Union Budget 2020-2021

Finance Minister Nirmala Sitharaman presented the Union Budget structured on the overall theme of “ Ease of Living”. Further, three prominent themes of the budget are −

• 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.

Agriculture, Irrigation and Rural Development

• Rs. 15 lakh crore target set for the year 2020-21.
• PM-KISAN beneficiaries to be covered under the KCC scheme.
• Rs. 1 lakh crore fisheries’ exports to be achieved by 2024-25.
• 200 lakh tonnes fish production targeted by 2022-23.
• 3477 Sagar Mitras and 500 Fish Farmer Producer Organisations to involve youth in fisheries extension.
• Kisan Rail to be setup by Indian Railways through PPP to build a seamless national cold supply chain for perishables.
• Krishi Udaan to be launched by the Ministry of Civil Aviation.
• One-Product One-District for better marketing and export in the Horticulture sector.
• Jaivik Kheti Portal – online national organic products market to be strengthened.
• PM – KUSUM to be expanded.
• Financing on Negotiable Warehousing Receipts (e-NWR) to be integrated with e-NAM.
• Deen Dayal Antyodaya Yojana – 0.5 crore households mobilised with 58 lakh SHGs for poverty alleviation.
• In Livestock, doubling of milk production capacity, and increase in artificial insemination sought.

Wellness, Water and Sanitation

• Jan Aushadhi Kendra Scheme to offer 2000 medicines and 300 surgicals in all districts by 2024.
• TB Harega Desh Jeetega campaign launched – commitment to end Tuberculosis by 2025.
• Commitment to ODF – Plus in order to sustain ODF behaviour.
• Rs. 69,000 crore allocated for overall Healthcare sector.

Education and Skills

• New Education Policy to be announced soon.
• National Police University and National Forensic Science University proposed for policing science, forensic science, and cyber-forensics.
• Up to 1-year internship to fresh engineers to be provided by Urban Local Bodies.
• Ind-SAT proposed for Asian and African countries as a part of Study in India program.
• Rs. 99,300 crore for education sector and Rs. 3,000 crore for skill development in 2020-21 is allotted.

Industry, Commerce and Investment

• Investment Clearance Cell proposed to be setup.
• National Technical Textiles Mission to be setup to position India as a global leader in technical textile.
• New scheme NIRVIK to be launched to achieve higher export credit disbursement. All Ministries to issue quality standard orders as per PM’s vision of “Zero Defect-Zero Effect” manufacturing.
• Rs.27,300 crore allocated for 2020-21 for development and promotion of Industry and Commerce.

Infrastructure

• National Infrastructure Pipeline – More than 6,500 projects across sectors, to be classified as per their size and stage of development.
• A National Logistics Policy to be released soon.
• National Skill Development Agency to give special thrust to infrastructure – focused skill development opportunities.
• Rs.100 lakh crore to be invested on infrastructure over the next 5 years.

Power

• Expansion of national gas grid from the present 16,200 km to 27,000 km proposed.
• Rs.22,000 crore proposed for power and renewable energy sector in 2020-21.

New Economy

• Policy to enable private sector to build Data Centre parks throughout the country.
• Rs.6,000 crore proposed for Bharat net programme in 2020-21.
• Mapping of India’s genetic landscape – Two new national level Science Schemes to be initiated to create a comprehensive database.
• Knowledge Translation Clusters to be set up across different technology sectors including new and emerging areas.
• Rs.8,000 crore proposed over five years for National Mission on Quantum Technologies and Applications.

Financial Sector

• Deposit Insurance and Credit Guarantee Corporation (DICGC) permitted to increase Deposit Insurance Coverage to Rs. 5 lakh from Rs.1 lakh per depositor.
• Co-operative Banks to be strengthen by amending Banking Regulation Act.
• NBFCs eligibility limit for debt recovery reduced from − Rs. 500 crore to Rs. 100 crore asset size, Rs. 1 crore to Rs. 50 lakh loan size.
• Government to sell its balance holding in IDBI Bank to private, retail and institutional investors through the stock exchange.

Financial Market

• FPI limit in corporate bonds increased to 15% from 9% of its outstanding stock.
• Debt Based Exchange Traded Fund expanded by a new Debt-ETF consisting primarily of Government Securities.
• An International Bullion exchange(s) to be set up as an additional option for trade by global market participants with the approval of regulator.
• Government to sell a part of its holding in LIC by way of Initial Public Offer (IPO).
• For year 2020-21:Nominal growth of GDP estimated at 10%.
• Fiscal deficit of 3.8% estimated in RE 2019-20 and 3.5% for BE 2020-21.

Tax

• Around 70 of the existing exemptions and deductions (more than 100) to be removed in the new simplified regime.
• Corporate Tax- Tax rate of 15% extended to new electricity generation companies.
• Dividend Distribution Tax – DDT removed making India a more attractive investment destination.
• Start-ups – Start-ups with turnover upto Rs. 100 crore to enjoy 100% deduction for 3 consecutive assessment years out of 10 years.
• MSMEs – Turnover threshold for audit increased to Rs. 5 crore from Rs. 1 crore for businesses carrying out less than 5% business transactions in cash inorder to boost less cash economy.
• Co-operative societies exempted from Alternate Minimum Tax (AMT) just like Companies are exempted from the Minimum Alternate Tax (MAT).
• Affordable Housing – Additional deduction up to Rs. 1.5 lakhs for interest paid on loans taken for an affordable house extended till 31^st March, 2021.
• Income Tax Slabs for individuals below 60 years of age under new tax regime – Applicable to FY 2020-21 (AY 2021-22). The tax calculated on the basis of such rates will be subject to health and education cess of 4%. Any individual opting to be taxed under the new tax regime from FY 2020-21 onwards will have to give up certain exemptions and deductions.

Income Tax Slab	Tax Rate
Up to Rs 2.5 lakh	NIL
Rs 2.5 lakh to Rs 5 lakh	5%
Rs 5 lakh to Rs 7.5 lakh	10%
Rs 7.5 lakh to Rs 10 lakh	15%
Rs 10 lakh to Rs 12.5 lakh	20%
Rs 12.5 lakh to Rs 15 lakh	25%
Rs 15 lakh and above	30%