Union Budget 2019 Key Highlights
Union Budget 2019 Key Highlights
Union Budget 2019:
Before understanding Key highlights of Budget 2019, let us know what a budget actually means. So, budget is basically a statement which shows the planned income and expenditure. The concept of budget applies everywhere ranging from a household to a national level.
On a micro level, if we take an example of monthly household budget, it may contain items like grocery, transportation expenses, electricity, telephone bills etc, alongwith amount allocated to each head. Similarly, for a country, budget includes amount allocated to sectors like- Education, Defence, Healthcare, Infrastructure,etc and any other government schemes.
Interim budget 2019 was presented by Interim Finance Minister Piyush Goyal on 1st Feb 2019
What does Interim Budget mean?
With 2019 being an election year, uncertainity prevails over the present government continuing its term. The sole reason for an Interim Budget to be there in place is to make sure that government operations do not seize up till the next elections.
Key Highlights of Budget 2019:
* Tax rebate raised for income up to Rs 500,000 : The threshold of exempt income limit from the ambit of income tax has been increased from 2,50,000 to 5,00,000.
* Benefit of rollover of capital tax gains increased from one residential house to two houses: Capital gains tax is imposed on sale of residential property. Earlier, a person who has sold one residential property was only allowed to purchase one other residential property so that he isn’t charged capital gains tax, this limit has been increased to two houses, ie now even if two houses are purchased from the sale proceeds of one property, benefit can be availed. This benefit can be availed upto a limit of 2cr.
* This roll over on capital gains up to Rs 2 crore can be exercised once in a lifetime
* Income Tax returns to be processed within 24 hours and returns will be paid immediately in next 2 years : “All returns will be processed in 24 hours and refunds issued simultaneously,” “Within the next two years, almost all verification and assessment of returns will be done electronically through anonymised back office, manned by tax experts and officials, without any personal interface between taxpayers and tax officers.”
*Rs 6,000 per year assured income for small and marginal farmers : Farmers, who own upto 2 hectares (5 acres) of land, will be given a direct income support Rs 2,000 every four months a year, which equals to Rs 6,000.
* Govt to allocate Rs 75,000 crore for the scheme
* Two percent interest subvention for farmers affected by natural disasters, additional 3 percent if they repay loans on time: Interest subvention refers to subsidy on interest on loan. For farmers affected by natural calamities they will be offered a reduction of 2% and additional 3% if they pay their loan on time.
*Two percent interest subvention for farmers pursuing animal husbandry, fisheries
* Budgetary allocation of Rs 19,000 crore for construction of rural roads under Gram Sadak yojana in 2019/20
* Government to allocate Rs 60,000 crore for a MNREGA scheme :
* New social security coverage scheme for unorganised sector workers
* Assured monthly pension of Rs 3,000 rupees per month, with contribution of 100 rupees per month, for workers in unorganized sector after 60 years of age
* Scheme to benefit 10 crore workers in unorganized sector, may become the world's biggest pension scheme for unorganized sector in five years
* Group of Ministers to suggest ways to reduce GST for house buyers
* Small and medium-sized businesses registered under the GST to get 2 percent interest subvention on loan of Rs 1 crore
* Average monthly tax collection at Rs 97,100 crore per month so far this year : The average monthly collection of Goods and Services Tax (GST) in the current fiscal has increased to Rs 97,100 crore from Rs 89,700 crore last year.
* Gross market borrowing seen at Rs 7.04 lakh crore in 2019/20 : gross borrowing would be Rs 7.1 trillion for 2019-20, higher than Rs 5.71 lakh crore estimated this year. Gross borrowing includes repayments of past loans.
* Goyal says expects other banks on the central bank's Prompt Corrective Action list to be removed soon: To ensure that banks don't go bust, RBI had put in place some trigger points to assess, monitor, control and take corrective actions on banks which are weak and troubled. The process or mechanism under which such ac tions are taken is known as Prompt Corrective Action, or PCA.
Bank of India (BoI), Bank of Maharashtra (BoM) and Oriental Bank of Commerce (OBC) -- are out of the PCA framework on 31st January 2019.
* Fiscal deficit for 2018/19 seen at 3.4 percent of GDP : The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings needed by the government. While calculating the total revenue, borrowings are not included.
* Fiscal deficit for 2019/20 estimated at 3.4 percent of GDP
* deficit for 2020/21 seen at 3 percent of GDP
* Government's stated commitment earlier was to bring down the fiscal deficit to 3.1 percent of GDP by the end of March 2020, and to 3 percent by March 2021
* India's current account deficit for 2018/19 seen at 2.5 % of GDP : The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings needed by the government. While calculating the total revenue, borrowings are not included.
* Debt to GDP ratio to be brought down to 40 percent by 2024/25 : The less the percentage of Debt to GDP ratio, The debt-to-GDP ratio is the ratio of a country's public debt to its gross domestic product (GDP). By comparing what a country owes with what it produces, the debt-to-GDP ratio indicates its ability to pay back its debts. The government now aims to reduce its debt-to-GDP ratio to 48.8% in 2018-19, 46.7% in 2019-20 and 44.6% in 2020-21,
*Railway's operating ratio seen 96.2% in FY19 Vs 95% FY20 : Operating ratio refers to a country’s operating expenses expressed as a percentage of revenue. Less are the expenses, Lower the operating ratio,.
*Railway capex for FY20 set at record Rs 1.6 lakh crore : Money spent to acquire or upgrade physical assets is called capex. This is 8% higher than last year’s 1.48cr
* Today there is not a single unmanned railway crossing on the broad gauge in India.
* Govt increases defence budget to over Rs 3 lakh crore. Govt will provide additional funds for Defence, if needed.
* Govt disbursed Rs 35,000 crore under OROP scheme in the last few years: In this, One Rank One Pension (OROP) means the payment of the same pension to military officers for the same rank for the same length of service, irrespective of the date of retirement.
* A single window clearance for filmmakers