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The Union Budget- “Bharat Ka Budget”

  • Sukanya Iyer
  • July 8, 2019
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As I start to Pen down my Thought Process for Union Budget 2019 of Modi Sarkar 2.0, while I sip my favorite specially brewed South Indian filter Coffee, I would like to quote Chanakya’s Sutras on –The Seven Pillars of Business Success/Economy—

Swami—The King (The Leader)

Amatya—The Minister (The Manager)

Janapada—The Country (Your Market)

Durga—The Fortified city (Infrastructure)

Kosha—The Treasury— (The Finance)

Danda—The Army— (Your Team)

Mitra—The Ally—(Mentor)

With these Sutras, I would give you my detailed Analysis on The Union Budget –2019

I would like to give you all the Meaning of The Union Budget of India—According to Article 112 of the Indian Constitution, the Union Budget of a Year, also referred to as the Annual Financial Statement, is a statement of the estimated receipts & Expenditure of the Government for that Particular Year…Revenue Budget includes the Governments Revenue Receipts & Expenditure.

Why Union Budget is very Important?

The Union Budget aids in controlling the Economic fluctuations as well. It ensures proper handling of Inflation & Deflation, thus bringing about economic stability. During Inflation we surplus Budget Policies are implemented, while Deficit Budget are Schematized during Deflation.

What are the components of Annual Budget?

This includes both Tax Revenue (like Income Tax, Excise duty) & Non—Tax Revenue (like Interest Receipts, Profits). Capital Budget consists of capital Receipts (like Borrowing, Disinvestment0 & Long Period Capital Expenditure (creation of Assets, Investment)

How Budget is Passed in India?

The Budget of India, which is Presented by Finance Bill & the Appropriation bill has to be passed by Lok Sabha before it can come into effect from April 1, the start of India’s Financial Year. An Interim Budget is also not the same as a Vote on Account.

Who Presented the First Budget of Republic India?

The 1st Budget of the Independent India was Presented by the 1st Finance Minister RK Shanmukham Chetty. This was from August15th, 1947—31st March 1948. The Budget estimates for total Revenue was a mere Rs.171.15cr.

Now Let me give you all an Overview of Historic union Budget Presented by Finance Minister, Ms. Nirmala Sitharaman who broke the Tradition of carrying a Briefcase, instead she carried the documents in a four-fold red cloth as the Nation awaited the Presentation of the Union Budget in Parliament today. As per Tradition, Finance Minister Nirmala Sitharaman, called on President Ramnath Kovind before presenting the Union Budget. This shows that our departure from slavery of western thought Process to a “Bahi Khata” (Ledger). A Maiden Budget of Modi Sarkar after winning a huge mandate for a second term in #LokSabha2019 o0n May 23rd. Ahead of the Budget what we witnessed was the Indian Stock Market opened up 0.29% Higher at 40,025.85 Points, the Broader NSE Nifty was also up 0.26% at 11,976.

Nirmala Sitharaman, while Presenting the #Economic Survey had forecast that India’s GDP could get back up to 7% in the current Fiscal but cautioned that it will face challenges. Market Analysts believe that Narendra Modi Led Government will definitely Boost spending in the Current Budget in order to spur Growth. I would also like to clarify regarding the Misinformation about $5Trillion GDP Target in 5yrs 2019-20

Let me give you all the meaning of Nominal GDP-Real GDP+ Inflation= 7% +4%=11%/Year., so the   Compound Growth for 5yrs—60% Multiplied by $3.1Trillion–$4.96 Trillion GDP, I would like to say that Stable Macros will lead to Growth Rate.

Now Regarding the Budget 2019, FM Nirmala Sitharaman, announced a slew of Measures in the Budget to boost the Economy. India is the 6th Largest Economy, she said.” It’s right time to consider increasing Minimum Public Shareholding in the listed companies, I have asked SEBI to consider raising the current threshold of 25% to 35%,” India’s FM informed Parliament during the Budget Speech.

“We will support Private Entrepreneurship in driving value addition to farmers produce & those from allied activities too, like bamboo, timber & also for generating renewable energy”, the FM said during her Budget Speech.

Let me Give you all firstly the Major Takeaways:

In order to Harness India’s Space Ability commercially, a Public Sector Enterprise, New Space India Limited (NSIL) incorporated to tap benefits of ISRO.

