BUDGET 2020

Here are the highlights of Budget 2020

-Allocation

In the 2020-21 budget, funds of 12,000 crore have been allocated for construction of new lines, 2,250 crore for gauge conversion, 700 crore for doubling, 5,786.97 crore for rolling stock and 1,650 crore for signalling and telecom.

-For Railways

-The railways got a budgetary allocation of 70,000 crore and an outlay for capital expenditure amounting to 1.61 lakh crore

-The budget also proposed setting up of a large solar power capacity alongside the rail tracks on land owned by the railways.

-Redevelopment of four stations and operation of 150 passenger trains would be done through the public-private-partnership (PPP) mode.

-It also announced introduction of more Tejas type trains which will connect iconic tourist destinations.

-All you need to know about new income tax slabs

In Budget 2020, Finance Minister Nirmala Sitharaman proposed a new set of income tax rates for those earning up to 15 lakh a year.

She proposed a 10% tax on income between 5 and 7.5 lakh from 20 per cent now.

Income between 7.5 lakh to 10 lakh will also attract a lower tax of 15%. For annual income between 10 lakh and 12.5 lakh, the income tax rate has been reduced to 20% from 30%.

Those earning 12.5 lakhs to 15 lakhs will pay 25 per cent tax. The Finance Minister said that those earning over 15 lakh would continue to pay the tax at the current rate of 30%. The new tax regime is optional and an individual taxpayer can opt for the structure that is beneficial for him.

-Finance Ministry sources said that there are significant numbers of people, who for various reasons, are not able to spare money from their income to invest in the various saving instruments such as Provident Fund, pension schemes, interest on house loans, insurance etc and therefore are unable to take full advantage of all deductions.

-Pensioners, job starters, entrepreneurs to gain from new income tax regime

Opting for the new tax rates proposed in the budget could be beneficial for job-starters, pensioners, entrepreneurs and those taxpayers unable to claim available deductions and exemptions under the current tax structure, government sources said.

-On income tax

The cut in income tax rates, which would help save 1,820 to 20,300 a year in tax for persons with annual income of above 10 lakh, was however conditioned on foregoing current exemptions and deductions, including standard deduction for 50,000 as well as the waiver earned on payment of up to 1.5 lakh in tuition fee of children, and contribution towards insurance premium and provident fund.

-Finance Minister Nirmala Sitharaman on Saturday introduced new income tax slabs for individuals, abolished dividend tax for companies and announced record spending in agriculture and infrastructure sectors

Manufacturing

-Scheme focused on encouraging manufacture of mobile phones, electronic equipment and semiconductor packaging to be introduced

-To encourage private sector to build Data Centre Parks throughout the country

-Subsidy

-Food subsidy seen at 1.15 trillion ($16.18 billion) in 2020/21

-Petroleum subsidy seen at 409.15 billion ($5.76 billion) in 2020/21

-Fertiliser subsidy 713.09 billion ($10.03 billion) in 2020/21

-For Power sector

-India to provide 273 billion ($3.84 billion) for promotion of industry and commerce

-Firms operating old thermal power plants advised to shut units if emission norms not met

-India to allocate 44 billion ($619.11 million) for clean air incentives in cities with over 1 million people

-Manufacturing

-Scheme focused on encouraging manufacture of mobile phones, electronic equipment and semiconductor packaging to be introduced

-To encourage private sector to build Data Centre Parks throughout the country

80 billion ($1.13 billion) over five years to be provided for quantum technologies and applications

-Milk processing capacity to be doubled by 2025

-More airports, highways

-India to develop 100 more airports by 2024

-India to monetize over 6,000 km of highways in 12 lots by 2024

-India to privatize at least one major port

-Things that will become dearer

-Customs duty on walnuts raised to 100% from 30%

-Customs duty on autos and auto parts raised by up to 10%

-Customs duty on platinum and palladium cut to 7.5% from 12.5% for certain purposes

-Nominal health cess of 5% on import of medical devices

-SUBSIDY

* Food subsidy seen at 1.15 trillion in 2020/21

* Petroleum subsidy seen at 409.15 billion in 2020/21

* Fertiliser subsidy 713.09 billion in 2020/21

-GROWTH/DEFICIT

  • Nominal GDP growth in 2020/21 estimated at 10%
  • Fiscal deficit for 2019/20 seen at 3.8% of GDP
  • Fiscal deficit for 2020/21 seen at 3.5% of GDP
  • Fiscal deficit for 2021/22 seen at 3.3% of GDP
  • Fiscal deficit for 2022/23 seen at 3.1% of GDP
  • Revenue deficit seen 2.7% of GDP in FY21

-Sub-urban rail will boost multi-modal connectivity and open up new economic opportunities for areas in and around cities like Bengaluru, said Ola Mobility Institute

-Moody’s Investors Service said the budget highlights the challenges to fiscal consolidation. India’s government debt is already “significantly higher" than the average for its Baa-rated peers, said Gene Fang, associate managing director of sovereign risk.

-Custom duty on fan upped to 20% vs 10%. Custom duty on specified goods used in refrigerators & ac hiked to 12.5% vs 10%.

-The announcement of a forthcoming policy to allow the private sector to build data center parks could potentially benefit all IT firms, including TCS, Infosys, Wipro, HCL Technologies, Tech Mahindra, along with mid-sized firms like LTI, Mindtree, Persistent, and Hexaware. Adani Enterprises also stands to benefit from this development.

-Infra sector: 100 lakh crore to be invested on infrastructure over the next 5 years

National Infrastructure Pipeline:

-Rs. 103 lakh crore worth projects; launched on 31st December 2019

-More than 6500 projects across sectors, to be classified as per their size and stage of development

-A National Logistics Policy to be released soon:

-To clarify roles of the Union Government, State Governments and key regulators.

-A single window e-logistics market to be created

-Focus to be on generation of employment, skills and making MSMEs competitive

-National Skill Development Agency to give special thrust to infrastructure-focused skill development opportunities

-Project preparation facility for infrastructure projects proposed

-To actively involve young engineers, management graduates and economists from Universities

-Infrastructure agencies of the government to involve youth-power in start-ups

1.7 lakh crore proposed for transport infrastructure in 2020-21

-Markets: A dividend distribution tax for companies will be scrapped, entailing a revenue loss of 250 billion

-Excise duties: Tax on cigarettes and other tobacco products to be increased

-FM Nirmala Sitharaman today in Budget 2020 proposed new income tax slabs and lower rates. These income tax rates are optional and are available to those who are willing to forego some exemptions and some deductions.

-The government raised fiscal deficit target to 3.8% of the GDP from 3.3% pegged earlier for 2019-20 due to revenue shortage


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