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Union Budget 2019 Highlights

Union Budget 2019 Highlights 

Union Budget of India is the country’s comprehensive Annual Financial Statement. It consists of details of the government's capital, revenue and expenditures. Article 112 of the constitution says, "the Union Government lays a statement of its estimated receipts and expenditure for that year, from April 1 to March 31, before both the Houses of Parliament.

The Budget, in a nutshell, is nothing but a statement of income and expenditure. Two important elements on both sides - income and expenditure - are Revenue Receipts and Revenue Expenditure.

Budget 2019 will be presented before the Parliament by Finance Minister Nirmala Sitharaman. The Interim Budget was tabled by Piyush Goyal on February 1. Breaching a largely male bastion, Sitharaman is the first woman in 48 years since then prime minister Indira Gandhi to hold charge of the key ministry.

The three categories of Budget

The Union Budget comprises Capital Budget, Revenue Budget, Expenditure Budget

Capital Budget

The Capital Budget part of the Union Budget has accounts for capital payment and receipts of the government. Capital receipts include: i) Loans from the public; ii) Loans from RBI

Capital receipts are loans raised by the government from the public (which are called market loans), borrowings by the government from the Reserve Bank of India and

other parties through sale of treasury bills, loans received from foreign bodies and governments, and recoveries of loans granted by the Central government to state and Union Territory governments and other parties.

Capital payments include expenses incurred towards building long term assets and facilities like land, buildings, machinery, etc.

Revenue Budget

The Revenue Budget records all the revenue receipts and expenditure. If the revenue expense is more than that of receipts, it indicates that there is a revenue deficit. Revenue expenditure is for the normal running of government departments and various services, interest payments on debt, subsidies, etc. Revenue receipts are divided into tax and non-tax revenue. Tax revenues are made up of taxes such as income tax, corporate tax, excise, customs and other duties that the government levies.

In non-tax revenue, the government's sources are interest on loans and dividend on investments like PSUs, fees, and other receipts for services that it renders.

Expenditure Budget

The expenditure budget refers to the estimated expenditure of the government during a given financial year. It shows the capital and revenue disbursements of various ministries/departments and presents it under 'Plan' and Non Plan'. Expenditure Budget provides analysis of various types of expenditure. Demand for grants of the Central government is also a part of the Expenditure Budget.

Finance Minister Nirmala Sitharaman on Friday said that the country is well within its capacity to become a $5 dollar economy in the next five years.

Budget 2019 highlights: Here are the key takeaways from finance minister Nirmala Sitharaman's maiden Budget speech:

  • From $1.85 trillion in 2014, the economy has reached $2.7 trillion
  • We are well within our capacity to reach $5 trillion in the next few years
  • Economy will grow to become a $3 trillion economy in the current year itself
  • Between 2014 and 2019, we provided a rejuvenated centre-state dynamics, cooperative federalism, GST council and strident commitment to fiscal discipline
  • Several reforms would be undertaken to promote rental housing, current rental laws are archaic as they do not address lessor-lessee relationships fairly
  • Upfront incentives on purchase of electric vehicles, greater emphasis on affordable and eco-friendly public transport
  • Private players to play a significant role in railways
  • One Nation One Grid for for affordable power, propose to have gas and water grids also
  • Listing social enterprises and voluntary organisation a priority so they can raise capital
  • Bharat Mala 2.0 to focus on states to build their road networks
  • Village, poor and farmers are at the centre of all of this govt's programmes
  • Govt will invite suggestions for further opening up of FDI in aviation sector, media, animation AVGC and insurance sectors in consultation with all stakeholders. 100 per cent FDI will be permitted for insurance intermediaries
  • Railway infra would need an investment of 50 trillion between 2018 and 2030; PPP to be used to unleash faster development and delivery of passenger freight services
  • Local sourcing norms for FDI to be eased for single-brand retailing sector
  • Electronic Fundraising Platform, a social stock exchange, to be set up to list social enterprises and voluntary organizations working for social welfare objectives
  • FM Nirmala Sitharaman says Sebi has been asked to condier increasing minimum public shareholding criterion from 25 per cent to to 35 per cent
  • By 2022, every single rural family except those who are unwilling to take the connection, will have an electricity and a clean cooking facility
  • NRI portfolio investment route to be merged with foreign portfolio investment route
  • To harness India's space ability commercially, a public sector enterprise, New Space India Limited (NSIL) has been incorporated to tap the benefits of Isro
  • 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
  • Programmes exclusively for start-ups on DD channels
  • Railway station modernisation will be started this year
  • Aadhaar to NRIs who arrive in India with an Indian passport without waiting for 180 days
  • NPAs of commercial banks have reduced by Rs 1 trillion in last one year
  • PSU banks to get Rs 70,000 crore boost for credit improvement
  • Women SHG Interest Subvention Programme to be expanded to all districts in India
  • Propose to return regulatory authority over Housing Finance Companies from NHB to the RBI
  • Rs 1 lakh loan for women under interest subvention scheme
  • To popularise sports at all levels, National Sports Education Board for development of sportspersons to be set up under Khelo India
  • Pension for shopkeepers & retailers with turnover less than Rs. 1.5 crore to be launched under Pradhan Mantri Karma Yogi Maan Dhan Scheme
  • Rs 105,000 crore targeted from disinvestment in 2019-20
  • To resolve angel tax issue, start-ups and investors who file declarations will not be subject to scrutiny on valuation premiums
  • PAN and Aadhaar is proposed to be used interchangably. Aadhaar can be used by people to file income tax returns even without a PAN card
  • 2 per cent TDS on cash withdrawal exceeding from a bank account in a year to discourage cash payments in business transactions.
  • Customs duty on gold and precious metals raised to 12 per cent
  • Special additional excise duty of Rs 1/litre on petrol and diesel for road & infrastructure
  • FY 20 fiscal deficit target cut to 3.3 per cent from 3.4 per cent.

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