This year Union Government has released the Interim Budget for the year 2019-20 rather than a full Budget. Before going into the details of the Budget, first we need to understand the difference between Interim Budget, Vote on Account and Full Budget.
- It is made by the government during last year of its term.
- It is the complete set of accounts, includes both expenditure and receipts.
- No big proposals.
- No new service, no Financial Bill & no Economic Survey.
Vote on Account
- It deals only with the expenditure side.
- Also, it is valid only for 2 months and can be further extended for 2 months.
- It basically cannot alter direct taxes.
- Formal matter, passed by Lok Sabha without discussion.
- Sum of the grant = 1/6th of the estimated for the entire year under various demands for grants.
- It deals with both expenditure and revenue side.
- It is valid for 12 month (a financial year).
- Also it is passed only after discussions and voting on demand for grants.
- Article 112 of the Constitution.
- Presented by means of the Financial Bill and Appropriation Bill, has to be passed by the House before it can come into effect on February 1.
INTERIM BUDGET 2019-20
- FISCAL DEFICIT
- It is pegged at 3.4% of GDP.
- The Macro-Economic Framework Statement says that the Revenue deficit in 2018-19 was budgeted at Rs. 4,16.034 crore, 2.2% of GDP.
- The Current Account Deficit widened to 2.7% of GDP in first half of 2018-19 from 1.9% of GDP in 2017-18, mainly on account of higher trade deficit arising from higher petroleum, oil and lubricants imports.
- The main focus of the coming year will be to improve the expenditure efficiency and improve the tax collections to ensure that the economy moves back to the fiscal deficit path as mentioned in the Fiscal Responsibility & Budget Management (FRBM) Act.
NOTE – The revenue and fiscal deficit may exceed the targets specified in Rules only on grounds of national security or national calamity or such other exceptional grounds as the Central Government may specify.
TAX EXEMPTION OR TAX REBATE UNDER INTERIM BUDGET 2019-20
In the Budget 2019-20, the maximum amount of tax rebate under section 87A of the Income Tax Act has been proposed to increase to Rs. 12,500 from the existing Rs. 2,500. This proposed tax rebate will be admissible to taxpayers having total income of Rs. 5 lakh instead of current income of Rs. 3.5 lakh.
INTERIM BUDGET 2019-20: PROVISION FOR BLACK MONEY
- The government during the last four and a half year in the form of Black Money Law, the Fugitive Criminal Offenders Act, and Demonetization, have brought undisclosed income of about Rs. 1,30,000 crore to tax.
- FUGITIVE ECONOMIC OFFENDER (FEO) ACT 2018
- It defines fugitive economic offender as any individual against whom warrant for arrest in relation to economic offence has been issued and person has left the country and refuses to return to India to face criminal prosecution.
- The proposed bill will be applicable in cases where the value of offences is over 100 crore.
- It will allow Financial Intelligence Unit, the premier technical snoop wing under the finance ministry, to file an application for declaration of fugitive economic offender for confiscation of their assets.
- It establishes Special courts under the Prevention of Money-laundering Act(PMLA), 2002 to declare a person as FEO. The court will appoint ‘administrator’ to oversee confiscated property.
- It empowers director or deputy director (appointed under PMLA, 2002) to attach any property mentioned in application with permission of special court.
- The bill allows any civil court or tribunal to disallow person declared FEO, from filing or defending any civil claim. Further, any company or limited liability partnership where FEO is majority shareholder, then promoter, or a key managerial person (such as MD or CEO) will also be barred from filing or defending civil claims.
- The director or deputy director will have the power of civil court.
INTERIM BUDGET 2019-20: FOREIGN DIRECT INVESTMENT
- A stage for high growth in decades to come has now been set, after a wave of next generation path breaking structural reforms over the last five years, including introduction of GST and other taxation reforms.
- We are the fastest growing major economy in the world with an annual average GDP growth during last five years higher than that achieved by any Govt. since economic reforms began in 1991.
