Budget 2020: In a bid to revive the economic growth that slumped to a six-year low of 4.5 per cent in July-September quarter, Finance Minister Nirmala Sitharaman on Saturday slashed income tax for individuals, abolished dividend tax for companies and announced record spending in agriculture and infrastructure sectors. The government also announced a sale of government stake in the country’s largest insurer, Life Insurance Corporation (LIC). While presenting her second budget, Sitharaman said this budget was aimed at boosting incomes and enhancing purchasing power, stressing that the economy’s fundamentals were strong and inflation was well contained.
The Finance Minister proposed new tax slabs of 15 per cent and 25 per cent in addition to the existing 10 per cent, 20 per cent and 30 per cent. The new slabs would be for individuals not availing certain specified deductions or exemptions. Under the new, optional regime, those with a taxable income between Rs 5 lakh and Rs 7.5 lakh will pay 10 percent tax, against the present 20 percent. The new tax regime is optional for those willing to forego all exemptions. The nominal growth of GDP for 2020-2021 has been pegged at 10 per cent. The fiscal deficit target pegged at 3.5% of GDP
This was the longest Budget speech by any finance minister. Sitharaman, 60, broke her own record of a 2-hour-17-minute-long maiden Budget speech in July 2019. Peppered with a Kashmiri poem, Tamil couplets, the 2020 speech went on for over 2 hours and 30 minutes. She cut short her Budget speech after feeling unwell towards the end of the presentation.
Meanwhile, the BSE Sensex plummeted 988 points on Saturday to close below the key 40,000-mark, led by an intense broad-based selloff after the Union Budget for 2020-21 failed to live up to market expectations.