#5TrillionBudget:

A maiden Budget which simplifies GST Process. No more Tax Deduction Up to Rs.5lakh Income. Rural India is Government’s Focus, Measures to boost Transparency, Less Populism. Digital Payment leading to Zero Interface. We also find there is Opening up of FDI in Aviation Sector, Animation, & Media.1.5Lakh to be deducted from Income Tax on Housing Loans.

Government’s focus on Middle especially the Neo-Middle Class-Rental Laws to be Amended. Rs.1. Lakh for Every woman in Self Help Groups, thereby boosting women-led Initiatives. Recapitalization of PSUs of Rs.70,000cr. Most important Issue which Nation is facing like a crisis, yes Iam talking about Water Crisis- “Har Ghar Jal” by 2024. Electricity for all by 2022.

Affordable Housing under Pradhan Mantri Awaas Yojana for all by 2022. Now coming to Aadhar which is made easier for NRI without 180days wait at all hereafter. Faceless E-Assessment involving No Human Interface Assessment. Most Important aspect spelt out clearly by FM was that of Open Defecation Free (ODF), by Oct.2nd 2019.

Focus on Education, that too on Par with Global Standards, making Higher Education Available for foreign students to come & avail Education in India. An Overdraft of Rs.5,000 for every Verified Jan Dhan Yojana Account. Women SHG to be expanded in all SHG Districts, & also Rs.1Lakh Loan will be made available to women Entrepreneurs under Interest Subvention Scheme. Start-Ups Get a boost, there will be no Scrutinization process anymore.

Another important aspect is that of 100% FDI for Insurance Intermediaries. Easing of Norms for single Brand Retail. Yes, this was much needed & required too Tax the Super Rich-who will pay more Tax-7%Surcharge for above Rs.5Cr, 3% above 2Cr.This a welcome step by our Finance Minister. Another important takeaway from this Budget is that we find Pension will be extended to Traders too.

Now this was required that we also encourage Investment by Indians apart from Gold, Yes, the Duty on Gold & other Metals Hiked. Investment in Infrastructure, thereby   to more Job opportunities. Government to Invest in Agriculture, making Rural Economy, more dynamic, Private Investment in Agriculture to be encouraged, Rs. 200cr.Allocated for Organic Farming. Now this will definitely raise our Brows, Rs.1 Cess imposed on Petrol & Diesel, we ought to think ourselves through the eyes of Government too for Revenue Generation.

Government also allocated towards Divestment wit a Target set at Rs.1.05Lakh Cr. This Budget has addressed the issue of Reduction of Pollution, especially encouraging the E-Vehicles-Incentives for E-Vehicles, which is indeed a big Push. Labour Laws to be Amended into 4 Codes. Companies with Turnover of Rs.400Cr., to Pay 25% Tax. Social Stock Exchange Board will be set up for 1st time.

Easing of Filing of IT Returns is that PAN, Aadhar Card is not Mandatory. Fertiliser Subsidy Allocated-A hike of Rs.10,000cr., from Rs.70,090 –Rs. &79,996Cr. Yes, most important aspect is that of Inflation, which this government is ably kept under control since its 1st term, Perhaps the target set is to maintain at 3.3%, though Ambitious but not impossible to Achieve. Incentivising & also Investing in Sunrise Sectors-Solar Power, E-Vehicles, indulged in Manufacturing.

Enhancing Skill Development Initiatives under Make in India Initiatives. Rs.350Cr., allocated for 2%, Interest Subvention for all GST-Registered MSME’s on fresh or Incremental loans.100% FDI in Insurance Intermediaries. PM Gram Sadak Yojana Phase 3 envisaged to upgrade 1,25,000 Km of road length over the next 5years. National Highways will be done to ensure the creation of National Highways Grid of desirable capacity.

