Union Budget 2020 LIVE UPDATES:
As Sitharaman presents the first Union Budget of Modi 2.0, she faces the arduous task of living up to the expectations of the voters who have returned the BJP-led government with a resounding majority and also balancing the economy. Sitharaman is expected to outline the Centre's plans to deal with the challenges posed by the downward spiral of the economy and achieve the $5 trillion economy target by 2025. Some analysts are predicting tax changes to boost consumption levels and support businesses. The ministry is likely to provide relief on income tax slabs to the middle class by about 10 per cent of their overall tax outgo for the year and also provide incentives for home buyers. A push is also expected in sectors like infrastructure, education, health and railways.
Addressing media before the budget session, Prime Minister Narendra Modi on Friday said he hoped for detailed discussions on the economy. "I want wide-ranging, qualitative discussion on economy in both houses. Our session should be focused on economic matters and how India can take advantage of the current global economic situation," said PM Modi in his customary remarks at the start of a session.
President Ram Nath Kovind pointed out that this was the first session of 2020 — the start of a new decade — and efforts should be made to lay a "strong foundation for the decade".
According to data released by the Ministry of Statistics and Programme Implementation (MoSPI), India’s gross domestic product (GDP) will grow by just 5 per cent in the current financial year (2019-20). Last financial year, 2018-19, the Indian economy grew at 6.8 per cent.
The gross value added (GVA), which maps the economic activity from the income side as against the GDP that maps it from the expenditure side, is expected to grow by 4.9 per cent in 2019-20 as against 6.6 per cent in 2018-19.
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Union Finance Minister Nirmala Sitharaman has kept a tight leash on spending despite a sputtering economy, tacitly admitting there is little fiscal space, and settled for a growth rate of just about 6 per cent for 2020-21, assuming an average inflation of about 4 per cent for the year. Read more
Employees' union of LIC has strongly opposed the government's plan to sell a part of its holding in the country's largest financial institution through a public issue. "The government proposes to sell a part of its holding in LIC through an initial public offer," Finance Minister Nirmala Sitharaman said on Saturday while presenting the Budget for 2020-21. Currently, the government fully owns LIC.
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Kerala Chief Minister Pinarayi Vijayan on Saturday slammed the union budget, saying that it would neither help strengthen the economy nor ensure social security or development, but only further increase inflation and unemployment in the country. All the legitimate needs of the southern state were completely ignored in the budget,presented by Finance Minister Nirmala Sitharaman, though Kerala had submitted a detailed
Presenting the Budget 2020 in Lok Sabha, Finance Minister Nirmala listed three core themes for the Budget — Aspirational India, Economic Development For All and A Caring Society. See picture
Aiming to boost the affordable housing demand, Finance Minister Nirmala Sitharaman on Saturday proposed to extend the date of availing an additional Rs 1.5 lakh tax deduction on home loan interest by one more year till March 2021. The additional deduction of Rs 1.5 lakh over and above Rs 2 lakh was introduced in the last year's budget. This was allowed for those buying homes for the first time and of up to Rs 45 lakh and made applicable for home loans sanctioned till March this year. The finance minister also announced that builders will get tax holiday on affordable housing projects approved till March 2021.
Addressing a presser post-budget, Prime Minister Narendra Modi said, "an integrated approach to agriculture was adopted in the budget, which along with traditional methods will increase value addition in horticulture, fisheries, animal husbandry and also increase employment."
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.
The government’s strategy, or hope at least, is that leaving people with more money will help boost their consumption levels, which are at present quite subdued, as witnessed in the slump in sales of goods and services across the board. Higher consumption will bring down the inventories in the economy and incentivise businesses to invest again. The ground has been prepared to make investments attractive for businesses as the government has already cut the corporate tax rate last year. Read more
"I agree the budget presentation was long, but it was absolutely youth-focused and each and every scheme we introduced will benefit the youth, " Sitharaman on opposition's reaction.
"MGNREGA is demand-driven scheme and it will be increased or adjusted according to the demand and hence a cut in rural budget, "Sitharaman in the post-budget presser.
"Recapitalisation budget of bank mergers will be decided as and when needed," says Sitharaman addressing a Press Conference
Revenue Secy Ajay Bhushan Pandey on exemptions: "We took a comprehensive review of all exemptions&found close to 120 exemptions. We took a review of each item. In order to offer a simplified system, now the total exemptions which have been removed from the new system is, about 70."
