Budget 2019: Here are the highlights

Finance Minister Nirmala Sitharaman presented her maiden budget on Friday before the Parliament. Here are the key highlights of the Union budget 2019: 

Pension

Pension benefits to about three crore retail traders and small shopkeepers with annual turnover less than Rs 1.5 crore.

Enrolment to be kept simple, requiring only Aadhaar, bank account and a self-declaration.

MSMEs

Rs 350 crore allocated for FY 2019-20 for 2% interest subvention (on fresh or incremental loans) to all GST-registered MSMEs, under the Interest Subvention Scheme for MSMEs

Payment platform for MSMEs to be created to enable filing of bills and payment thereof, to eliminate delays in government payments.

Navigational capacity of Ganga to be enhanced via multi-modal terminals at Sahibganj and Haldia and a navigational lock at Farakka by 2019-20, under Jal Marg Vikas Project.

Railways 

Rs 50 lakh crore investment needed in Railway Infrastructure during 2018-2030.

Public-Private-Partnership proposed for development and completion of tracks, rolling stock manufacturing and delivery of passenger freight services.

Policy interventions to be made for the development of Maintenance, Repair and Overhaul (MRO), to achieve self- reliance in aviation segment.

Aviation

Regulatory roadmap for making India a hub for aircraft financing and leasing activities from Indian shores, to be laid by the government

Electric Vehicles

Outlay of Rs 10,000 crore for 3 years approved for Phase-II of FAME Scheme.

Upfront incentive proposed on purchase and charging infrastructure, to encourage faster adoption of electric vehicles.

Only advanced-battery-operated and registered e-vehicles to be incentivized under FAME Scheme.

Additional income tax deduction of Rs. 1.5 lakh on interest paid on electric vehicle loans.

Customs duty exempted on certain parts of electric vehicles.

Infrastructure

National Highway Programme to be restructured to ensure a National Highway Grid, using a financeable model.

Power at affordable rates to states ensured under ‘One Nation, One Grid’.

Blueprints to be made available for gas grids, water grids, i-ways, and regional airports.

Cross subsidy surcharges, undesirable duties on open access sales or captive generation for industrial and other bulk power consumers to be removed under Ujjwal DISCOM Assurance Yojana (UDAY).

Package of power sector tariff and structural reforms to be announced soon.

Housing 

Reform measures to be taken up to promote rental housing.

Model Tenancy Law to be finalized and circulated to the states.

Joint development and concession mechanisms to be used for public infrastructure and affordable housing on land parcels held by the Central Government and CPSEs.

Additional deduction up to Rs. 1.5 lakhs for interest paid on loans borrowed up to 31st March, 2020 for purchase of house valued up to Rs. 45 lakh. Overall benefit of around Rs. 7 lakh over loan period of 15 years.

Infrastructure financing

Credit Guarantee Enhancement Corporation to be set up in 2019-2020.

Action plan to be put in place to deepen the market for long term bonds with focus on infrastructure.

Proposed transfer/sale of investments by FIIs/FPIs (in debt securities issued by IDF-NBFCs) to any domestic investor within the specified lock-in period.

Measures to deepen bond markets:

Stock exchanges to be enabled to allow AA rated bonds as collaterals.

User-friendliness of trading platforms for corporate bonds to be reviewed.

Social stock exchange

Electronic fund raising platform under the regulatory ambit of SEBI.

Listing social enterprises and voluntary organizations.

To raise capital as equity, debt or as units like a mutual fund.

SEBI to consider raising the threshold for minimum public shareholding in the listed companies from 25% to 35%.

Know Your Customer (KYC) norms for Foreign Portfolio Investors to be made more investor friendly.

Government to supplement efforts by RBI to get retail investors to invest in government treasury bills and securities, with further institutional development using stock exchanges.

FDI, business

Measures to make India a more attractive FDI destination

FDI in sectors like aviation, media (animation, AVGC) and insurance sectors can be opened further after multi-stakeholder examination.

Insurance Intermediaries to get 100% FDI.

Local sourcing norms to be eased for FDI in Single Brand Retail sector.

Government to organize an annual Global Investors Meet in India, using National Infrastructure Investment Fund (NIIF) as an anchor to get all three sets of global players (pension, insurance and sovereign wealth funds).

