Highlights of the Union Budget 2019-20

10-point Vision for the decade:
1. Building Team India with Jan Bhagidari: Minimum Government Maximum Governance.
2. Achieving green Mother Earth and Blue Skies through a pollution-free India.
3. Making Digital India reach every sector of the economy.
4. Launching Gaganyan, Chandrayan, other Space and Satellite programmes.
5. Building physical and social infrastructure.
6. Water, water management, clean rivers.
7. Blue Economy.
According to the World Bank, the blue economy is the "sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of ocean ecosystem." 


8. Self-sufficiency and export of food-grains, pulses, oilseeds, fruits and vegetables.
9. Achieving a healthy society via Ayushman Bharat, well-nourished women & children, safety of citizens.
10. Emphasis on MSMEs, Start-ups, defence manufacturing, automobiles, electronics, fabs and batteries, and medical devices under Make in India.


Achievements during 2014-19:
• 1 trillion dollar added to Indian economy over last 5 years (compared to over 55 years taken to reach the first trillion dollar).
• India is now the 6th largest economy in the world, compared to 11th largest five years ago.
• Indian economy is globally the 3rd largest in Purchasing Power Parity (PPP)
• Structural reforms in indirect taxation, bankruptcy and real estate carried out.
• Average amount spent on food security per year almost doubled during 2014-19 compared to 2009-14.
• Patents issued more than trebled in 2017-18 as against the number in 2014.


Towards a 5 Trillion Dollar Economy:
Indian economy to become a 3 trillion-dollar economy in the current year.


What needs to be done to make India a 5 trillion dollar economy? What has the government proposed?
1. To promote digital economy:
TDS of 2% on cash withdrawal exceeding Rs. 1 crore in a year from a bank account.
Business establishments with annual turnover more than Rs. 50 crore shall offer low cost digital modes of payment to their customers and no charges or Merchant Discount Rate shall be imposed on customers as well as merchants.
2. Banking and Financial Sector:
Present state:
• NPAs of commercial banks reduced by over Rs. 1 lakh crore over the last year.
• Record recovery of over Rs. 4 lakh crore effected over the last four years.
• Provision coverage ratio at its highest in seven years. 
• Domestic credit growth increased to 13.8%.
Proposals:
PSBs: Rs. 70,000 crore proposed to be provided to PSBs to boost credit; Steps to be initiated to empower accountholders to have control over deposit of cash by others in their accounts. 
NBFCs: Proposals for strengthening the regulatory authority of RBI over NBFCs to be placed in the Finance Bill; Requirement of creating a Debenture Redemption Reserve will be done away with to allow NBFCs to raise funds in public issues; Steps to allow all NBFCs to directly participate on the TReDS platform; Return of regulatory authority from NHB to RBI proposed, over the housing finance sector; Steps to be taken to separate the NPS Trust from PFRDA; Reduction in Net Owned Fund requirement from Rs. 5,000 crore to Rs. 1,000 crore  proposed.
CPSEs: Target of Rs. 1, 05,000 crore of disinvestment receipts set for the FY 2019-20. Government to offer an investment option in ETFs on the lines of Equity Linked Savings Scheme (ELSS).


3. women empowerment:
Approach shift from women-centric-policy making to women-led initiatives and movements.
Women SHG interest subvention program proposed to be expanded to all districts; Overdraft of Rs. 5,000 to be allowed for every verified women SHG member having a Jan Dhan Bank Account; One woman per SHG to be eligible for a loan up to Rs. 1 lakh under MUDRA Scheme.


4. Youth:
New National Education Policy to be brought.
National Research Foundation (NRF) proposed.
Rs. 400 crore provided for “World Class Institutions”, for FY 2019-20, more than three times the revised estimates for the previous year.
‘Study in India’ proposed to bring foreign students to study in Indian higher educational institutions.
Draft legislation to set up Higher Education Commission of India (HECI), to be presented.
Khelo India Scheme to be expanded with all necessary financial support. 
National Sports Education Board for development of sportspersons to be set up under Khelo India, to popularize sports at all levels.
Stand-Up India Scheme to be continued for the period of 2020-25. The Banks to provide financial assistance for demand based businesses.


