On July 5th, 2019, the Modi government presented the Union Budget to the nation, and this presentation has been the major conversation starter for Indians all around the country, even the world. The main agenda of the Union Budget is to improve Indian infrastructure, give foreign investments a large boost and overall improve the state of the Indian economy. The Union Budget is one of the most significant decisions of the ruling government as it dictates the state of the economics of the country and sets a precedent for how the year is going to look like for all Indian citizens. Nirmala Sitharaman, the Finance Minister of the country was the bearer of this news. If you didn’t get to catch the entire announcement, here are the highlights you must know about the Union Budget 2019 –
On Direct Taxation
Direct taxation by definition refers to the tax paid by an individual or organization directly to an entity. Examples of direct taxation can be income tax, property tax and so on. The union budget 2019 had some highlights which have something to do with direct taxation and those are –
- Under section 80EE, which states a deduction on interest on housing loans, there will be an increase of 1.5 lakhs for the home loans which are self-occupied house property as of 31/3/2020. If the cost of the house is more than 45 lakhs, they will be eligible for this.
- The Aadhar card and the PAN card can be used interchangeably by taxpayers, making the process a lot easier.
- People can now file for income tax returns by using their Aadhar number
- To encourage online transactions, a TDS of 2% would be charged on withdrawals which exceed the 1 crore per annum mark from any bank account
- There will be an increase in tax (from 15% to 18%) for people who fall under the income bracket of 2 crores to 5 crores per annum.
- There will be an increase in tax (from 15% to 22%) for people who fall under the income bracket of 5 crores to 10 crores per annum.
- There will be a proposal to offer relief in levy of tax for securities transaction
- A corporate tax of 25% will be applied to companies who get an annual turnover of 400 crores and above.
- The 35AD will now be also applicable to Li-On batteries, Semi-conductors, Laptops, Fabrications, and Photo volic.
Some new policies have been announced by the Finance Minister of India which will impact the infrastructure industry of the country. The highlights are –
- There will be a massive increase in the amount of investment in the infrastructure industry. By this, we mean that the national highways and aviation sectors will hopefully see a major boom in the coming year.
- The Bharat Mala will focus extensively on developing state highways
- All the national highways are about to go through a major reconstruction to better the infrastructure
Education is one of the key factors which can drastically affect the wellbeing of the country, so it is important to invest money in the field of education.
- The National Education Policy will be responsible for making some mecessary and important changes in the structure of secondary education as well as higher education.
- Under the Swayam Initiative, the idea of Digital Education will be highly promoted
- The National Research Foundation will be paying great attention to an increase in research and development activities, and they will also fund and promote better researches. They are to overlook the culmination of researches and putting an end to false and duplicate researches.
- This year, students can look forward to a new and improved Indian education system.
On Startup Development
With the increasing number of innovative startups popping up every single day in the country, the government made it a point to cater to these needs as well.
- The Union Budget mentioned that the government will be starting some programs for startups on DD News.
The Union Budget 2019 paid extra attention to all the household needs of the citizens on India, especially who need it the most, like people living in the rural parts of India.
- All parts of rural India are to receive housing, clean drinking water, electricity, and cooking facilities so that they can lead a safe and dignified life.
- The government will try to encourage the usage of rainwater harvesting, recharging of groundwater and household wastewater management.
- Under the Har Ghar Jal initiative, all people living in rural India are projected to have water by 2024
- About 7 crore LPG gas connections to be given to rural households of the country.
Special attention was paid to pension plans and this specific need was brought up –
- About 3 crore retail traders (shopkeepers) will be given pension. These shopkeepers would be given the pension benefit if their annual turnover is up to 1.5 crores.
MSME or Micro, Small and Medium Enterprises were given a special spot in the Union Budget 2019. These were the points that stood out –
- All GST registered MSMEs will have about 350 crores allocated for a 2% interest subvention specifically, on incremental loans or even fresh loans.
- The government will work extensively on creating a platform for easy payments for MSMEs.
- This year will see a lot of major reformations for the MSMEs.
- MSMEs will be able to receive loans in just 59 minutes. The amount for a quick loan is up to 1 crore.
On Women Empowerment
In this day and age, Women empowerment and gender equality are very important and the government must take steps to further these efforts so that all citizens of the country can be their true and authentic selves and also fell safe and empowered.
- A committee will be formed with public and private stakeholders to push the cause of gender equality
- All women in Self Help Groups having Jan Dhan Account will have Rs. 5000 overdraft allowed.
- Women entrepreneurs can get a loan up to 1 lakh under the Mudra Scheme
On NRI Budget
- A proposal is underway for NRIs to get their Aadhar card on arrival. NRIs with valid Indian passports are eligible for this.
- NRIs to receive their Aadhar cards post their arrival in India
- More effort will be made to increase the NRI investment in the Indian capital market.
- Efforts will be made to merge the FPI route and the NRI portfolio scheme route.
On Railway Budget
The Indian Railways have been running for a long time, but there is always scope for improvement.
- 50 lakh crores to be invested into the Indian railways between the years 2018 and 2030
- The Public-Private Partnership (PPP) will be integrated into the Indian Railways so that passenger satisfaction becomes of utmost importance
- The Railway Station Modernization is to be launched soon this year
- More investments to be made by the Indian Railways in suburban and urban Indian regions
- India set to have 657 km of functioning Metro Rail soon
On the Banking and the Financial sector
This sector is always most affected by the National Budget. These are the highlights for this year –
- A lot of new reforms and policies are to be made so that the Public Sector banks have stronger governance and better functioning
- Commercial banks have reduced their NPAs by about one lakh in just the last year
- Over 4 lakh crores of record recovery to be made with IBS
- 70 thousand crores of capital boost are to be made for credit improvement after the consolidation of public sector banks.
- The number of public sector banks has been reduced by 8
- NBFCs are to get funding from the government (a total of 1 lakh crore)
- The RBI Regulatory Authorities will be placed over the NBFC Regulatory Authorities
- Regulatory Authority is set to move from NHB to the RBI on this year
On Electrical Vehicles
- A reduction in the GST rate will be seen on all electrical vehicles. (from 12% to 5%)
- A reduction of tax (2.5 lakh) on the loan interest on the purchase of electrical vehicles
- Electric vehicles will be made more easily affordable
- 1.5 lakh IT deduction on the interest on the loans taken to purchase of electric vehicles
- Under the 35AD tax deduction, now solar storage batteries and chargers will also be included
- A mass scaling of LED bulbs is set to take place.
- About 35 crores of LED bulbs will be distributed
- Robots and types of machinery would be used for scavenging.
- A lot of investment to be made in the field of VR, AI, Robotics and other technological movements.
Among all these important highlights, the government will also focus on reducing the costs of digital so that more and more people can make the switch. There are also plans to launch a card which will be similar to an ATM card but this can be used pan India.