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)
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 &
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
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.
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.
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 &
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
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
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
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
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
Salutations to our Brave Warriors
Dr.S. Sukanya Iyer
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.
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