- From being the 11th largest economy in the world in 2013-14, we are today the 6th largest in the world.
INTERIM BUDGET 2019-20: BANKING SECTOR
- The Insolvency and Bankruptcy Code has institutionalized a resolution-friendly mechanism and nearly Rs. 3 lakh crores has been recovered by Banks and creditors.
- High stressed non-performing assets (NPAs) amounted to Rs. 5.4 lakh crore in 2014. Since 2015, numerous Asset Quality Reviews and inspections were carried out, and the 4Rs approach of recognition, resolution, re-capitalization and reforms has been followed.
- INSOLVENCY AND BANKRUPTCY CODE (SECOND AMENDMENT) BILL 2018
- The bill seeks to replace the Insolvency and Bankruptcy Code (Amendment) ordinance 2018.
- The bill recognizes home buyers as financial creditors in real estate project and giving them due representation in Committee of Creditors (CoC), thus providing significant relief to the home buyers.
- The home buyers will be able to participate in decision-making process when developers are declared bankrupt under IBC, 2016.
- The bill also proposes to reduce minimum voting threshold for CoC to 66%, from 75% for key decisions.
- The bill also benefits MSME sector from IBC. It allows a promoter of MSME to bid for their own enterprise undergoing the insolvency resolution process as long as they are not willful defaulters.
INTERIM BUDGET 2019-20: STEPS AGAINST CORRUPTION
- Listing out the measures undertaken by the Govt. to bring about a New Era of transparency in Real Estate Sector, the Finance Minister mentioned about the Real Estate (Regulation and Development) Act, 2016 (RERA) and Benami Transaction (Prohibition) Act, 2016.
- The Fugitive Economic Offenders Act, 2018 is helping to confiscate and dispose off the assets of economic offenders, who escape the jurisdiction of the country.
- Highlighting the achievements of Swachhata Mission launched by the present govt. led by the PM Narendra Modi the country achieved nearly 98% rural sanitation coverage with as many as 5.45 lakh villages being declared open defecation free.
- EWS RESERVATION
- To ensure 10% reservation in educational institutions and Govt. jobs for economically weaker sections, the Govt. will provide for 25% extra seats i.e., around 2 lakhs, while maintaining the existing reservation for SC/ST/OBC.
- FOOD GRAINS FOR POOR
- To provide food grains at affordable prices to the poor and middle classes, about Rs. 1,70,000 crore was spent in 2018-19. Rs. 60,000 crore has been allocated for MGNREGA in the Budget Estimate of 2019-20.
NTERIM BUDGET 2019-20: ARICULTURE SECTOR
- Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)
- To extend direct income support at the rate of Rs. 6,000 per year to farmer families, having cultivable land upto 2 hactares is announced.
- The income support will be transferred directly into the bank account of the beneficiary farmers, in three equal installments of Rs. 2000 each. This programme will be funded by Government of India.
- Around 12 crore small and marginal farmer families are expected to benefit from this. The programme would be made effective from 1st December 2018 and the first installment for the period upto 31st March 2019 would be paid during this year itself.
- Rashtriya Gokul Mission
- Allocation of Rs. 750 crore this year.
- Setting up of ‘Rashtriya Kamdhenu Aayog’ to upscale sustainable genetic upgradation of cow resources and to enhance production and productivity of cows has also been announced.
- The mission is implemented by Ministry of Agriculture & Farmers Welfare.
- The scheme comprises of 2 components namely National Programme for Bovine Breeding (NPBB) and National Mission on Bovine Productivity (NMBP).
- Development and conservation of indigenous breeds.
- Undertaking breed improvement programmes for indigenous cattle breeds.
- Enhancing milk production and productivity.
- Upgrading nondescript cattle using elite indigenous breeds like Gir, Sahiwal, Rathi, Deoni, Tharparkar, Red Sindhi.
- Distributing disease free high genetic merit bulls for natural service.
