Finance Minister Nirmala Sitharaman presents the Union Budget 2019-20 in Parliament on Friday; becomes the only second women in the history of independent India to present the Union Budget.

The usual practice of keeping the budget documents in a suitcase was replaced by a four-fold red cloth. Finance Minister Nirmala Sithraman in her first Budget speech made key proposals and announcements.

Here are the key takeaways from the Budget speech:

For economy

  • Targets to become a $3 trillion economy in FY20, $5 trillion in a few years
  • Proposes changes to kick-start domestic and foreign investment
  • Will create blueprint for gas, water grids and regional airports
  • Govt proposes to expand Swachch Bharat to include solid waste management in every village
  • Setting up enhanced disinvestment target of Rs 1,05,000 crore in FY20 as against Rs 90,000 crore set in the Interim Budget
  • A new series of coins of Re 1, 2, 5, 10 and 20 easily to be made available for public use shortly
  • Proposes investment linked tax benefit for manufacture of products like lithium batteries and solar chargers
  • Govt will start raising part of its gross borrowing programme in external markets in external currencies
  • Import of defence equipment is being exempted from basic customs duty
  • To set up digital repository to preserve tribal heritage

Labour reforms

  • Govt to streamline multiple labour laws into a set of four labour codes
  • To focus on training new age skills like AI, robotics, 3D printing
  • To liberalise FDI in aviation, media, animation and insurance intermediaries
  • To implement enabling measures to boost International Financial Service Centres (IFSCs)
  • To set up a Credit Guarantee Enhancement Corporation
  • To initiate steps for electronic fund raising programme for listing of social enterprises, voluntary organisations
  • Considering whether govt holding can go below 51 percent in certain CPSEs on case-to-case basis
  • To hike statutory limits for foreign investments in some companies
  • Expert committee to be set up to make recommendations on infrastructure finance
  • With a view of incentivising investment in GIFT City, govt proposes several tax benefits

Market reforms

  • Asks SEBI to evaluate hiking minimum public shareholding to 25 percent from 35 percent
  • Government will work with exchanges to allow AA bonds to be used as collateral
  • Proposes rationalising and streamlining of KYC (know your customer) norms for Foreign Portfolio Investors (FPIs) to make it investor-friendly
  • NRI portfolio route to be merged with FPI for seamless investment in stock markets
  • Credit Guarantee Enhancement Corporation will be set up in 2019-20, action plan to deepen markets for long-term bonds with specific focus on infra sector to be put in place
  • Will take up measures to make RBI and SEBI depositories inter-operable
  • To allow FPIs/NRIs to subscribe to listed debt papers of REITs and InvITs
  • To bring ETFs in line with equity-linked savings schemes of mutual funds to encourage retail investors
  • Propose to give relief to Securities Transaction Tax (STT) on exercise of options will be cut to only profit

Banks

  • State-run banks to get Rs 70,000 crore capital to boost credit
  • To bring out a remedy against cash being deposited without knowledge of bank account holders

NBFCs

  • Fundamentally sound NBFCs to keep getting funding from banks and mutual funds
  • To allow FIIs and FPIs investment in debt securities issued by NBFCs
  • Requirement of Debenture Reservation Reserve to be done away with for NBFCs
  • One-time six-month partial credit guarantee to be given to PSU banks for purchase of high-rated pooled assets of financially sound NBFCs amounting to Rs 1 lakh crore in FY20

Agriculture

  • Govt to invest widely in agriculture infrastructure
  • Support private entrepreneurship in value addition in agriculture
  • Proposes Pradhan Mantri Matsya Sampada Yojana to address critical infrastructure gap in fisheries sector

Transportation

  • To carry out comprehensive restructuring of National Highway programme
  • Cargo volume on Ganges to increase four times over the next four years
  • In second phase of Bharat Mala project, states will be helped to develop roadways
  • 1,25,000 km of roads will be upgraded under Pradhan Gram Sadak Yojana under Phase III at estimated cost of Rs 80,250 crore