The Government also envisions using rivers for Cargo Transport, it will also decongest roads & Railways. PPP to be used to unleash faster development & delivery of Passenger Freight Services. FAME2 Scheme to encourage Faster adoption of E-Vehicles by the right incentives & Charging Infrastructure. New RuPay Scheme for Transport. Long-Term Bonds for Markets. Multiple Transport lines with one Card. Bio Metro Line Push for New India. Sagarmala for Road, Rail &b Port Connectivity It meant for “Poor Man’s Transport”. India to enter into Aircraft Financing. India to create Aspirational Jobs in the Aviation Sector too. FM also pushed for setting up of MRO Industry. Annual Global Investors meet to be Organized in India, using National Investment & Infrastructure Fund (NIIF) as the anchor to get key sets of global players to come & Invest in India. Expansion of Swachh Bharat Mission to Sundar Bharat & Sustainable Solid Waste Management in every Village. Government to set up Sports Board under Khelo India.

Friends, I just gave you all Above A bird’s Eye view of The Union Budget-2019, Now let me Analyse in a detailed Manner.

I Feel Friends instead of criticizing every move of Government’s Honest Intent, we ought to take what is good offered to the citizens by Modi Sarkar which came with huge mandate in recent General Elections. One of the few things Business could be happy about is the reduction in the Tax Rate to 25% for companies with Annual Turnover up to Rs.400Cr. FM Ms. Nirmala Sitharaman’s Maiden Budget is not an Exercise towards Populism but Focussed more towards Transparency & Accountability. There are only Good things about it, lets Analyse those things firstly, it somehow remains committed towards Fiscal Prudence, & Second it Persists with Infrastructure Development. Yes, it does aim to bring down the deficit from 3.4 to 3.3% of the Gross Domestic Product. The Budget also intends to boost Infrastructure Development. This means that to shore up revenue like the Rs.2/litre Cess on Petrol& Diesel are not very good but definitely Deficit Target will be achieved. As it is, Petroleum Products, which are outside the GST net, are highly Taxed: now the Tax Incidence will further increase. The Government has also thrashed concerns over Inflation 0n account of the cascading effects of Costlier Diesel. Then you also see that there is a Hike in the Surcharge on HNIS-High Net Worth Individuals, those having taxable income from Rs.2Cr to Rs.5Cr. & above. This move will definitely not endear the Rich; it is also likely to dampen the enthusiasm of the investing community towards India, but this definitely reflects the Honest Intent of Modi Sarkar concerned more towards the feelings of the Poor & Down Trodden.

The Budget talks lot for Poor—A Pro-Poor Budget—

Sitharaman came up with a New Slogan-Gaon, Garib, Aur Kisan. Her Speech spelt out the needs for Poor class. The Government Aspires to make India a $5Trillion Economy: building Team India with Jan Bhagidari: Minimum Government Maximum Governance; Achieving Green Mother Earth & Blue Skies through a Pollution-free India; Making Digital India reach every Sector; People’s hearts filled with Asha(hope), Vishwas(Trust),Akanksha(Aspirations); Annadata(Farmer) can also be Urjadata. The other aspect she brought out in her Budget Speech was, setting up of livelihood Business Incubators, 75,000 Entrepreneurs to be skilled in Agro-Rural Industry sectors; 10,000 new farmer Producer organizations to be formed; letting Farmers benefit from e-NAM; Zero Budget Farming. Under Pradhan Mantri Karam Yogi Maandhan Scheme, Pension benefits to about 3crretail traders & small shopkeepers with annual turnover less than Rs.1.5cr, Rs.350Cr allocated for 2019-20 for 2% Interest Subvention scheme (On Fresh or Incremental Loans) to all GST-Registered MSMEs to be created to enable filing of Bills & Payments thereof, to eliminate delays in Government Payments. One of the business could be happy could be is the reduction in the Tax Rate to 25% for companies up to Rs. 400Cr.Smaller firms will benefit from the Interchangeability of PAN & Aadhar; those who don’t have the PAN can use the Aadhar for filing Tax Returns. Aadhar can hitherto be used wherever PAN is required.

