To be a $5 trillion economy, India needs to invest heavily on Infra & Digital Economy
NewDelhi:The Union Budget 2019-20 stresses upon the need for heavy investment in infrastructure, digital economy and job creation in small and medium firms to fulfil the aspiration of making India a 5-trillion dollar economy.
While presenting her first Budget in Parliament on Friday, Finance and Corporate Affairs Minister Nirmala Sitharaman pointed out that the Indian economy has added one trillion dollar in the last five years due to the various initiatives and reforms undertaken by the government and is poised to grow to be a 3-trillion dollar economy in the current year.
Underlining the importance of "Make in India" for fulfilling this goal, the minister has proposed a number of initiatives as part of a framework for kick-starting the virtuous cycle of domestic and foreign investments.
Talking about the importance of programmes like Pradhan Mantri Gram Sadak Yojana, Industrial Corridors, Dedicated Freight Corridors, Bhartamala, Sagarmala, Jal Marg Vikas and UDAN for enhancing physical connectivity through various modes, the Finance Minister said these initiatives will improve logistics, reduce the cost of transportation and increase the competitiveness of domestically produced goods.
For civil aviation sector, the Minister said that the Government will implement the essential elements of a regulatory roadmap for making India a hub for aircraft financing and leasing activities. This is critical to the development of a self-reliant aviation industry, creating aspirational jobs in aviation finance, besides leveraging the business opportunities available in India's financial Special Economic Zones (SEZs), - International Financial Services Centre (IFSC).
She also said that the Government will adopt suitable policy interventions to create a congenial atmosphere for the development of Maintenance, Repair and Overhaul (MRO) industry in the country.
For the Railways, the Budget has proposed using Public-Private Partnership to unleash faster development and completion of tracks, rolling stock manufacturing and delivery of passenger freight services.
The Finance Minister informed that 657 kms of Metro Rail network has become operational across the country. She also said that India's first indigenously developed inter-operable transport card based on National Common Mobility Card (NCMC) standards, that was launched in March this year will make travel across various modes convenient for people.
Talking about phase-II FAME Scheme that encourages faster adoption of electric vehicles, the Minister said that only advanced battery and registered e-vehicles will be incentivized under the Scheme with greater emphasis on providing affordable and environment friendly public transportation options for the common man.
For the highways, Ms Sitharaman has said that the Government will carry out a comprehensive restructuring of National Highway Programme to ensure that the National Highway Grid of desirable length and capacity is created using financeable model. After completing the Phase 1 of Bharatmala, states will be helped to develop State road networks in the second phase.
Talking about the Government's vision for using rivers for cargo transportation, the Finance Minister said that the movement of cargo volume on Ganga is estimated to increase by nearly four times in the next four years.
This will make movement of freight, passenger cheaper and reduce our import bill. In this regard she mentioned the Jal Marg Vikas Project for enhancing the navigational capacity of Ganga, and said that two multi-modal terminals at Sahibganj and Haldia and a navigational lock and Farrakka would be completed this year.
The Finance Minister has further said that in order to take connectivity infrastructure to the next level the Government will make available a blueprint this year for developing gas grids, water grids, i-ways, and regional airports. This is based on the successful, One Nation, One Grid model that has ensured power connectivity to states at affordable rates.
She further announced that the recommendations of the High Level Empowered Committee (HLEC) on retirement of old and inefficient plants, and addressing low utilisation of Gas plant capacity due to paucity of Natural Gas, will also be taken up for implementation now.
Ms Sitharaman also said that Government is examining the performance of Ujjwal DISCOM Assurance Yojana (UDAY) to improve it further.
She said the Government will work with the State Governments to remove barriers like cross subsidy surcharges, undesirable duties on open access sales or captive generation for Industrial and other bulk power consumers. Besides these structural reforms, considerable reforms are needed in tariff policy. A package of power sector tariff and structural reforms would soon be announced.
In the housing sector, the Finance Minister announced that several reforms measures would be taken up to promote rental housing and a Model Tenancy Law will soon be finalised and circulated to the states. She further said that public infrastructure and affordable housing will be taken up through innovative instruments such as joint development and concession on land parcels held by Central Public Sector Enterprises.
For the MSME sector, Rs. 350 crore has been allocated for FY 2019-20 under the Interest Subvention Scheme, for 2 pc interest subvention for all GST registered MSMEs, on fresh or incremental loans.
The Finance Minister further said that the Government will create a payment platform for MSMEs to enable filing of bills and payment. This will help eliminate delays in payment and give a boost to investment in MSMEs.
The Finance Minister announced that the Government of India has decided to extend the pension benefit to about three crore retail traders and small shopkeepers whose annual turnover is less than Rs.1.5 crore under a new Scheme Pradhan Mantri Karam Yogi Maandhan Scheme. Enrolment into the Scheme will be kept simple requiring only Aadhaar and a bank account and rest will be on self-declaration.
Govt to issue Aadhaar card for NRIs with Indian passports : FM
The Government will issue Aadhaar card for NRIs having Indian passports, Finance Minister Nirmala Sitharaman said on Friday.