- Crop Loans
- When natural calamities strike, farmers are generally unable to repay their crop loans. “Presently, the crop loans are rescheduled for such affected farmers and they get benefit of interest subvention of 2% only for the first year of the rescheduled loan.“
- National Disaster Relief Fund (NDRF)
- All farmers affected by severe natural calamities, where assistance is provided from NDRF, will be provided the benefit of interest subvention of 2% and prompt repayment incentive of 3% for the entire period of reschedulement of their loans.”
- DEPARTMENT OF FISHERIES
- The govt. has decided to create a Department of Fisheries to provide sustained and focused attention towards development of fisheries sector.
- “In the last Budget, Govt. had announced the facility of extension of Kisan Credit Card Scheme to Animal Husbandary and Fisheries farmers.
- Now, propose to provide the benefit of 2% interest subvention to the farmers pursuing the activities of animal husbandry and fisheries, who avail loan through Kisan Credit Card. Further, in case of timely repayment of loan, they will also get an additional 3% interest subvention.”
INTERIM BUDGET 2019-20: DEFENCE SECTOR
- Defence Budget will be crossing Rs. 3,00,000 crore for the first time in 2019-20.
- The issue of One Rank One Pension (OROP) which was pending for the last forty years has ben resolved.
- The Govt. also announced substantial hike in the Military Service Pay (MSP) of all service personnel and special allowances given to Naval and Air Force personnel deployed in high risk duties.
INTERIM BUDGET 2019-20: ARTIFICIAL INTELLIGENCE
- It is announced that a National Artificial Intelligence Portal will also be developed soon as a part of the National Programme on ‘Artificial Intelligence’.
- India has become the second largest hub of start-ups. In order to take benefits of AI and related technologies to the people, a national programme on AI has been envisaged by our Govt. 9 priority areas have been identified.
INTERIM BUDGET 2019-20: COMMON SERVICE CENTRES (CSCS)
- India having emerged as the world leader in the consumption of mobile data, the Govt. now aims to widen its impact by reaching out to the interior and rural areas.
- JAN DHAN-AADHAAR-MOBILE (JAM)
- The JAM and Direct Benefit Transfer acted as game changers.
- Aadhaar is now near universally implemented. This has helped ensure the poor and middle class receive the benefits of Govt. schemes directly in their bank accounts by eliminating middlemen.
RAILWAY BUDGET AND INFRASTRUCTURE
- The Railways has been allocated Rs. 64,587 crore and the overall capital expenditure programme is of Rs. 1,58,658 crore.
- VANDE BHARAT EXPRESS OR TRAIN 18
- The first indigenously developed and manufactured semi high-speed train will give the Indian passengers world class experience with speed, service and safety.
- INFRA IN NORTH EAST REGION
- The number of operational airports has crossed 100 with the commissioning of the Pakyong airport in Sikkim. India is the fastest highway developer in the world with 27 kms of highways built each day.
- KEY DEVELOPMENTS
- Projects stuck for decades like the Eastern Peripheral Highway around Delhi or The Bogibeel rail-cum-road bridge in Assam and Arunachal Pradesh have been completed.
- The flagship programme of Sagarmala along the coastal areas of the country will develop ports for faster handling of imports and exports cargo. For the first time, container freight movement has started on inland waterways from Kolkata to Varanasi.
- Arunachal Pradesh came on the air map recently and Meghalaya, Tripura and Mizoram have come on India’s rail map for the first time.
- Allocation for the North-East Areas is being proposed to be increased b 21% to Rs. 58,166 crore in 2019-20 BE over 2018-19 BE.
- Announcing an allocation of Rs.60,000 crore for MGNREGA for Budget-Estimates 2019-20, the Finance Minister said that additional allocations will be made, if required.
- Pradhan Mantri Gram Sadak Yojana (PMGSY) is being allocated Rs. 19,000 crore in BE 2019-20 as against Rs. 15,500 crore in RE 2018-19. During the period 2014-18, a total number of 1.53 crore houses have been built under the PMAY.
- By March 2019, all households will be provided with electricity connection. Till now, 143 crore LED bulbs have been provided in a mission mode which has resulted in saving of Rs. 50,000 crore for the poor and middle class.