"People who are residents of no country in the world will be deemed to be a resident in India and his worldwide income will be taxed. A person now has to stay abroad for 240 days abroad to be exempted from the tax slab"
"Tax charter is our commitment to honour the taxpayers and enshrined the rights of taxpayers. The government's intent is to not harass taxpayers but to see them as wealth creators ," Finance Minister on Tax Charter
Finance Minister Nirmala Sitharaman on the option of lower income tax rates: We wanted to place money in the hands of the people, particularly the middle class and lower-middle classes. We also wanted to simplify income tax process and increase compliance.
Finance Minsiter Nirmala Sitaraman is addressing a Press Conference now.
Finance Minister Nirmala Sitharaman has said that the government will sell a part of its holding in Life Insurance Corporation of India (LIC) through an initial public offering (IPO). The government owns 100 per cent of LIC. That LIC has been identified as a candidate for a potential public listing by the government, was reported first by The Indian Express in July 2019. The government’s move is a part of efforts to push through an aggressive disinvestment and asset monetisation programme. Read More
Finance Minister Nirmala Sitharaman missed last two pages of the budget presentation. Here's the full text
After Finance Minister Nirmala Sitharaman ended her Budget speech abruptly after speaking for over two hours, Rahul Gandhi outside the Parliament told news agency ANI: "Congress leader Rahul Gandhi: Maybe this was the longest Budget speech in history but it had nothing, it was hollow."
"I’m less worried about the government’s ‘Fiscal’ Deficit than I am about it’s ‘Talent’ Deficit," Milind Deora wrote on Twitter reacting to Budget 2020.
As Finance Minister Sitharaman broke her own record by delivering the longest Budget speech in the Parliament, Congress MP Karti Chidambaram in a sarcastic tweet said, "There must be a time limit for budget speeches."
Finance Minister Nirmala Sitharaman on Saturday announced increasing customs duty on imported footwear and furniture. In her second Budget presentation, the finance minister also imposed health cess on import of medical equipment.
There are some key developments and focus made by the Government of India towards the personal tax regime including additional Interest deduction of 1.5 lacs for housing loans for affordable housing extended upto 31st March 2021, DTT abolished to attract investors and Dividend taxable only in hands of recipient at applicable rates, Deloitte India said in a statement. “Another step targeted to make India an attractive destination of investment - the government has proposed to remove DDT paid by Indian companies on dividend and replace it with a traditional withholding mechanism. The abolition of this tax can boost market sentiment and make Indian equity more attractive.”- Amit Bablani, Director, Deloitte India
This year, Sitharaman has broken her own record of the longest Budget speech, In 2019, Sitharaman's speech clocked 2 hours and 17 minutes. This time, she has crossed 2 hours, 30 minutes and is still speaking! As she crosses 2 hours 30 minutes, she tells the Lok Sabha she has only two pages left...
"Allotment of the PAN card will now happen immediately based on your Aadhaar card. You will no longer need to fill long forms. No other documentation required," Sitharaman said.
Under new Vivaad se Vishwaas scheme, the taxpayer would be only required to pay disputed tax amount and gets complete exemption from interest and penalty by paying it by March 31, 2020. 4.83 lakh direct tax cases are pending.
FM says have removed 70 exemptions, deductions with a view to further simplify tax regime. Concessional tax rate of 15 pc extended to power generation companies. Govt 100 pc tax concession to sovereign wealth funds on investment in infra projects
Date of approval of affordable housing projects for availing tax holiday on profit earned by developers extended by 1 yr
Dividend distribution tax abolished, says FM. Companies will no longer be required to pay DDT. A total of Rs 25,000 crore is revenue foregone due to DDT abolition, says FM. This will make India an attractive investment destination.
# No tax for income below Rs 5 lakh
# 10% tax for income between Rs 5 lakh to Rs 7.5 lakh
# 15% tax for income between Rs 7.5 lakh to Rs 10 lakh
# 20% tax for income between Rs 10 lakh to Rs 12.5 lakh
# 25% tax for income between Rs 12.5 lakh to Rs 15 lakh
# 30% tax for income above Rs 15 lakh
Under the new regime, an individual will have to pay 10 percent tax for income between Rs 5 to 7.5 lakh, down from the previous 20 percent. 15 per cent tax for 7.5 lakh to Rs 10 lakh income. 25% tax for income between 12.5 lakh to 15 lakh and 30% tax for income above 15 lakh,' FM Sitharaman announced in the Budget presentation today. No tax for people earning up to Rs 5 lakh. The new income tax slabs are optional. You can choose to stick to the current income tax slabs or switch to the new ones, without benefit of deductions
Foreign Portfolio Investment (FPI) limits in corporate bonds being raised from 9 per cent to 15 per cent is a major move. That, along with fiscal deficit not being allowed to spiral much, should help prevent domestic interest rates from going up.