Presenting the Union Budget for 2019-20 in the Lok Sabha, the Minister said,''Aadhaar card for NRIs with Indian passports will be issued after their arrival in India, without waiting for the mandatory 180 days.''
Pan and Aadhaar cards to be inter-changeable: FM Sitharaman
In a major announcement, Finance Minister Nirmala Sitharaman on Friday msaid that that PAN and Aadhaar cards will be inter-changeable.
''For ease and convenience of tax payers, I propose to make PAN and Aadhaar interchangeable and allow those who do not have PAN cards to file income tax returns by simply quoting their Aadhaar number,'' Ms Sitharaman said said while presenting her maiden speech in the Lok Sabha.
She said that to resolve the Income Tax issue, start-ups who file declarations will not be subjected to scrutiny in valuation.
''Start-ups are taking firm roots. To resolve angel tax issue start-ups who file declarations will not be subjected to scrutiny in valuation,'' she said.
Nirmala unveils labour reforms, moot proposals to kick-start foreign investment
In her maiden Budget presented on Friday, Finance Minister Nirmala Sitharaman laid out a broad roadmap aimed at making India a $3 trillion economy by 2020 and further growing to $ 5 trillion in a few years.
She proposed changes to kick-start domestic and foreign investment, creating a blueprint for gas and water grids and regional airports.
In the Budget proposals for 2019-20 presented in Lok Sabha, Finance Minister said the government would streamline multiple labour laws into a set of four labour codes.
She said the government would also focus on training new age skills like Artificial Intelligence, robotics and 3D printing.
With a view to boost investment, the government will undertake reforms and liberlise FDI in aviation, media, animation and insurance intermediaries.
There would be steps to implement enabling measures to boost International Financial Service Centres (IFSCs) and also set up a Credit Guarantee Enhancement Corporation.
The Modi government would also initiate steps for electronic fund raising programme for listing of social enterprises and voluntary organisations, she said.
The statutory limits for foreign investments in some companies would be hiked.
The Centre has set a target of Rs 1,05,000 crore disinvestment target and also undertake a massive railway station modernisation programme.
Unveiling steps to achieve market reforms, she said SEBI will evaluate hiking minimum public shareholding to 25 per cent from 35 per cent.
Finance Minister said a Credit Guarantee Enhancement Corporation will be set up in 2019-20, action plan to deepen markets for long-term bonds with specific focus on infra sector to be put in place.
Tax rates and slabs remain unchanged for the middle-class: FM
The Budget has kept the tax rates and slabs unchanged for the middle class..''Tax rates and slabs remain unchanged for the middle-class,'' Finance Minister Nirmala Sitharaman said on Friday.
She said those earning more should contribute more, she said and announced two rates of surcharge on rich tax payers, Ms Sitharaman proposed to enhance the surcharge of three per cent on individual having taxable income between Rs 2 crore and Rs 5 crore.
For individuals earning more than Rs 5 crore a year, the applicable surcharge will be seven per cent.The government had given a rebate of Rs 12,500 in income tax making income up to Rs 5 lakh a year tax free.
Budget 2019 announces Rs 400 cr for 'world class' educational institutions
Union Budget 2019 provided an amount of Rs 400 crore in the field of education for FY 2019-20 to create 'world class institutions', Finance and Corporate Affairs Minister Nirmala Sitharaman said in Parliament on Friday.
The Finance Minister assured that the Government will also bring in a New National Education Policy to transform India's higher education system to one of the global best education systems.
The new policy proposes major changes in both school and higher education among others, better governance systems and brings greater focus on research and innovation.
To achieve the objectives of research and innovation, the Finance Minister also announced setting up of a National Research Foundation (NRF) to fund, coordinate and promote research in the country.
NRF will ensure that the overall research eco-system in the country is strengthened with focus on identified thrust areas relevant to national priorities and towards basic science without duplication of effort and expenditure, the Minister explained. The funds available with all Ministries will be integrated in NRF and would be adequately supplemented with additional funds.
"The amount of Rs 400 crore which has been provided for FY 2019-20 in the field of education is more than three times the revised estimates for the previous year."
Ms Sitharaman also announced the programme 'Study in India', that will focus on bringing foreign students to study in our higher educational institutions.
The Finance Minister disclosed that a draft legislation for setting up Higher Education Commission of India (HECI) would be presented in the year ahead.
"This will help to comprehensively reform the regulatory system of higher education to promote greater autonomy and focus on better academic outcomes," she stated.
Ms Sitharaman said that the ''Khelo India'' scheme will be expanded to provide all necessary financial support and a National Sports Education Board for Development of Sportspersons would be set up under Khelo India Scheme to popularise sports at all levels.
Highlighting the recent achievements, Ms Sitharaman said that while there was not a single Indian institution in the top 200 in the world university rankings five years back, there are three institutions now two IITs and IISc Bangalore in the top 200 bracket. This has been achieved due to concerted efforts by the institutions to boost their standards and also project their credentials better.
