Finance Minister Nirmala Sitharam anannounced key reforms that sought to address both economic and social aspects of the country. The three prominent themes of Union Budget 2020-21 were:
- Aspirational India.
- Caring Society.
- Economic Development
Highlights of the new budget
Finance Minister Nirmala Sitharam in her 160 minute long speech proposed a list of plans for budget 2020 vision. Below is a glimpse of the plan-
Middle Class India Gets A Rs 40,000 Crore Boost. UiThe new income tax slabs and rates are as under:
Rs 5-7.5 lakh per annum: 10 percent from 20 percent earlier.
Rs 7.5-10 lakh per annum: 15 percent from 20 percent earlier.
Rs 10-12.5 lakh per annum: 20 percent from 30 percent earlier.
Rs 12.5-15 lakh per annum: 25 percent from 30 percent earlier.
Above Rs 15 lakh per annum: 30 percent without any exemptions
Property developers will also get a tax holiday on the profit earned on affordable housing projects approved by March 31, 2020
Dividend Distribution Tax Abolished
The Narendra Modi-led government eliminated the dividend distribution tax that’s levied on dividends issued by companies which an be a big relief for many.
Fiscal Deficit Target
India’s fiscal deficit settled at 3.8 percent in 2019-20 and is targeted at 3.5 percent in 2020-21.the government has decided to invoke the ‘escape clause’ provided for in 2018 amendments to the Fiscal Responsibility and Budget Management Act.
LIC Listing Proposed
The government has proposed to sell a part of its stake in Life Insurance Corporation of India through an initial public offering, the finance minister said in her budget speech.
The finance minister allocated Rs 1.7 lakh crore for a National infra Pipeline that aims “to improve ease of living for every citizen of our country” and provides huge opportunity for employment.
Cash reward system envisaged to incentivize customers to seek invoice.
To amend I-T Act to allow faceless appeals.
Proposes new National Policy on Official Statistics to improve data collection and dissemination with the help of technology
Minister of Finance Nirmala Sitharaman in her Budget speech for FY20-21 spelt out point plan to revive the struggling agriculture sector and increase rural incomes and demand, emphasising that the government remained committed to doubling farmers’ incomes by 2022.Analysts point out that the Budget does not lay out a clear plan to achieve the doubling of farmer incomes. The focus on infrastructure, markets, value chains and clusters is noteworthy.
The issue is not one or two areas of weakness: Accumulated infirmities have tied us in knots. So there is a call for an expansionary fiscal policy.the finance minister’s caution on both more consumption spending and capital investment in the Budget is a reflection of one stark truth: There is now less confidence, even in government, in the government’s execution capabilities
However,Many of the details announced in the Budget are potentially promising.
So is the Budget disappointing?
Depends on what you expected.
The Budget can be criticised for its lack of boldness. But in a way, that is the most honest thing about it.You can perhaps feel a sense of relief that the government did not take another big wrecking ball and hit the economy.