Key Highlights of Union Budget 2020
Aiming to become a $5 trillion economy, Union Budget 2020 is set to revive the economic growth in the country. Recently, the Finance Minister of India, Nirmala Sitharaman has presented the Union Budget 2020-21.
Well, budget 2020 revolves around three key themes of an ‘aspirational India’, ‘caring society’ and ‘economic development’. This year’s budget has introduced a new optional personal income tax system along with emphasizing capacity building, empowerment of marginalized sector, agriculture and research development.
Here are some of the key highlights of Union Budget 2020:
- There has been a significant change in the tax slab rates. The budget 2020 has made an option available to taxpayers to either pay taxes according to the new regime or else continue the existing one.
- Dividend Distribution Tax (DDT) has been eliminated. Companies do not need to pay DDT, it will be subjected to tax in the hands of recipients at applicable rates.
- New power generation companies will get a 15 percent concessional tax rate.
- To smoothen the process of the tax system, more than 70 deductions have been removed.
- The government has announced a 16 action points plan that aims to double the farmers’ income by 2022.
- Rs. 2.83 lakh crore has been allocated for agriculture and allied activities including irrigation and rural development.
- Agri credit target has been set at Rs. 15 lakh crore for the year 2020-21.
- Krishi UDAN to be launched for better transportation, marketing, and export.
- The budget also encourages balanced use of all fertilizers.
- The budget also encourages farmers in setting up solar pumps.
- Rs. 99312 crore has been allocated to the education sector. Out of this Rs. 39,466 crore has been allocated to higher education and Rs. 59,845 to school education and literacy.
- Rs. 3002.21 crore has been proposed to work towards skills development to be the country with the largest working-age population in the world by 2030.
- The government to introduce the INSAT exam to enroll Asian and African students in Indian universities.
- Rs. 69000 has been announced for the health sector to enhance India’s flagship scheme Ayushman Bharat – which is the world’s largest government-funded health insurance scheme.
- More hospitals are expected to set up in Tier-II, Tier-III cities under the PPP model.
- The government has allocated Rs. 103 lakh crore for infra projects.
- Transport is one of the important pillars of India and the budget has provision for Rs. 1.7 lakh for its infrastructure.
- The National Logistics Policy is expected to release soon to create a single window e-logistics market.
- More than 100 airports are anticipated to develop by 2024 to support UDAN.
Startups and MSMEs
- From April 2020, a new simplified return for GST has been announced.
- 100 percent deduction for 3 successive years for start-ups with turnover up to Rs. 100 crore.
- Provision of seed fund to support new ideas and development of early-stage startups.
- Changes are supposed to be made to allow NBFCs to enhance invoice financing to MSMEs.
The budget also encourages the use of emerging technologies to develop the economy. Well, the finance minister has estimated the growth of GDP at 10 percent for 2020-21.