Union Budget 2020-21 Important Highlights with PDF

The present finance minister Nirmala Sitharaman presented the Union Budget for 2020-21 on February 01, 2020.

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Some Important Data Highlights (2020-21):

Nominal growth of GDP estimated at 10%.
Receipts: estimated at Rs.22.46 lakh cr
Expenditure: at Rs.30.42 lakh cr.
Fiscal deficit of 3.8% in RE 2019-20 and 3.5% for BE 2020-21.

Theme of the budget

Theme of the budget: The Union Budget has been structured on the overall theme of “Ease of Living.” And there are three prominent themes of the Budget:

Aspirational India – better standards of living with access to health, education and better jobs for all sections of the society
Economic Development for all – “Sabka Saath , Sabka Vikas , Sabka Vishwas”.
Caring Society – both humane and compassionate; Antyodaya as an article of faith.

Now from here onwards, we have presented the budget in three parts. Part 1 mentions the various facts and figures mentioned in the budget. Part 2 contains the details of schemes and initiatives mentioned in the Budget Speech and Part 3 presents the various proposals mentioned in the budget. This is followed by tax slabs.

Part 1: Facts and Figures

The facts and figures have been mentioned in accordance with the three themes of the budget.

Aspirational India

1.1 Agriculture, Irrigation and Rural Development

Government has introduced 16 point action plan for Agriculture, Irrigation and Rural Development. 2.83 lakh crore to be allocated for the following 16 Action Points. Its divided, inter-alia;

a) For Agriculture, Irrigation & allied activities – Rs 1.60 lakh crore
b) For Rural development & Panchayati Raj – Rs 1.23 lakh crore

Some important points in this 16 point action plan are:
- To build a seamless national cold supply chain for perishables, inclusive of milk, meat and fish, the Indian Railways will set up a “Kisan Rail” – through PPP arrangements. There shall be refrigerated coaches in Express and Freight trains as well.
- Krishi Udaan will be launched by the Ministry of Civil Aviation on international and national routes. This will immensely help improve value realisation especially in North-East and tribal districts.
- Village Storage scheme is proposed to be run by the SHGs. This will provide farmers a good holding capacity and reduce their logistics cost. Women, SHGs shall regain their position as “Dhaanya Lakshmi”.
- Financing on Negotiable Warehousing Receipts (e-NWR) has crossed more than`6000 crore. This will be integrated with e-NAM.
- Agriculture credit target for the year 2020-21 has been set at Rs 15 lakh crore. All eligible beneficiaries of PM-KISAN will be covered under the KCC scheme.
- Eliminate Foot and Mouth disease, brucellosis in cattle and also peste des petits ruminants (PPR) in sheep and goat by 2025. Doubling of milk processing capacity from 53.5 million MT to 108 million MT by 2025.
- Blue Economy: Government proposes to put in place a framework for development, management and conservation of marine fishery resources.
- To raise fishery exports to Rs 1 lakh crore by 2024-25.
- Under Deen Dayal Antyodaya Yojana for alleviation of poverty, 58 lakh SHGs have been mobilised.

1.2 Wellness, Water and Sanitation

Govt has provided for the health sector about Rs 69,000 crores that is inclusive of Rs 6400 crores for Prime Minister Jan Arogya Yojana (PMJAY)
Total allocation for Swachh Bharat Mission is about Rs 12,300 crore in 2020-21.

1.3 Education and Skills

The New Education Policy will be announced soon.
99,300 crore for education sector and Rs. 3000 crore for skill development in 2020-21.
Degree level full-fledged online education program by Top-100 institutions in the National Institutional Ranking Framework.

Economic Development

2.1 Industry, Commerce and Investment

24 lakh vendors are on the Government e-Marketplace (GeM) platform. Its proposed to take its turnover to Rs 3lakh crores.
about Rs 27,300 crore for development and promotion of Industry and Commerce for the year 2020-21.

2.2 Infrastructure

A National Logistics Policy will be released soon. It will clarify the roles of the Union Government, State Governments and key regulators. It will create a single window e-logistics market and focus on generation of employment, skills and making MSMEs competitive.
Aims to achieve electrification of 27000 Km of railway tracks.
148 km long Bengaluru Suburban transport project at a cost of Rs 18600 crore, would have fares on metro model. Central Government would provide 20% of equity and facilitate external assistance up to 60% of the project cost.
100 lakh crore to be invested on infrastructure over the next 5 years. Rs.1.7 lakh crore proposed for transport infrastructure in 2020-21.
22, 000 crore proposed for power and renewable energy sector in 2020-21.
Accelerated development of highways to be undertaken, including: 2500 Km access control highways. 9000 Km of economic corridors. 2000 Km of coastal and land port roads. 2000 Km of strategic highways.
Economic activity along river banks to be energised as per Prime Minister’s Arth Ganga concept.
100 more airports to be developed by 2024 to support Udaan scheme.

