STRIDE SCHEME
07/06/2019
RAISING OF FDI IN INSURANCE BROKING TO 100% UPSETS DOMESTIC BROKERS
07/08/2019

THE NEWS:

After a pre-election populous Interim Budget in February, the government presented the Union Budget to boost infrastructure and foreign investment at a time when the economy is showing signs of a slowdown.

KEY-TAKEAWAYS FROM THE BUDGET:

Tax Regime:

  • There are no changes in personal income tax rates.

  • There is an increased tax rate for the super-rich:
    • 3 percent surcharge on Rs 2 crore income
    • 7 percent on Rs 5 crore and above.
  • The Budget provides an additional Rs 1.5 lakh tax relief on home loans.
  • Annual turnover limit for 25 percent corporate tax rose to Rs 400 crore from Rs 250 crore.
  • Taxpayers with an annual turnover of less than Rs 5 crore to have to file only quarterly.
  • Direct tax revenue has increased by 78 percent.
  • Government hike custom duty on fuel by 1 rupee, gold, and precious items; Petrol & diesel to get costlier.

PAN and Aadhaar now Interchangeable:

  • More than 120 crore Indians now have Aadhar card, therefore for ease of taxpayers, the government proposed to make PAN card and Aadhar card interchangeable.
  • It will allow those who do not have PAN to file returns by simply quoting Aadhar number and use it wherever they require using PAN.

To promote Digital Payments:

  • 2 percent Tax Deducted at Source (TDS) on withdrawals of Rs 1 crore in a year from bank accounts for business payments
  • There is no change in digital payment. Furthermore, merchant discount rate (MDR) charges have been waived on cashless payment.
  • Increased digitization will not only mean Ease of Living but considerably reduce corruption and human interaction.

Ease of Living:

  • Rs 3,000 pension per month for informal sector workers
  • Aadhaar card under 180 days for NRIs on arrival in India
  • Government is also working to open embassies in countries where India does not have a resident diplomatic mission as yet.

Transportation: Inter-operable One Nation One Transport Card:

  • Now, one National transport card for universal travel can be used on various modes of transport (road, railways, etc).
  • Also, the card can be used as an ATM card for withdrawing money.
  • Government is also planning to create Manufacturing, Repair and Operate (MRO) industry.
  • Purchasing Power Parity (PPP) to be used to unleash faster development and the delivery of passenger freight services.
  • A comprehensive restructuring of National Highways Programme for creation of National Highways Grid.
  • The government envisions using rivers for cargo transport; it will also decongest roads and railways.

Economy:

  • Fiscal deficit in FY19 at 3.3 percent of the Gross Domestic Product (GDP)
  • The government will start raising part of borrowing in foreign currency
  • Government external debt to GDP is among the lowest in the world.

Women Empowerment:

  • Women SHG Interest Subvention Programme to be expanded to all districts in India
  • Rs 1 lakh loan to be provided for SHG women members
  • Every verified woman SHG member having a Jan Dhan account can avail Rs 5,000 rupees overdraft facility

Banking Reform:

  • On purchase of high-rate pooled assets of NBFC amounting of Rs 1 lakh crore in this FY, the government will provide a one-time 6-month credit guarantee
  • Propose to provide Rs 70,000 crore capital for PSU Banks
  • Regulation of HFCs (Housing Finance Cos) to move to RBI from National Housing Bank

Disinvestment:

  • Government to modify the present policy of retaining 51 percent stake in PSUs
  • Government to continue with strategic divestment of select CPSEs
  • Divestment target of Rs 1.05 lakh crore for FY20

Railways:

  • A new PPP model will usher the new dawn of Indian railway.
  • Railways to be encouraged to invest more in suburban rail network via SPVs
  • Railway infrastructure will need an investment of Rs 50 lakh crore between 2018 and 2030.

MSME:

  • Propose easing angel tax for startups
  • 2 percent interest subvention for GST-registered MSME on fresh or incremental loans.
  • ‘Stand Up India’ Scheme to continue till 2025
  • Propose to commence television channel for start-ups
  • To extend pension benefit to retail traders with annual turnover less than Rs 1.5 crore
  • The Minister proposes a modern tenancy law. Loans of up to Rs 1 crore to be given to MSMEs for ease of access.
  • The government will create a payment platform for MSMEs to enable them to pay bills, and save time. The Government will extend pension benefits to 3 crore retail traders and shopkeepers who have revenue of less than Rs 1.5 crore.
  • This will be called the PM Karam Yogi Maan Dhan scheme.

Education:

  • Government to launch ‘Study in India’ program to attract foreign students in higher education
  • Allocate Rs 400 crore for world-class higher education institutions in FY20.
  • To unveil the new education policy.
  • National research foundation to fund, coordinate and to promote research in the country.
  • New Higher Education Commission with a focus on higher autonomy
  • New national education policy to propose changes in the school.

