New Delhi: With the prime focus on measures to improve the economy of the country, Union Finance Minister Nirmala Sitharaman on Saturday presented Union Budget for 2020-21. Giving more attention to capacity building and empowerment of marginalised sections of society including farmers, the Union Budget was presented to ensure an all-round development for all.
While presenting the budget, Sitharaman stated that the people of the country should be gainfully employed. “Our businesses should be healthy. For all minorities, women and people from SCs and STs, this Budget aims to fulfil their aspirations,” she said. Here are the key highlights of the development-oriented budget.
Income Tax Slabs
Giving relief to the taxpayers, Sitharaman stated that people who are earning up to Rs 5 lakh in a year will pay no tax. She also stated that people will have to pay only tax of 10 per cent for the income between Rs 5 and Rs 7.5 lakh. However, the tax rate is 15 per cent for income between Rs 7.5 and Rs 10 lakh.
The tax rate has been reduced to 20 per cent from 30 per cent for the income between Rs 10 and Rs 12.5 lakh. But the tax rate will remain unchanged for the income above Rs 15 lakh.
She stated that a person, who is earning Rs 15 lakh per annum and not availing any deductions, will now pay Rs 1.95 lakh tax in place of Rs 2.73 lakh. According to her, the new personal income tax regime entails an estimated revenue foregone amounting to Rs 40,000 crore per year.
Goods and Services Tax
Sitharaman stated that the new tax regime has resulted in efficiency gains in the transport and logistics sector. She said that the consumers have got an annual benefit of Rs 1 lakh crore by the GST.
Credit for farmers
Terming the budget as farmer’s friendly, Sitharaman stated that the Central government will disburse Rs 15 lakh crore among farmers as credit for the year 2020-21. For their benefit, the refinancing scheme of National Bank for Agriculture and Rural Development (NABARD) will be further expanded.
A 16-point plan for the farm sector
Announcing further measure to boost the morale of farmers, Sitharaman released a 16-point plan for farm sector and said these points include encouraging states to take up model agricultural laws, comprehensive measures for 100 water-stressed districts, PM Kusum Scheme, which removes dependence on kerosene and encourages the use of solar power, balanced use of fertilisers, an important step because currently the use of chemical fertilisers is incentivised.
As part of the plan, a village storage scheme has been proposed which will be managed by SHEs and it will help farmers store more and reduce logistics costs.
She also mentioned that the Krishi UDAAN scheme will be launched by the Aviation Ministry. Moreover, the financing of negotiable warehousing receipts will be integrating other e-services.
Part of another measure, Sitharaman said the Central government aims to eliminate the foot and mouth disease in sheep and goat by 2025.
She also stated the production of milk will be doubled from 53.5 million metric tonnes to 103 metric million tonnes by 2025. The Central government will engage youths in the fishery sector. As per the announcement, Rs 2.83 lakh crore outlay has been given for agriculture and allied sector
Deposit insurance cover
As per the announcement, there is an increase in the insurance coverage of their bank deposits from Rs 1 lakh to Rs 5 lakh. Deposit Insurance and Credit Guarantee Corporation has also been permitted to increase deposit insurance coverage to Rs 5 lakh per depositor from Rs 1 lakh.
Giving a major boost to the tourism sector, Sitharaman said that the Central government has allocated Rs 2,500 crore for 2020-21. Besides, Rs 3,150 crore has been proposed for the Ministry of Culture. Moreover, an Indian Institute of Heritage and Conservation to be established in this year. She said that 8 New Museums have been proposed to be set up and moreover, 5 Iconic sites will see infrastructural development.
A major development in the health sector
Giving more attention to the health Sector, Sitharaman stated that Rs 69,000 crore has been earmarked for the health care in Union Budget 2020-21. She said a viability gap funding window has also been proposed for setting up hospitals under Prime Minister Jan Arogya Yojana in the PPP model. Making health schemes reaching all areas, she said that the Jan Aushadhi Kendra Scheme will be expanded to all districts by 2024.
PM Modi calls Union Budget ’employment-oriented’
Prime Minister Narendra Modi said the Union Budget 2020 has a number of measures to push employment. He also congratulated Finance Minister Nirmala Sitharaman for presenting the budget that has vision as well as action.
“We have made several efforts in this budget to promote employment generation in the field of technology. A number of policy initiatives have been taken for areas such as new smart cities, electronic manufacturing, data centre parks, biotechnology and quantum technology,” he added.
Chidambaram slams Union Budget 2020
Senior Congress leader P Chidamabaram said the budget has nothing new for job creation in the country. He also went on to say that the people of the country not deserve such a budget but will have to live with it until the Central government is forced to revisit it as it happened in 2019.
“The Central government is in complete denial that economy faces a grave macro-economic challenge, the growth rate has declined in six successive quarters,” he said.
He further stated that the economy of the country is demand-constrained and investment-starved, but the Finance Minister has not acknowledged these two challenges.