2.3 New Economy

Fibre to the Home (FTTH) connections through Bharatnet to link 100,000 gram panchayats this year.
6000 crore proposed for Bharatnet programme in 2020-21.
8000 crore proposed over five years for National Mission on Quantum Technologies and Applications.

Caring Society

Focus on: Women & child, Social Welfare and, Culture and Tourism

3.1 Women & child

Gross enrolment ratio of girls across all levels of education is now higher than boys. At elementary level, it is 94.32 % as against 89.28% for boys. At Secondary level, it is 81.32 % as compared to 78 %, At higher secondary level girls have achieved a level of 59.70 % as compared to 57.54 % for boys.
Rs 35600 crore for nutrition-related programmes for the financial year 2020-21.
Allocation of Rs. 35,600 crore for nutrition-related programmes proposed for the FY2020-21.

3.2 Social Welfare

budget provision of about Rs 85,000 crore for 2020-21 towards the welfare of Scheduled Castes and Other Backward classes.
For development and welfare of Scheduled tribes Rs 53,700 crore in 2020-21.
allocation of about ` 9,500 crore is being provided for senior citizens and Divyang in 2020-21.

3.3 Culture & Tourism

Five archaeological sites would be developed as iconic sites with onsite Museums. They are: Rakhigarhi (Haryana), Hastinapur (Uttar Pradesh) Shivsagar (Assam), Dholavira (Gujarat) and Adichanallur (Tamil Nadu).
re-curation of the Indian Museum in Kolkata, which is the oldest in the country.
A maritime museum would be set up at Lothal – the Harrapan age maritime site near Ahmedabad, by Ministry of Shipping.
India has moved up from rank 65 in 2014 to 34 in 2019 in the Travel & Tourism Competitive Index (World Economic Forum).
Rs 3,150 crore for Ministry of Culture for 2020-21.
Allocation for Environment & Climate Change is Rs 2,500 crore for 2020-21.

Other facts and figures

Rs 100 crore allocated for G20 presidency in 2022.
For development of Union Territories of J&K and Ladakh an amount of Rs. 30,757 crore provided for the financial year 2020-21. The Union Territory of Ladakh has been provided with Rs. 5,958.
Deposit Insurance and Credit Guarantee Corporation (DICGC) has been permitted to increase Deposit Insurance Coverage to Rs. 5 lakh from Rs.1 lakh per depositor.
10 banks consolidated into 4. Rs. 3,50,000 crore capital infused.
The limit for NBFCs to be eligible for debt recovery under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002 is proposed to be reduced from Rs 500 crore to asset size of Rs 100 crore or loan size from existing Rs 1 crore to Rs 50 lakh.
Government to sell its balance holding in IDBI Bank to private, retail and institutional investors through the stock exchange.
Window for MSME’s debt restructuring by RBI to be extended by one year till March 31, 2021.
For selected sectors such as pharmaceuticals, auto components and others, we propose to extend handholding support – for technology upgradations, R&D, business strategy etc. A scheme of Rs 1000 crore will be anchored by EXIM Bank together with SIDBI. Both these institutions would contribute Rs 50 crore each. This Rs 100 crore would be achieved towards equity and technical assistance. Debt funding of Rs 900 crore from banks would be made available.
The limit for FPI in corporate bonds, currently at 9% of outstanding stock, will be increased to 15% of the outstanding stock of corporate bonds.
Government to sell a part of its holding in LIC by way of Initial Public Offer (IPO).

Part 2: Schemes mentioned in the Budget Speech

Scheme for Reversion of duties and taxes on exported products will be launched this year– It is proposed to digitally refund to exporters, duties and taxes levied at the Central, State and local levels, such as electricity duties and VAT on fuel used for transportation, which are not getting exempted or refunded under any other existing mechanism.
National Technical Textiles Mission to be set up:- With four-year implementation period from 2020-21 to 2023-24. At an estimated outlay of Rs 1480 crore. To position India as a global leader in Technical Textiles.
New scheme NIRVIK to be launched to achieve higher export credit disbursement, which provides for: Higher insurance coverage, Reduction in premium for small exporters and Simplified procedure for claim settlements.
‘Vivad Se Vishwas’Scheme- No Dispute but Trust Scheme- Under the proposed ‘Vivad Se Vishwas’ scheme, a taxpayer would be required to pay only the amount of the disputed taxes and will get complete waiver of interest and penalty provided he pays by 31^st March, 2020. Those who avail this scheme after 31st March, 2020 will have to pay some additional amount. The scheme will remain open till 30th June, 2020.
“TB Harega Desh Jeetega” campaign has been launched. The govt has proposed to strengthen these efforts realise our commitment to end Tuberculosis by 2025.
Prime Minister announced from the Red Fort the Jal Jeevan Mission. Our government has approved Rs 3.60 lakh crore for this Mission. This scheme also places emphasis on augmenting local water sources, recharging existing sources and will promote water harvesting and de-salination. Cities with over a million population will be encouraged to meeting this objective during the current year itself. During the year 2020-21 the scheme would be provided budget of Rs 11,500 crore.
Deen Dayal Antyodaya Yojana – 0.5 crore households mobilized with 58 lakh SHGs for poverty alleviation.
Jan Aushadhi Kendra Scheme to offer 2000 medicines and 300 surgicals in all districts by 2024.
A scheme focussed on encouraging manufacture of mobile phones, electronic equipment and semi-conductor packaging will be announced soon.

