The longest Budget speech of Independent India brought triple themes for the Indian Economy. Although the budget ‘seems’ pleasing for almost every sector, it could not substantiate the monotonous forgoing of the present economic crisis.
The Union Budget 2020 arrived with three themes i.e. Aspirational India, Economic Development, and Caring Society. Aspirational India includes Agriculture, Irrigation and Rural Development; Wellness, Water and Sanitation; and Education and Skills. Within the bracket of Economic Development comes Industry, Commerce and Investment; Infrastructure; and New Economy. Under Caring Society there are Women & Child, Social Welfare; Culture and Tourism; and Environment and Climate Change.
Agriculture, Irrigation and Rural Development aims to achieve the goal of doubling farmers’ income by 2022. The Finance Minister, Nirmala Sitharaman introduces 16-point action plan in order to achieve this goal. The plan comes with
Implementation of model laws (issued by the Centre) undertaken by the respective States to be encouraged.
Comprehensive measures will be undertaken for 100 water stressed districts.
PM KUSUM expansion will provide 20 lakh farmers for standalone solar pumps and 15 lakh farmers for grid connected pumps.
Balanced use of all kinds of fertilizers.
Public Private Partnership mode adoption in order to set up efficient warehouses through Viability Gap Funding.
Village Storage Scheme to provide good holding capacity.
KISAN RAIL to build a seamless national cold supply chain for perishables.
KRISHI UDAAN for both international and national routers.
“One product one district” in Horticulture Sector for better marketing and export.
Organic, natural and integrated farming measures.
Integration of e-NWR with e-NAM.
2020-21 target of Rs. 15 lakh crore set for agricultural credit.
Doubling of milk processing capacity by 2025.
Boosting of fisheries with Blue Economy.
Deen Dayal Antyodaya Yojana to mobilise SHGs for poverty alleviation.
An outlay of Rs. 2.83 lakh crore – Rs. 1.6 lakh crore for agriculture and Rs. 1.23 lakh crore for rural development.
Under Wellness, Water and Sanitation; health sector has been allocated Rs. 69,000 crore inclusive of Rs. 6,400 crore of Prime Minister Jan Arogya Yojana (PMJAY) while Rs. 12,300 crore has been given for Swachh Bharat Mission and Jal Jeevan Mission scheme Rs. 11,500 crore. The third item of Aspirational India, i.e., Education and Skills, has been allocated with the amount of Rs. 99,300 crore for education sector and Rs. 3,000 crore for skill development. The new education policy is yet to be clarified by the government.
The Industry, Commerce and Investment of the theme ‘Economic Development’ has been granted Rs. 27,300 crore for its development and promotion. The second item on the list of second theme is Infrastructure. One major port will be corporatized and will be listed under stock exchange. Allocation of Rs. 1.70 lakh crore has been done for transport infrastructure and Rs. 22,000 crore for power and renewable energy sector. Within the bracket of New Economy (third item), Bharatnet programme has been provided with Rs. 6,000 crore and an outlay of Rs. 8,000 crore over a period of five years for the National Mission on Quantum Technologies and Applications.
For Women & Child, Social Welfare; the proposed budget for nutrition-related programmes has been allocated with Rs. 35,600 crore, Rs. 28,600 crore for programmes specific to women, Rs. 85,000 crore for SCs and OBCs, Rs. 53,700 for welfare of STs, and Rs. 9,500 crore for senior citizens and persons with disabilities. Under Culture and Tourism, tourism promotion and Ministry of Culture has received Rs. 2,500 crore and Rs. 3,150 crore respectively. Environment and Climate Change, i.e., the last item of the last theme got the Ministry of Environment, Forest and Climate Change an allocation of Rs. 4,400 crore.
Apart from these allocations, a few things like certain imported military equipment, some India-made mobile components, Purified Terephthalic Acid, newsprint, sports goods, lightweight coated paper, and finger print reader have become cheaper whereas there is a huge list of items that turned costlier like skimmed milk, soya fibre, raw sugar, animal husbandry based products, imported items (including footwear, toys, mustard oil, ghee/butter/oil/cheese and many more), etc.
The Income Tax comes with two options provided one with four tax slabs (old) and the other with six tax slabs (new). The gaining point under tax – Rs. 78,000 saved in taxes under the new tax system for individual earning Rs. 15 lakh according to the Finance Minister whereas the losing points – Dividend Distribution Tax scrapped, but dividend gets taxed in your hands (those in 20% tax slab worse off); cess and surcharges stay the same, not providing any additional relief to tax payers; the effective tax rates are now ten due to slabs, surcharges, with the highest rate at 42.74%; and higher tax payers do not benefit, no real boost to money in hand even for those at lower levels.
LIC and IDBI disinvestment will bring transparency, depth to market which is good for stock investors. Although disinvestment will fix the fiscal deficit and deal with the economic crises in short run, surviving solely on it in long run won’t. The rupee must come in through revenue more rather than capital in order to float the sinking ship. As the budget session went on, the corporate sector unexpectedly was not given due attention which resulted to Sensex showing the worst reactions to it heading to a crash. The implementation of the plan is what is being looked upon after the budget presentation.
Featured Image Credits: Deccan Herald
B.Com, Jamia Millia Islamia