- MSMES & OTHER SMALL TRADERS
- A scheme of sanctioning loans up to Rs. 1 crore in 59 minutes has been launched recently.
- GST-registered SME units will get 2% interest rebate on an incremental loan of Rs. 1 crore.
- The requirement of sourcing from SMEs by Govt. enterprises has been increased to 25%.
- Businesses having an annual turnover less than Rs. 5 crore comprising over 90% of GST payers will soon be allowed to file quarterly return.
- GST exemption for small traders, manufacturers and service providers doubled from Rs 20 lakh to Rs 40 lakh.
- Small businesses having turnover up to Rs. 1.5 crore have been given an attractive composition scheme where in they pay only 1% flat rate and have to file one annual return only.
- To promote the “MAKE IN INDIA” initiative, the Govt. has abolished duties on 36 capital goods.
- The Govt. e-Marketplace (GeM) platform is now being extended to all central public sector enterprises. Transactions of over Rs. 17,500 crore have taken place, resulting in average savings of 25-35%.
- The tax rate for companies with turnover of up to Rs. 250 crore, covering almost 99% of the companies, was reduced to 25% which was also applicable to new manufacturing companies without any harm.
- DEPARTMENT OF PROMOTION OF INDUSTRIES & INTERNAL TRADE
- The Department of Industrial Policy and Promotion will now be renamed as the Department for Promotion of Industries and Internal Trade.
- The GeM, created by the present Govt. two years ago, resulted in average savings of 25-28% and the platform will now be extended to all CPSEs.
- MUDRA YOJANA
- More than 70% of the beneficiaries of Pradhan Mantri Mudra Yojana are women who are getting affordable and collateral-free loans to start their own businesses.
- The scheme was launched in 2015, specially designed to support the small enterprises or micro-enterprises. The Govt. through this scheme provides loans up to Rs. 10,00,000/- to small businesses.
- These Mudra loans are given by all types of banks that include the Nationalized banks, commercial banks, cooperative banks, small finance banks, RRB’s, MIF’s, NBFCs.
- Types of MUDRA loans:
- SISHU : Loans amount covers up to Rs. 50,000/-
- KISHORE : Loans amount start at above Rs. 50000 and covers up to Rs. 5,00,000/-.
- TARUN : Loans amount starts at Rs. 5,00,000/- and covers up to Rs. 10,00,000/-.
- Types of MUDRA loans:
UNORGANIZED & ORGANIZED SECTORS
- UNORGANIZED SECTOR
- The Govt. proposes to launch a mega pension yojana namely ‘Pradhan Mantri Shram-Yogi Maandhan’ for the unorganised sector workers with monthly income upto Rs. 15,000.
- This pension yojana shall provide them an assured monthly pension of Rs. 3,000 from the age of 60 years on a monthly contribution of a small affordable amount during their working age.
- An unorganized sector worker joining pension yojana at age of 29 years will have to contribute only Rs.100 per month till the age of 60 years. A worker joining the pension yojana at 18 years, will have to contribute as little as Rs. 55 per month only.
- MINIMUM WAGES
- The minimum wages of labours of all classes have been increased by 42%, which is the highest increase so far. The high growth and formalisation of the economy has led to the expansion of employment opportunities as shown in EPFO membership, which has increased by nearly 2 crore in 2 years reflecting formalization of the economy and job creations.
- The 7th Pay Commission recommendations were implemented and New Pension Scheme (NPS) has been liberalized. The Govt.’s contribution in NPS had been increased 10% to 14%. The minimum pension for all labours has been fixed at Rs. 1,000 per month.
- In case of the death of a labour during the service, the EPFO contribution has been increased from Rs. 2.5 lakh to Rs. 6 lakh. The honorarium of all classes of labours under Anganwadi and Asha scheme has been increased by about 50%.