Aviation

  • Time right for India to enter into aircraft financing and leasing
  • Will create congenial atmosphere for development of MRO services
  • To harness India’s space ability commercially, New Space India (NSIL) has been incorporated to tap the benefits of ISRO
  • Will re-initiate privatisation of Air India

Power

  • Package for power sector tariff and structural reforms to be unveiled soon

Retail

  • Local sourcing norms to be eased for single-brand retail FDI
  • No merchant discount rate (MDR) charges on digital transaction made at big establishments having annual turnover of more than Rs 50 crore

Insurance

  • Proposes to reduce net owned fund requirements to Rs 1,000 crore for onshoring of international insurance companies

Real estate

  • RBI to get regulation authority of housing finance sector
  • Will finalise a model tenancy law and circulate to states; and propose steps for rental housing
  • Proposes setting up 1.95 crore houses under Pradhan Mantari Awas Yojna (Rural)
  • Offers additional tax deduction of Rs 1.50 lakh on interest paid on home loans taken up to March 2020

MSMEs

  • To extend pension benefit to three crore retail traders with an annual turnover less than Rs 1.5 crore under Pradhan Mantri Karam Yogi Man Dan Scheme
  • Centre will create a payment platform for MSMEs for payment of bills
  • 100 new clusters will be set up in 2019-20 to enable 50,000 artisans to come into the economic value chain
  • To launch mission to integrate traditional artisans and creative persons with global market; to obtain GI/patents for them
  • Will set up 10,000 new farmer producer organisations
  • To start television programme exclusively for startups
  • Proposes to expand self-help groups to all districts; one woman in every SHG to get a loan up to Rs 1 lakh under Mudra Yojana
  • Startups who provide details in returns will have no scrutiny in respect of valuation of share premium
  • Period of exemption from capital gains from sale of startups extended
  • Startups will not be required to justify fair market value of shares issued to investors in Category II Alternative Investment Funds

Railways

  • Railways to be encouraged to invest more in suburban rail network via special purpose vehicles (SPVs) and enhance metro rail network through public-private partnerships
  • Railway station modernisation programme will be launched this year

Education

  • Will bring in new education policy to propose changes in school, higher education
  • Propose to set up a national research foundation to fund, coordinate and to promote research in the country
  • National Research Foundation will assimilate research grants by ministries
  • A Gandhi-pedia is being developed to sensitise youth about Mahatma Gandhi’s ideas
  • A draft legislation for higher education commission of India to be presented
  • Proposes Study in India programme to attract foreign students
  • National Sports Education Board to be set up under Khelo India scheme
  • Allocate Rs 400 crore for world-class higher education institutions in FY20
  • 5 percent customs duty imposed on imported books

 For NRIs

  • Aadhaar cards to be issued to non-residents Indians with Indian passports after arrival in India without waiting for 180 days

Personal taxation

  • NPS Trust will be separated from Pension Fund Regulatory and Development Authority (PFRDA)
  • PAN and Aadhaar made interchangeable, allowing those who do not have PAN to file return
  • Pre-filled tax returns to contain information from salaries, bank interest, capital gain and dividend income to be made available
  • Surcharge on individuals having taxable income of Rs 2 crore to Rs 5 crore, and Rs 5 crore and more raised

Tourism

  • To build 17 iconic sites to encourage arrival of tourists in India

Taxation

  • Lower 25 percent corporate tax will apply on companies with up to Rs 400 crore turnover, covering 99.3 percent  of corporate India
  • Simplified return form for GST registered businesses in the offing
  • Basic customs duty on auto parts, optical fibres, digital camera, cashew, certain synthetic rubber, vinyl flooring hiked
  • Customs duty exempted on components of specified electronic goods
  • Customs duty on certain parts of electric vehicles removed
  • Cess on petrol, diesel raised by Re 1 per litre; customs duty on gold raised to 12.5 percent from 10 percent
  • A nominal basic excise duty imposed on tobacco- Proposes Legacy Dispute Resolution scheme to solve litigations in service tax and excise

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