Fiscal deficit estimated at 3.5% in 2020-21, revised for current year upwards to 3.8% from 3.3%: Nirmala Sitharaman
Receipts for 2020-21 pegged at Rs 22.46 lakh cr, expenditure Rs 320.42 lakh cr, says Sitahraman.
Nominal GDP growth for 2020-21 is being projected at 10 per cent. It is lower than the 12 per cent that was projected in 2019-20, which turned out to be only 7.5 per cent. Recalibration of expectations.
Govt proposes to sell part of its stake in LIC, FM Sitharaman announced while making the Budget presentation.
FDI limit in corporate bonds increased from 9% to 15% in outstanding stocks, she added.
'Wish to underline that this August House should know that mechanism in place to monitor the health of all banks and deposited money is safe. Insurance cover for depositors increased from Rs 1 lakh to Rs 5 lakh,' FM said. This measure is important in the backdrop of recent default by cooperative lender PMC Bank Steps are being also taken to professionalise cooperative banks.
The 15th Finance Commission, tabled by the FM in parliament prior to the budget presentation, has recommended keeping the tax devolution share "virtually unchanged" to states to 41 per cent for the year 2020-21 from 42 per cent. The 1 percentage point reduction, though, has been done to account for the reorganisation of the erstwhile state of Jammu and Kashmir.
"We have notionally estimated that the share of the erstwhile state of Jammu & Kashmir would have come to around 0.85 per cent of the divisible pool. We believe that there is a strong case for enhancing this to 1 per cent of the divisible pool to meet the security and the special needs of the union territories of Jammu and Kashmir and Ladakh. Since this enhancement has to be met from the Union's resources, we recommend that the aggregate share of states may be reduced by about 1 percentage point to 41 per cent of the divisible pool," the report has said.
The Commission’s report, along with an action taken report, was placed in Parliament. The Commission has earlier submitted its report to the President last December.
People note down important announcements for them outside BSE Mumbai. (Express photos by Nirmal Harindran)
We wish to institute a tax payer's charter in our statute. We will put this into law. We wish to ensure our taxpayers are free against tax harassment: Finance Minister
Listing the main reforms of Modi government, Finance Minister Nirmala Sitharaman mentioned Ayushman Bharat, wealth creators being respected, PM Kisan doubling income, ease of living. " Enough proof to say national security is the top priority of this government," she said.
"Government proposes to establish Indian Insitute of Heritage and Conservation. Five Archeological sites to be developed as iconic sites with the onsite museum in Haryana, UP, Gujarat, Tamil Nadu, Assam," the FM said.
Finance Minister Nirmala Sitharaman on Saturday said 100 more airports will be developed by 2025 to support the UDAN scheme. She said Rs 1.7 lakh crore has been provided for transport infrastructure in 2020-21. She also said 1,150 trains will run under the public-private partnership (PPP) mode, also four stations will be redeveloped with the help of the private sector.
FM allocates Rs 9,000 crore for senior citizens and Rs 53,700 crore for development and welfare of Scheduled Tribes. The Budget also provides Rs 85,000 crore in 2020-21 for the welfare of SC and other backward classes
Beti Bachao Beti Padhao has yielded tremendous results. The gross enrolment ratio of girls across all levels of education now higher than boys. This budget provides 28,600 cr for schemes specifically for women. I propose to provide Rs 35600 crores for nutrition-related programmes for 2020-21., the FM said.
To harness the explosion of digital technology in the country, the finance minister has proposed to bring a policy to build data centre parks across the country. This is in line with the broad policy of the NDA government of encouraging data localisation. To provide Rs 6000 cr for BharatNet in FY 20-21; To provide Rs 8000 over 5 years for a national mission on quantum technology: FM Sitharaman
An hour into the Budget speech, markets are suddenly in red. The BSE Sensex is trading 88 points lower at 40,634, while the broader Nifty is 102 points lower at 11,932. It's not clear what has triggered the sudden fall. It could be because no concrete proposals have been announced even after one hour of the Finance Minister's Union Budget speech.