Tourism:17 iconic world-class tourist sites to be developed

FDI:

  • Local sourcing norms will be relaxed for the Single brand retail sector
  • Government of open FDI in aviation, insurance, animation AVGC, and media

Investment:

  • Existing Know Your Customers (KYC) norms for Foreign Portfolio Investments (FPIs) to be rationalized and simplified to make it more investor-friendly
  • Credit Guarantee Enhancement Corporation to be set up long-term bonds with a specific focus on infra sector
  • Propose Social Stock Exchange under SEBI for listing social enterprises & voluntary organizations
  • To merge the NRI portfolio route with FPI route
  • To hike the statutory limit for foreign investment in some companies
  • To set up a credit guarantee enhancement corporation
  • The government will take up measures to make RBI & SEBI depositories inter-operable
  • SEBI to mull increasing minimum public shareholding to 35 percent from 25 percent.
  • User friendliness of trading platforms for corporate bonds will be reviewed, including issues arising out of capping of International Securities Identification Number
  • To deepen corporate tri-party repo market in corporate debt securities. Plan to enable stock exchanges to allow AA rated bonds as collaterals.
  • Annual Global Investors’ Meet for attracting global players to come and invest in India.
  • To allow FPIs to subscribe to listed debt papers of real estate investment trust (REITs).

Agriculture:

  • Government to promote innovative ‘Zero Budget farming’.
  • 10,000 new farmer producer organizations.
  • 80 Livelihood business incubators and 20 technology business incubators to be set up in 2019-20 under ASPIRE to develop 75,000 skilled entrepreneurs in agro-rural industries

Space:

  • India has emerged as a major space power and now the time has come to harness our ability commercially.
  • The government provides to incorporate, New Space India Limited (NSIL), a public sector enterprise, to tap benefits of Indian Space Research Organization (ISRO).

Sports:

  • To popularize sports at all levels, the National Sports Education Board for development of sportspersons to be set up under Khelo India.

Auto Sector:

  • FAME II scheme aims to encourage faster adoption of electric vehicles by the right incentives and charging infrastructure.

For Rural India:

  • New Jal Shakti ministry will work with states to ensure Har Ghar Jal for all rural houses by 2024.
  • Pradhan Mantri Gram Sadak Yojana phase 3 is envisaged to upgrade 1,25,000 km of road length over the next 5 years.
  • The government will set up 100 new clusters for 50,000 artisans in FY20
  • To invest Rs 80,250 crore for upgradation of roads under PM Gram Sadak Yojana
  • Every single rural family except those unwilling to have electricity by 2022.

Bridging the Rural-Urban Divide:

  • The government has announced development schemes focused on bridging the rural-urban divide.
  • Targeting 2022, India’s 75th year of independence, the government announced that all houses would have electricity and cooking gas.
  • All rural households would have a clean water supply by 2024.

Railway Station Modernization:

  • The Government will launch a massive programme of railway station modernization this year to make railway travel a pleasant and satisfying experience for the common citizen.

Social Stock Exchange:

  • There is a need to take capital markets closer to the masses and meet various social welfare objectives related to inclusive growth and financial inclusion.
  • To meet this need, the Budget has proposed to initiate steps towards creating an electronic fundraising platform – a social stock exchange – under the regulatory ambit of Securities and Exchange Board of India (SEBI).
  • It will function to list social enterprises and voluntary organizations working for the realization of a social welfare objective so that they can raise capital as equity, debt or as units like a mutual fund.

A VISION OF 5 TRILLION:

  • 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 fulfill the aspiration of making India a 5 Trillion Dollar economy.
  • In the last five years, the Indian economy has added one trillion dollar due to various initiatives and reforms undertaken by the government.
  • India is now the sixth largest economy in the world, up from 11th position five years ago.
  • The Finance Minister flagged ten points of the Government’s ‘Vision for the Decade’:
    • Building physical and social infrastructure
    • Digital India reaching every sector of the economy
    • Pollution free India with green Mother Earth and Blue Skies
    • Make in India with particular emphasis on MSMEs, Start-ups, Defense manufacturing, automobiles, electronics, fabs and batteries, and medical devices
    • Water, water management, clean Rivers
    • Blue Economy
    • Space programmes: Gaganyan, Chandrayan and Satellite programmes
    • Self-sufficiency and export of food-grains, pulses, oilseeds, fruits, and vegetables
    • Healthy society – Ayushman Bharat, well-nourished women & children. Safety of citizens
    • Team India with Jan Bhagidari. Minimum Government Maximum Governance

LEFT UNSPOKEN IN BUDGET:

  • Defense: At a time when India’s security risks are at an all-time high, the budget turned out to be a big disappointment for the armed forces. No specific mention of the forces came as a major dampener for both the forces and the country at large.
  • Employment: The Budget disappointed one and all as no move was announced to ease India’s biggest problem, ‘unemployment’.
  • Tax Dampener: Standard deduction and TDS threshold didn’t find a mention in the budget. It came as a dampener for the salaried taxpayer because, in the interim budget, the government had promised to hike these limits.
  • Long-Term Capital Gains: There were hopes regarding the long-term capital gains (LTCG) tax on equities that in some quarters the budget could do something to address the issue. But, the budget has not discussed anything on the issue.

CONCLUSION:

In conclusion, the budget can be termed as a ‘politico-socio-economic’ budget, bringing together woman power representing 48 percent of the population and building foundation for US$ 5 trillion economy in next five to six years. While promoting rural India to generate new jobs, the budget releases the pressures on urban cities by announcing GAON GARIB & KISHAN schemes; by promising power and gas to every single household by 2022, pension to 35 million with a turnover of Rs. 15 million. Now, it is hoped that this roadmap will go a long way in supporting a sustainable ecosystem and development of the Indian economy.

HINDI Download

Leave a Reply

Your email address will not be published. Required fields are marked *

Request a Call Back