5. Rural India:
1. Electricity and clean cooking facility to all willing rural families by 2022.
2. A robust fisheries management framework through Pradhan Mantri Matsya Sampada Yojana (PMMSY) to be established by the Department of Fisheries.
3. Target of connecting the eligible and feasible habitations advanced from 2022 to 2019 with 97% of such habitations already being provided with all weather connectivity.
4. 1,25,000 kilometers of road length to be upgraded over the next five years under PMGSY III.
5. Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship’ (ASPIRE) consolidated.
6. 10,000 new Farmer Producer Organizations to be formed, to ensure economies of scale for farmers.
7. Zero Budget Farming in which few states’ farmers are already being trained to be replicated in other states.
8. Jal Jeevan Mission to achieve Har Ghar Jal (piped water supply) to all rural households by 2024.
9. Compensatory Afforestation Fund Management and Planning Authority (CAMPA) fund can be used Jal Shakti Abhiyan.
10. Universal Obligation Fund under a PPP arrangement to be utilized for speeding up Bharat-Net.


6. Misc:
Proposal to consider issuing Aadhaar Card for NRIs with Indian Passports on their arrival without waiting for 180 days.
Revamp of Indian Development Assistance Scheme (IDEAS) proposed.
Direct tax incentives proposed for an International Financial Services Centre (IFSC).
Securities Transaction Tax (STT) restricted only to the difference between settlement and strike price in case of exercise of options.
Capital gains exemptions from sale of residential house for investment in start-ups extended till FY21. 
‘Angel tax’ issue resolved- start-ups and investors filing requisite declarations and providing information in their returns not to be subjected to any kind of scrutiny in respect of valuations of share premiums.
Funds raised by start-ups to not require scrutiny from Income Tax Department.
Tax rate reduced to 25% for companies with annual turnover up to Rs. 400 crore.
Surcharge increased on individuals having taxable income from Rs. 2 crore to Rs. 5 crore and Rs. 5 crore and above.  
Government to organize an annual Global Investors Meet in India, using National Infrastructure Investment Fund (NIIF) as an anchor to get all three sets of global players (pension, insurance and sovereign wealth funds).
Statutory limit for FPI investment in a company is proposed to be increased from 24% to sectoral foreign investment limit. FPIs to be permitted to subscribe to listed debt securities issued by ReITs and InvITs.
NRI-Portfolio Investment Scheme Route is proposed to be merged with the Foreign Portfolio Investment Route.
Credit Guarantee Enhancement Corporation to be set up in 2019-2020.
Tax rates for individuals having taxable income from Rs. 2 cr – 5 cr and Rs. 5 cr & above to be increased by around 3 % and 7 % respectively.
Scheme of Fund for Upgradation and Regeneration of Traditional Industries (SFURTI) aims to set up more Common Facility Centres for generating sustained employment opportunities.


7. New Space India Limited (NSIL):
It is a Public Sector Enterprise incorporated as a new commercial arm of Department of Space to tap the benefits of the Research & Development carried out by ISRO. 
Functions: The Company will spearhead commercialization of various space products including production of launch vehicles, transfer to technologies and marketing of space products.


In a nutshell, India needs:
1. Simplification of procedures.
2. Incentivizing performance.
3. Red-tape reduction.
4. Making the best use of technology.
5. Accelerating mega programmes and services initiated and delivered so far.


Background:
What is Budget?
The Annual Financial Statement or the Statement of the Estimated Receipts and Expenditure of the Government of India in respect of each financial year is popularly known as the Budget.


Presentation of the budget:
The Budget is presented to Lok Sabha on such day as the President may direct. Immediately after the presentation of the Budget, the following 3 statements under the Fiscal Responsibility and Budget Management Act, 2003 are also laid on the Table of Lok Sabha:
1. The Medium Term Fiscal Policy Statement.
2. The Fiscal Policy Strategy Statement.
3. The Macro Economic Framework Statement.


General Discussion on the Budget:
No discussion on Budget takes place on the day it is presented to the House.
Budgets are discussed in two stages—the General Discussion followed by detailed discussion and voting on the demands for grants.