Setting up large solar power capacity alongside tracks, station redevelopment projects under PPP, more Tejas type trains, Mumbai-Ahmedabad high speed train to be pursued. The govt will replace conventional electric meters with smart meters in the next three years. Consumers can choose supplier and rate: Nirmala Sitharaman.
"Delhi-Mumbai Expressway and two other projects will be completed by 2023. Chennai-Bengaluru Express Way will also be started. A total of 12 lots of highway bundles will be monetised by 2024,"Sitharaman said.
"A new scheme —Nirvik — to be offered for exporters. To provide faster claims settlement. Refund of duties and inputs such as electricity payments and VAT which have been not refunded. It will be launched this year itself. Each district will have to be developed as an export hub. A total allocation of Rs 27,300 crore for development of industry and commerce in FY21," Sitharaman said.
A new scheme will be announced by the government to encourage domestic manufacturing of mobile phones, electronics and semiconductor boards, Finance Minister Nirmala Sitharaman says while presenting the Union Budget 2020. The details will be announced later.
"Entrepreneurship has always been the strength of India. To boost job creations, and skill development, the government is looking at creating five new smart cities in the country. Investment clearance cell to be set up for entrepreneurs. Individuals will be offered assistance in funding as well and a portal will be set up for this purpose. Efforts to step up entrepreneurship, amid a growing realisation that the Start-up India and other handholding schemes have not taken off as intended," FM said
FM Nirmala Sitharaman has announced an allocation of Rs 3,000 crore for the Skill India programme. “There exists a huge demand abroad for teachers, paramedical staff and caregivers. But their skills do not match the required ones by employers. My government proposes Rs 3000 crore for skill development. There is a shortage of qualified medical doctors both general practitioners and specialists; it is proposed to attach a medical college to a district hospital in PPP mode; details of the scheme to be worked out soon. Rs 99,300 crore allocated for education sector,” she says
"By 2030 India is said to have the largest working population in the world. Urban Local bodies around the country will provide internships for fresh engineers for up to a year. To ensure education reaches everyone, degree-level full-fledged online education programs will be allowed for institutes ranked in the top 100. INSAT exam will be held in African and Asian countries to benchmark foreign students," Sitharaman said, proposing online education to ensure education accessibility for everyone
Rs 3.6 lakh crore for Jal Jeevan Mission has been approved. This will be used to augment local water resources, desalination projects, water harvesting and renewing older sources in FY21. Push to improve water supply and sanitation
Shifting the focus to the health sector, Sitharaman said, "Proposal to set up viability gap funding to allow for entry of hospitals into aspirational districts through the PPP model, marking an expansion of capacity. Proceeds from taxation of medical devices to be used to fund this. Districts out of 112 aspirational districts that do not have any empanelled hospitals will be a priority. TB will lose, India will win. Will eliminate TB by 2025. Mission Indradhanush has been extended to cover new diseases and new vaccines."
Meanwhile, Sensex trades flat with a marginal gain of 23 points at 40,747 following the first few Budget announcements by the FM
"Agriculture, rural development will see an allocation Rs 2.83 lakh crores. The Centre also proposes plans to help farmers use proper manure and little water, encourage the balanced use of fertilizers. In order to build cooperation, the states have been asked to adopt 3 central model laws on agricultural land leasing, marketing and contract farming."
We want women Self Help Groups in the villages to distribute seeds to farmers with help of MUDRA scheme. Indian Railways will now play an even more involved role in food distribution. We will set up a Kisan Rail to help transport perishable goods within the country. Horticulture sector with its current produce of 311 million metric tonnes exceeds the production of food grains,' Sitharaman said.
The Budget has announced Krishi Rail, to be implemented by the Ministry of Railways, and Krishi Udaan by the Ministry of Civil Aviation. These will complement roadways for faster transportation of perishable agricultural goods. While in Railways, refrigerated coaches will be added to Express and Freight trains, the Krishi Udaan scheme will see flights on national and international routes pitching in.
A total of 6.11 crore farmers insured under Fasal Bima, says finance minister. She says hand-holding of farm-based activities needs to be done in cooperation with states. PM Kusum Scheme reduced dependence on diesel and kerosene and relied on social energy. Total of 20 lakh farmers can set up standalone solar pumps, she says.