There are Certain Items which have become costlier are—Cashew Kernels, PVC, Tiles, Auto Parts, Marble Slabs, Optical Fibre, Cable, CCTV Camera etc. Exemptions from Customs duty on certain Electronic Items now Manufactured in India have been withdrawn. Bank Privatization is not on the Agenda, was made very clear by Subhash Garg, Finance Secretary, at the press conference after tabling of the Budget in Parliament. In Fact, the Government has committed Rs.70,000Cr., towards Recapitalization of Public Sector Banks. Disinvestment in Public Sector undertakings, however is very much there, with the Government pegging the Target for the current Fiscal at Rs.105,000Cr. The Government also looks very committed towards Infrastructure Push. Ms. Sitharaman also pointed out in her Budget speech that Railway Infrastructure alone would need an investment of Rs.50Lakh Cr., between 2019-2030.The measures she is focusing are related to borrowing as such. Credit Guarantee Enhancement Corporation will be set up in 2019-20. An action Plan will be devised to deepen the market for long-term bonds with focus on Infrastructure. It’s also proposed to permit Investments made by FIIs/FPIs in debt securities to be transferred/sold to any domestic investor within specified lock-in period.

Many Industry Experts say the Focus of this year’s Budget is on Stimulating Growth, Promoting Affordable Housing for all, & Incentivising Digital Economy. Capital Infusion in PSU Banks, Partial Credit Guarantee for High-rated Asset Pools of Strong NBFCs & credit Flow to MSME Segments. The Proposal to levy 2% TDS on cash withdrawal beyond Rs.1Cr., /Account in a year will discourage cash transactions & Promote Digital Payments.

Whatever be it the Budget did Succeed in giving some Incentives to Common Man, Let’s See what are those?

1.Impetus to Affordable Housing

2. Tax Incentives for E-vehicles

This deduction up to Rs.1.5Lakh will be available under a new Section 80EEB in the I-T Act & will be given from April 2020.The Loan, however needs to be availed between 1st April 2019 & 31st March2023 from a financial Institution.

3. Important changes Proposed with regard to filing of ITR-Aggregate deposits exceeding Rs.1cr., in a current Account or accounts maintained by bank/Co-operative bank.

Aggregate Travel Expenditure exceeding Rs.2Lakh to a foreign country for himself or any other person.

Aggregate Expenditure exceeding Rs.1Lakh towards Electricity Consumption.

Any other Prescribed Expenditure.

4.Incentives to NPS Subscribers—There will be a Hike in Exemption limit of 40% to 60% of the total amount payable to person, Thus, with the NPS withdrawals have been made completely-Tax Free from 1st April 2020.

5. Inter-Changeability of PAN & Aadhar

6.Rental Housing Policy to be in Place.

Modi Sarkar also plans to boost Tourism with development of 17 Iconic Tourist spots, to encourage the arrival of tourists in India. These 17 sites will be transformed into world-class Destinations to boost the Tourist Influx.” One Hundred New Clusters will be set up in 2019-20 to enable 50,000 artisans to come into Economic value chain”. She also added that Government will take all measures to ensure that the rich Tribal culture of the country is preserved. FM also stressed the need of Technological infusion in Tourism & said that Tribal Repository will be created, in which Photos, videos, details of origin, education, lifestyle, skill sets traditional, arts & other Anthropological information about the Tribe & Tourist site will be stored. Ramayana Circuit has been identified for development under the Swadesh Darshan scheme of Ministry of Tourism. This circuit is among the 15 thematic circuits.

PM Modi called this Budget as a “Green Budget” & said that it is the Budget that 21st century India needs. Other than Tourism the Budget 2019-20 also has policies which encourages Energy Conservation & Sustainable development.

As I Conclude my Viewpoints with Limited Knowledge, Experience, & Expertise, I feel this is a very Futuristic Budget for Bharat & Bharatvasis. A Vision statement well spelt out for SABKA SAATH SABKA VIKAS AUR SABKA VISHWAS. This Budget is for New India for next decade which envisages a roadmap for 360-degree Balanced Regional development of all Sectors thereby moving towards $5Trillion Economy. A Budget which spells out the Honest Intent of the Government of the Day & its Deliverables as they have already delivered through their Pro-Vikas Agendas instituted & Implemented for 132 cr. Indians upliftment, which PM Modi has done in his 1st Term, the reason Bharatvasis has Re-Elected him as PM of the Nation once again for fulfilling their Aspirations into Reality. From My side, Kudos to FM Ms. Nirmala Sitharaman & Team…

The Mission & Vision statement of our PM Modi to reach to the Grassroots with his Agendas through this Union Budget-Sabka Budget.

Salutations to our Brave Warriors

Dr.S. Sukanya Iyer

Jai Hind

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