Giving further details, the Finance Minister said that Massive Online Open Courses (MOOC) through the SWAYAM initiative have helped bridge the digital divide for disadvantaged section of the student community.
To up-grade the quality of teaching, the Global Initiative of Academic Networks (GIAN) programme in higher education was started, aimed at tapping the global pool of scientists and researchers, she explained.
"The imprint or impacting Research Innovation and Technology scheme began as a Pan-IIT and IISc joint initiative to develop a roadmap for research to solve major engineering and technology challenges in selected domains needed by the country. It is because of this that Higher Educational Institutions are now becoming the centres of innovation," the Minister said.
FM proposes new channel for start-ups
In her maiden Budget speech, the Union Finance Minister Nirmala Sitharaman on Friday proposed to start a channel within the DD bouquet of channels exclusively for start-ups.
Ms Sitharaman said the channel will serve as a platform for promoting start-ups, discussing issues affecting their growth, matchmaking with venture capitalists and funding and tax planning.
She also said that this channel will be designed and executed by start-ups themselves.
Referring to start-ups, the Finance Minister said that to resolve the so-called 'angel tax' issue, the start-ups and their investors, who file requisite declarations and provide information in their returns will not be subjected to any kind of scrutiny in respect of valuations of share premiums.
"The issue of establishing identity of the investor and source of his funds will be resolved by putting in place a mechanism of e-verification", she informed and added that "with this, funds raised by start-ups will not require any kind of scrutiny from the Income Tax Department".
She also said that the condition for carry forward and set off of losses in cases of eligible start-ups is proposed to be relaxed enabling them to carry forward their losses on satisfaction of any one of the two conditions - continuity of 51 percent shareholding/voting power of continuity of 100 percent of original shareholders.
"Further, the provision which allows exemption of capital gains from sale of residential property on investment of net consideration in equity shares of eligible start-up shall be extended by 2 years", the Finance Minister added.
Ms Sitharaman also said that the benefit will be available for sale of residential property on or before March 31, 2021 and added that "the condition of minimum holding of 50 percent of share capital or voting rights in the start-up is proposed to be relaxed to 25 percent".
The condition restricting transfer of new asset being computer or computer software is also proposed to be relaxed from the current 5 years to 3 years, Ms Sitharaman said.
Strengthening of MSMEs & 'Make in India' find strong voice in Budget 2019
Union Budget 2019 announced various proposals aimed at strengthening Micro, Small and Medium Enterprises including ease of access to credit the Government has introduced scheme for providing of loans upto Rs. 1 crore within 59 minutes through an online portal.
Delivering her budget speech in Parliament on Friday, Finance and Corporate Affairs Minister Nirmala Sitharaman said under the Interest Subvention Scheme, an amount of Rs. 350 crore has been allocated for FY 2019-20 for 2 pc interest subvention for all GST registered MSMEs, on fresh or incremental loans.
The Finance Minister also announced the Government's intent to create a payment platform for MSMEs to enable filing of bills and payment on the platform itself to eliminate delays in government payments.
The Finance Minister further informed that the Government has decided to extend pension benefit to about three crore retail traders and small shopkeepers whose annual turnover is less than Rs.1.5 crore under a new scheme named Pradhan Mantri Karam Yogi Maandhan Scheme. Enrolment into the Scheme will be kept simple requiring only Aadhaar and a bank account and rest will be on self-declaration.
The Finance Minister also announced that under the Scheme of Fund for Upgradation and Regeneration of Traditional Industries' (SFURTI) 100 new clusters will be set up during 2019-20 enabling 50,000 artisans to join the economic value chain. SFURTI aims to set up Common Facility Centres (CFCs) to facilitate cluster based development to make traditional industries more productive, profitable and capable for generating sustained employment opportunities. Focused sectors are Bamboo, Honey and Khadi clusters.
The Minister further announced that the Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship' (ASPIRE) would be consolidated for setting up of 80 Livelihood Business Incubators (LBIs) and 20 Technology Business Incubators (TBIs)in 2019-20 to develop 75,000 skilled entrepreneurs in agro-rural industry sectors.
The Budget says that the Government will support private entrepreneurships in driving value-addition to farmers' produce from the field and for those from allied activities. Dairying through cooperatives will be encouraged by creating infrastructure for cattle feed manufacturing, mild procurement, processing and marketing.
The Union Budget has also made proposals under indirect taxes to promote Make in India, that may also benefit the MSME sector. For example, to provide domestic industry a level playing field, basic Customs Duty is being increased on items such as cashew kernels, PVC, Vinyl flooring, tiles, metal fitting, mountings for furniture, auto parts, certain kind of synthetic rubbers, marble slabs, optical fibre cable, CCTV camera, IP camera, digital and network video recorders, etc.
Exemptions from Custom Duty on certain electronic items which are now being manufactured in India are being withdrawn. End use based exemptions on palm stearin, fatty oils, are being withdrawn. Exemptions to various kind of papers are being withdrawn.(UNI)
