The Union Budget 2020, which the Government of India had asked for suggestions and feedback on from the citizens of India, has been just been presented in the parliament. This was the second Union Budget that was presented by Nirmala Sitharaman, Union Minister for Finance and Corporate Affairs, Government of India.
While the expectations around the budget mainly revolved around jobs, economy and regenerating growth, whether or not the Government has met with those expectations can only be gauged after analyzing the consequences of the initiatives announced.
Highlights of the Union Budget 2020
Nirmala Sitharaman started the announcement taking into fact that growth was indeed the agenda for the Union Budget 2020. “Our people should be gainfully employed, our businesses should be healthy, for all minorities, women and people from SCs and STs, this Budget aims to fulfill their aspirations,” she said.
Highlighting on the government’s achievements, she said that GST has resulted in efficiency gains in the transport and logistics sector, inspector raj has vanished, it has benefitted MSME. Consumers have got an annual benefit of 1 lakh crore rupees by GST.
“With renewed vigour, under PM’s leadership, we commit ourselves to present the people of India with all humility and dedication. People have reposed faith in our economic policy,” she added. Furthermore, she claimed that talent, technology and entrepreneurship are the key themes for this year’s budget.
Due to the proliferation of technologies such as analytics, machine learning, artificial intelligence, and bioinformatics, the number of people in the productive age group at its highest, said the finance minister.
In the meanwhile, here is what the Government of India has announced the IT industry, startups and employment:
- Aspirational India, economic development and caring society with ease of living are the 3 themes of the Union Budget 2020.
- Artificial intelligence and machine learning will be used in the healthcare sector.
- New education policy to be announced soon.
- Several job oriented courses to be introduced soon.
- To provide quality education to students of deprived sections of society, and those with no access to higher education, it is proposed to start a degree level full-fledged online education program by top 100 ranking institutions in National Institutional Ranking Framework.
- Internship for young engineers under urban local bodies for a period of one year to be encouraged.
- India to become the preferred education destination: INDSAT aptitude test to be introduced for students from Asian and African countries to Study in India on scholarships.
- Last year, Modi Government allocated Rs 94,800 crore towards the Education Sector, in this Budget 2020 it has been increased to Rs 99,300 crores. Rs 3000 crore has been announced for skill development.
- With the aim of making India the preferred destination for higher education, national police university and national forensic university will be established.
- There is a huge demand abroad for nurses, teachers and paramedical staff but skillsets do not match. Therefore, special bridge courses will be designed of the Ministry of health and skill development.
- Project Preparation Facility to be set up for preparation of infrastructure projects, actively involving young engineers and management graduates.
- Steps will be taken to attract external commercial borrowing and FDI in the education sector.
- 150 higher institutes to start apprentice training for General category students.
- Rs 27,300 crore for development and promotion of industry and commerce.
- Scheme focussed on encouraging the manufacture of mobile phones, electronic equipment, and semiconductor packaging to be introduced.
- A national logistics policy will be released soon to create a single window e-logistics market, making MSMEs competent.
- India’s renewable energy sector to receive a boost owing to the government’s Solar plans for Agriculture and Railways. Rs 22,000 crore rupees to be provided to power and renewable energy sector in 2020-21.
- All states and UTs requested to replace conventional energy meters by pre-paid smart meters in 3 years, this will give consumers the freedom to choose supplier and rate as per their requirements.
- Data is the new oil. Policy to enable private sector to build data centre parks throughout the country will be rolled out soon. All institutions at ground level like Anganwadi, Gram Panchayat and police stations will be provided digital connectivity.
- Entrepreneurship is the strength of India. Setting-up of an investment clearance cell that will provide end to end facilitation and support including pre-investment advisory proposed.
- 8,000 crore rupees over five years to be provided for quantum technologies and applications.
- Fibre to Home connections under Bharat Net will be provided to 1 lakh gram panchayats this year itself; Rs 6000 crore rupees provided for Bharat Net.
- Major reforms to be introduced for recruitment into non-gazetted posts in government and PSBs; National Recruitment Agency to be set up for conducting common online eligibility tests for recruitment to these posts.
- An app-based invoice financing facility for MSMEs to be introduced. App-based invoice financing loans product to obviate the problem of delayed payments and cash flow mismatches for MSMEs.
- The government asks RBI to extend the debt restructuring window for MSME till March 2021.
- The government proposes to sell part of its holding in Life Insurance Corporation by way of Initial Public Offering.
- Decision of reducing the corporate tax rate for new companies in the manufacturing sector to an unprecedented level of 15 percent. More than 100 exemptions and deductions as of now, around 70 removed.
- To boost startups, the tax burden on employees due to tax on Employee Stock Options to be deferred by five years or till they leave the company or when they sell, whichever is earliest.
- The turnover threshold for the audit of MSMEs to be increased from 1 crore to 5 crore rupees, to those businesses which carry out less than 5 percent of their business in cash.
Major Tax Relief Announced in the Union Budget 2020
To provide significant relief to individual taxpayers and simplify the tax law, a new regime of personal income tax will be introduced.
- No income tax for annual income of up to Rs 5 lakhs.
- 10 percent income tax for income between 5 and 7.5 lakhs.
- 15 percent income tax for income between 7.5 and 10 lakhs.
- 20 percent income tax for income between 10 and 12.5 lakhs.
- Income above 15 lakh rupees will continue to be taxed at 30%.