Budget highlights: FY21 fiscal deficit target at 3.5% of GDP

Finance Minister Nirmala Sitharaman presented the Union Budget 2020, the first of the new decade, to Parliament on Saturday. Here are the key highlights from her Budget Speech:-

Budget Speech: Highlights
>> 3 Budget themes: Aspirational India, Economic Development, Caring Society.
>> FY21 fiscal deficit target at 3.5% of GDP.

>> FY30 fiscal deficit revised to 3.8% from 3.3% of GDP.
>> FY21 net govt borrowing estimated at Rs 5.36 lakh crore.
>> Rs 4.99 lakh crore govt borrowing estimated in FY20.
>> Govt to yield more space to private sector.
>> A good part of govt borrowing will go into capex.
>> Govt to strive to ensure ease of living for every citizen.
>> This Budget is to boost income and purchasing power of Indians.
>> Fundamentals of economy are strong.

DIRECT TAX PROPOSALS
>> New simplified income-tax regime with low tax rates.
>> New tax rates optional for those not availing any exemption.
>> Zero income-tax for those earning up to Rs 5 lakh.
>> 10% income-tax for incomes up to Rs 5-7.5 lakh.
>> 15% income-tax for incomes from Rs 7.5-10 lakh.
>> 20% income-tax for incomes from Rs 10-12 lakh.
>> 25% income-tax for incomes from Rs 12.5-15 lakh.
>> 30% income-tax for incomes above Rs 15 lakh.
>> 100 exemptions allowed under I-T Act now.
>> Around 70 exemptions removed under the new regime.
>> Remaining I-T exemptions to be reviewed in the coming days.
>> Govt to abolish Dividend Distribution Tax (DDT).
>> Dividends to be taxed in the hands of recipients.
>> Revenue foregone due to DDT removal Rs 25,000 crore.
>> To allow deduction of dividend received by holding companies from subsidiary.
>> Corporate tax cut to 15% for power generation companies.
>> Revenue foregone due to DDT removal Rs 25,000 crore.
>> Tax payment on Esops from startups deferred by 5 years when they leave co.
>> 100% tax exemption for SWFs for infra investment.
>> Turnover limit for startups claiming tax deduction raised to Rs 100 crore.
>> Tax holiday for qualified startups raised to 10 years.

MACROS
>> Centre’s debt as a percentage of GDP has come down to 48.7% as of May, 2019.
>> 271 million people raised out of poverty between 2006 and 2016.
>> Average household now saves 4% of monthly spends due to GST.
>> New simplified GST return system to come into force from April 2020.
>> Effective tax incidence on almost every commodity has come down substantially.
>> GST has resulted in logistical maturity.
>> GST benefit of Rs 1 lakh crore extended to consumers.
>> 6 million new taxpayers added in last four years due to GST.
>> Turnaround time of trucks has reduced 20% due to GST.

FINANCIAL SECTOR
>> Select govt securities to be fully opened for NRIs.
>> Limit for FPIs in corp bonds raised from 9% to 15%.
>> To float new debt ETF for govt bonds.
>> Gifty City to set up international bullion exchange.
>> Credit guarantee scheme for NBFCs extended.
>> Rs 3,50,000 crore infused in PSU banks in past few years.
>> Governance reforms in PSU banks to make them more efficient.
>> PSU banks to be encouraged to raise capital from markets.
>> Bank deposit insurance cover increased from Rs 1 lakh to Rs 5 lakh.
>> To take measure to professionalise PSU banks.
>> To amend bank regulation to strengthen co-op banks.
>> Proposes to sell govt’s balance holding in IDBI Bank.

INFRASTRUCTURE
>> Proposed to release national logistics policy soon.
>> NHAI to monetise 12 highway bundles.
>> 2,500 km highway development proposed.
>> 9,000 km of economic corridors targetted.
>> 2,000 km of coastal roads targetted.
>> 2,000 km highways targeted.
>> Delhi-Mumbai Expressway to be completed by 2023.
>> High-speed train between Mumbai, Ahmedabad to be actively pursued.
>> New Tejas-type trains proposed.
>> Mulls setting up large solar power capacity alongside rail track.
>> Rs 18,600 crore Bangalore local train project proposed with 20% central equity.
>> Govt plans to set up 100 new airports in the country to boost tourism.
>> Will consider corporatizing one major port.
>> Rs 1. 7 lakh allocated towards transport infrastructure.

MSMEs
>> Factors Regulation Act to be amended to facilitate invoice financing.
>> Scheme for subordinate debt for MSMEs from banks as quasi-equity.
>> 5 lakh MSMEs benefitted for debt restructuring.
>> Debt restructuring window for MSMEs to be extended by 1 more year.
>> Handholding support for tach upgradation for mid-sized firms for 1 year.

RURAL SECTOR
>> Allocation towards farm sector & rural Rs 2.88 lakh crore.
>> Allocation to rural development and panchayati raj set at Rs 1.23 lakh crore.
>> To change incentive mechanism for fertiliser use.
>> Govt to provide viability gap funding for setting up agri storage.
>> Nabard to map, geo-tag warehouses, cold storage.
>> Unveils Kisan Udaan scheme to.
>> Zero-Budget farming is govt’s focus area.
>> To raise fish production by 200 lakh tonnes.
>> Aims to double milk production capacity by 2025
>> To support states to implement one fruit-one district plan.
>> Nabard refinance scheme to be expanded further.
>> Agricultural credit availability raised to Rs 15 lakh crore.
>> Financing on negotiable warehousing receipts crosses Rs 6,000 crore.
>> Budget proposes to build seamless national cold storage chain.
>> Comprehensive measures proposed for 100 water-stressed districts.
>> To help 20 lakh farmers set up standalone pumps.
>> To help 15 lakh farmers solarise water pumps.
>> Budget proposes 16 action points to lift farmer’s income.
>> Govt to double farmer’s income by 2022.

CORPORATE LAW
>> Taxpayers’ charter to be enshrined in the statutes.
>> Tax harassment cannot and will not be tolerated.
>> Companies Act to be amended, other laws to be corrected to remove criminal liability.

SOCIAL WELFARE
>> Girls enrollment at all levels of education now higher than boys.
>> Rs 35,600 crore allocation towards nutrition-related programmes.
>> Rs 9,500 crore provided towards schemes for elderly & senior citizens.
>> Rs 28,600 crore for women-related schemes.
>> Rs 85,000 crore for schemes related to SCs & OBCs.
>> Rs 53,700 crore allocated to schemes targeted at STs.

TECHNOLOGY
>> Private sector to be encouraged to set up data centre parks.
>> 1 lakh gram panchayats to be linked through optical fibre.
>> Rs 6,000 crore allocated to BharatNet.
>> Rs 8,000 crore for National Quantum Tech Plan.

ASPIRING INDIA
>> Entrepreneurship has always been the strength of India.
>> Govt Proposes 5 new Smart Cities.
>> Scheme to encourage for mobile, semiconductor manufacturing.
>> Scheme to encourage manufacturing of medical devices soon.
>> Investment clearance cell proposed for entrepreneurs.
>> Rs 27,300 crore allocated to industry and commerce.

EDUCATION & SKILL DEVELOPMENT
>> ECB and FDI norms to be eased for the education sector.
>> Urban local bodies to provide internship opportunities to young engineers for 1 year.
>> Full-fledged online degree programme by top 100 institutions in the country.
>> National police university, national forensic science university proposed.
>> Viability gap funding in PPP mode to medical colleges willing to attach with district hospitals.
>> Govt plans to promote Study in India.
>> To make India a preferred destination for higher education.
>> Rs 99,300 crore allocated to the education sector.