion during 2014-19 from US$ 190 billion during 2009-14.
  5. Central government debt reduced to 48.7 percent of GDP in 2019 from 52.2 percent
  6. The country has moved on from over 4 percent growth in the 1950s to 7.4 percent to 2014-19 period

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