INTERIM BUDGET 2019-20: HEALTH
- AYUSHMAN BHARAT- NATIONAL HEALTH PROTECTION MISSION (AB-NHPM):
- It aims to target over 10 crore families belonging to poor and vulnerable population based on SECC 2011 database.
- There will be no cap on family size and age in the scheme. The scheme integrates two on-going centrally sponsored schemes viz. Rashtriya Swasthya Bima Yojana (RSBY) and Senior Citizen Health Insurance Scheme (SCHIS).
- It includes pre and post-hospitalization expenses.
- Also, it will cover all pre-existing conditions from beginning of the policy.
- It will also pay defined transport allowance per hospitalization to the beneficiary.
- The scheme allows the beneficiary to take cashless benefits from any public or private empanelled hospitals across the country. The payment for treatment will be done on package rate which will be defined by Govt in advance basis. The package rates will include all the costs associated with treatment.
- Allocation for Integrated Child Development Scheme (ICDS) is being increased from Rs. 23,357 crore in RE 2018-19 to Rs. 27,584 crore in BE 2019-20.
- JAN AUSHADHI SCHEME:
- The scheme is a direct market intervention scheme of Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers.
- Its aim is to make available quality generic medicines to all at affordable prices through Jan Aushadhi Store (JAS) opened in each district of the states.
- It was first launched in 2008 to provide quality medicines at affordable prices to the economically weaker sections of the society.
- The first JAS was opened at Amritsar Civil Hospital in 2008.
- Its mission was to create demand for generic medicines ( Unbranded medicines which are identical or bioequivalent to the branded ones and have the same efficacy in terms of therapeutic value to its branded equivalent. These medicines are available at a much cheaper price than the branded medicines).
INTERIM BUDGET 2019-20: WOMEN EMPOWERMENT
- An amount of Rs 1330 crore has been provided in the Interim Budget for 2019-20 for the Mission for Protection and Empowerment of Women.
- The emphasis of the Govt. has been to move from “women development” to “women led development”.
- UJJAWALA YOJANA
- Launched in 2016 with a tagline of Swachh Indhan, Behtar Jeevan.
- It aims at providing clean-cooking fuel to poor households.
- Under this scheme, LPG connections will be provided to BPL families with the support of Rs. 1600 per connection.
- The connections will be issued in the name of the women of the household.
- The Govt. has also decided to cover the following categories under the scheme:
- All SC/STs households beneficiaries of PMAY (Gramin);
- Antodaya Anna Yojana (AAY);
- Forest dwellers;
- Tea & Ex-Tea Garden Tribes;
- Most Backward Classes (MBC);
- People residing in Islands;
- People residing in river islands.
- PRADHAN MANTRI MATRU VANDANA YOJANA
- The initiatives of Maternity leave of 26 weeks and Pradhan Mantri Matru Vandan Yojana for pregnant women have provided financial support to women while empowering them to participate in work.
- The maternity benefits under this scheme are available to all Pregnant Women and Lactating Mothers except those in regular employment with the central govt./state govt/PSU or those who are in receipt of similar benefits under any law for the time being in force,
- SCHEDULED CASTES AND SCHEDULED TRIBES
- A substantial increase is proposed in the allocation for welfare of the SC and STs.
- The allocation of Rs. 56,619 crore made in 2018-19 for the SC, further increased to Rs 62,474 crore in RE is proposed to be enhanced to Rs. 76,801 crore in BE for 2019-20, an increase of 35.6% over the BE 2018-19.
- For the STs also, proposed allocation in 2019-20 BE is Rs. 50,086 crore as against Rs. 39,135 crore in BE 2018-19, an increase of 28%.
- DE-NOTIFIED, NOMADIC AND SEMI-NOMADIC COMMUNITIES
- The Govt will also set up a Welfare Development Board under the Ministry of Social Justice and Empowerment specifically for the purpose of implementing welfare and development programmes for De-notified, Nomadic and Semi-Nomadic communities.
- The Nomadic and Semi-Nomadic communities move from place to place in search of a livelihood. The Renke Commission and the Idate Commission have done commendable work to identify and list these communities.