Part 3: Proposals

Please note these are only proposed as of now and you can see such changes or results in near future

It is proposed to set up Viability Gap funding window for setting up hospitals in the PPP mode.
To expand Jan Aushadhi Kendra Scheme to all districts offering 2000 medicines and 300 surgicals by 2024.
Proposal to set up an Investment Clearance Cell that will provide “end to end” facilitation and support, including pre-investment advisory, information related to land banks and facilitate clearances at Centre and State level.
It is proposed to develop five new smart cities in collaboration with States in PPP mode.
it is proposed to expand the national gas grid from the present 16200 km to 27000 km.
The government proposes to establish an Indian Institute of Heritage and Conservation under Ministry of Culture; it shall have the status of a deemed University to start with.
It is proposed to set up a National Recruitment Agency (NRA) as an independent, professional, specialist organisation for conduct of a computer-based online Common Eligibility Test for recruitment to Non- Gazetted posts.

Tax Proposals

Direct Tax

Income Tax Slab– Government has introduced as new (optional) income tax slab. It must be noted that a person can opt for old tax slab or the new one.

Taxable Income Slab (Rs.)	Existing tax rates	New tax rates
0-2.5 Lakh	Exempt	Exempt
2.5-5 Lakh	5%	5%
5-7.5 Lakh	20%	10%
7.5-10 Lakh	20%	15%
10-12.5 Lakh	30%	20%
12.5-15 Lakh		25%
Above 15 Lakh		30%

The new tax regime shall be optional for the taxpayers. New regime to entail estimated revenue forgone of Rs. 40,000 crore per year.
Around 70 of the existing exemptions and deductions (more than 100) to be removed in the new simplified regime.
In the interim Budget of 2019, government had exempted individuals having income up to Rs 5 Lakh from paying any income tax.

Dividend Distribution Tax– Currently, companies are required to pay Dividend Distribution Tax (DDT) on the dividend paid to its shareholders at the rate of 15% plus applicable surcharge and cess in addition to the tax payable by the company on its profits.

Tax rate of 15% extended to new electricity generation companies.
100% tax exemption to the interest, dividend and capital gains income on investment made in infrastructure and priority sectors before 31st March, 2024 with a minimum lock-in period of 3 years by the Sovereign Wealth Fund of foreign governments.
Start-ups with turnover up to Rs. 100 crore to enjoy 100% deduction for 3 consecutive assessment years out of 10 years.
Cooperatives are currently taxed at a rate of 30% with surcharge and cess. Option to cooperative societies to be taxed at 22% + 10% surcharge and 4% cess with no exemption/deductions.
For MSME, Turnover threshold for audit increased to Rs. 5 crore from Rs. 1 crore for businesses carrying out less than 5% business transactions in cash.
Affordable housing- Additional deduction up to Rs. 1.5 lakhs for interest paid on loans taken for an affordable house extended till 31st March, 2021. Date of approval of affordable housing projects for availing tax holiday on profits earned by developers extended till 31st March, 2021.
CBDT to adopt a Taxpayers’ Charter.
Instant PAN to be allotted online through Aadhaar.

Indirect Tax

Simplified return with features like SMS based filing for nil return and improved input tax credit flow to be implemented from 1st April, 2020 as a pilot run.
Dynamic QR-code capturing GST parameters proposed for consumer invoices.
Customs duty raised on footwear to 35% from 25% and on furniture goods to 25% from 20%.
Basic customs duty on imports of news print and light-weight coated paper reduced from 10% to 5%.

Unprecedented Milestones and Achievements of Indian Economy

India now the fifth largest economy of the world.
4% average growth clocked during 2014-19 with inflation averaging around 4.5%.
271 million people raised out of poverty during 2006-16.
India’s Foreign Direct Investment elevated to US$ 284 billion during 2014-19 from US$ 190 billion during 2009-14.
Central Government debt reduced to 48.7% of GDP (March 2019) from 52.2% (March 2014).
Two cross-cutting developments:
Proliferation of technologies (Analytics, Machine Learning, robotics, Bio-informatics and Artificial Intelligence).
Highest ever number of people in the productive age group (15-65 years) in India.
GST removed many bottlenecks in the system.

Future Aim for sustaining India’s unique global leadership, driven by Digital Revolution

Seamless delivery of services through Digital Governance.
Improvement in physical quality of life through National Infrastructure Pipeline.
Risk mitigation through Disaster Resilience.
Social security through Pension and Insurance penetration.

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