Consideration of the Demands for Grants by Departmentally Related Standing Committees of Parliament:
With the creation of Departmentally Related Standing Committees of Parliament in 1993, the Demands for Grants of all the Ministries/Departments are required to be considered by these Committees. After the General Discussion on the Budget is over, the House is adjourned for a fixed period. During this period, the Demands for Grants of the Ministries/ Departments are considered by the Committees. These Committees are required to make their reports to the House within specified period without asking for more time and make separate report on the Demands for Grants of each Ministry.


Discussion on Demands for Grants:
The demands for grants are presented to Lok Sabha along with the Annual Financial Statement. These are not generally moved in the House by the Minister concerned. The demands are assumed to have been moved and are proposed from the Chair to save the time of the House. After the reports of the Standing Committees are presented to the House, the House proceeds to the discussion and voting on Demands for Grants, Ministry-wise. The scope of discussion at this stage is confined to a matter which is under the administrative control of the Ministry and to each head of the demand as is put to the vote of the House. It is open to members to disapprove a policy pursued by a particular Ministry or to suggest measure for economy in the administration of that Ministry or to focus attention of the Ministry to specific local grievances. At this stage, cut motions can be moved to reduce any demand for grant but no amendments to a motion seeking to reduce any demand is permissible.


Cut Motions:
The motions to reduce the amounts of demands for grants are called ‘Cut Motions’. The object of a cut motion is to draw the attention of the House to the matter specified therein.


Cut Motions can be classified into three categories:
1. Disapproval of Policy Cut.
2. Economy Cut.
3. Token Cut.
  
The Speaker decides whether a cut motion is or is not admissible and may disallow any cut motion when in his opinion it is an abuse of the right of moving cut motions or is calculated to obstruct or prejudicially affect the procedure of the House or is in contravention of the Rules of Procedure of the House.


Guillotine:
On the last of the allotted days for the discussion and voting on demands for grants, at the appointed time the Speaker puts every question necessary to dispose of all the outstanding matters in connection with the demands for grants. This is known as guillotine. The guillotine concludes the discussion on demands for grants.


Appropriation Bill:
After the demands for grants have been passed by the House, a Bill to provide for the appropriation out of the Consolidated Fund of India of all moneys required to meet the grants and the expenditure charged on the Consolidated Fund of India is introduced, considered and passed. The introduction of such Bill cannot be opposed. The scope of discussion is limited to matters of public importance or administrative policy implied in the grants covered by the Bill and which have not already been raised during the discussion on demands for grants.
The Speaker may require members desiring to take part in the discussion to give advance intimation of the specific points they intend to raise and may withhold permission for raising such of the points as in his opinion appear to be repetition of the matters discussed on a demand for grant.
No amendment can be proposed to an Appropriation Bill which will have the effect of varying the amount or altering the destination of any grant so made or of varying the amount of any expenditure charged on the Consolidated Fund of India, and the decision of the Speaker as to whether such an amendment is admissible is final. An amendment to an Appropriation Bill for omission of a demand voted by the House is out of order.
In other respects, the procedure in respect of an Appropriation Bill is the same as in respect of other Money Bills.


Finance Bill:
“Finance Bill” means a Bill ordinarily introduced every year to give effect to the financial proposals of the Government of India for the next following financial year and includes a Bill to give effect to supplementary financial proposals for any period.
The Finance Bill is introduced immediately after the presentation of the Budget. The introduction of the Bill cannot be opposed. The Appropriation Bills and Finance Bills may be introduced without prior circulation of copies to members.
The Finance Bill usually contains a declaration under the Provisional Collection of Taxes Act, 1931, by which the declared provisions of the Bill relating to imposition or increase in duties of customs or excise come into force immediately on the expiry of the day on which the Bill is introduced. In view of such provisions and the provision of Act of 1931, the Finance Bill has to be passed by Parliament and assented to by the President before the expiry of the seventy-fifth day after the day on which it was introduced.
As the Finance Bill contains taxation proposals, it is considered and passed by the Lok Sabha only after the Demands for Grants have been voted and the total expenditure is known. The scope of discussion on the Finance Bill is vast and members can discuss any action of the Government of India. The whole administration comes under review.
The procedure in respect of Finance Bill is the same as in the case of other Money Bills.