Statutory limit for FPI investment in a company is proposed to be increased from 24% to sectoral foreign investment limit. Option to be given to the concerned corporate to limit it to a lower threshold.

FPIs to be permitted to subscribe to listed debt securities issued by ReITs and InvITs.

NRI-Portfolio Investment Scheme Route is proposed to be merged with the Foreign Portfolio Investment Route.

Cumulative resources garnered through new financial instruments like Infrastructure Investment Trusts (InvITs), Real Estate Investment Trusts (REITs) as well as models like Toll-Operate-Transfer (ToT) exceed Rs 24,000 crore.

Space research

New Space India Limited (NSIL), a PSE, incorporated as a new commercial arm of Department of Space.

To tap the benefits of the Research & Development carried out by ISRO like commercialization of products like launch vehicles, transfer to technologies and marketing of space products.

Direct Taxes

Tax rate reduced to 25% for companies with annual turnover up to Rs 400 crore

Surcharge increased on individuals having taxable income from Rs. 2 crore to Rs. 5 crore and Rs. 5 crore and above.  

India’s Ease of Doing Business ranking under the category of ‘paying taxes’ jumped from 172 in 2017 to 121 in the 2019.

Direct tax revenue increased by over 78% in past 5 years to Rs. 11.37 lakh crore

Tax simplification and ease of living

Interchangeability of PAN and Aadhaar: Aadhaar can be used wherever PAN is required.

Pre-filling of Income-tax Returns for faster, more accurate tax returns

Pre-filled tax returns with details of several incomes and deductions to be made available.

Faceless e-assessment with no human interface to be launched. To be carried out initially in cases requiring verification of certain specified transactions or discrepancies.

Other direct tax measures

Higher tax threshold for launching prosecution for non-filing of returns

Appropriate class of persons exempted from the anti-abuse provisions of Section 50CA and Section 56 of the Income Tax Act.

Relief for Start-ups

Capital gains exemptions from sale of residential house for investment in start-ups extended till FY21.

‘Angel tax’ issue resolved- start-ups and investors filing requisite declarations and providing information in their returns not to be subjected to any kind of scrutiny in respect of valuations of share premiums.

Funds raised by start-ups to not require scrutiny from Income Tax Department

E-verification mechanism for establishing identity of the investor and source of funds.

Special administrative arrangements for pending assessments and grievance redressal

No inquiry in such cases by the Assessing Officer without obtaining approval of the supervisory officer.

No scrutiny of valuation of shares issued to Category-II Alternative Investment Funds.

Relaxation of conditions for carry forward and set off of losses.

A television program proposed exclusively for and by start-ups, within the DD bouquet of channels.

Stand-Up India Scheme to be continued for the period of 2020-25. The Banks to provide financial assistance for demand based businesses.

NBFCs

Interest on certain bad or doubtful debts by deposit taking as well as systemically important non-deposit taking NBFCs to be taxed in the year in which interest is actually received.

Indirect taxes

Basic customs duty increased on 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 withdrawn.

End-use based exemptions on palm stearin, fatty oils withdrawn.

Exemptions to various kinds of papers withdrawn.

5% basic customs duty imposed on imported books.

Customs duty reduced on certain raw materials such as: inputs for artificial kidney and disposable sterilised dialyser and fuels for nuclear power plants, etc.

Capital goods required for manufacture of specified electronic goods.

Defence

Defence equipment not manufactured in India exempted from basic customs duty

Other Indirect Tax provisions

Export duty rationalised on raw and semi-finished leather

Increase in Special Additional Excise Duty and Road and Infrastructure Cess each by Rs. 1 per litre on petrol and diesel

Custom duty on gold and other precious metals increased

Legacy Dispute Resolution Scheme for quick closure of pending litigations in Central Excise and Service tax from pre-GST regime

Rural India

Ujjwala Yojana and Saubhagya Yojana have transformed the lives of every rural family, dramatically improving ease of their living.

Electricity and clean cooking facility to all willing rural families by 2022.

Pradhan Mantri Awas Yojana – Gramin (PMAY-G) aims to achieve "Housing for All" by 2022:

Eligible beneficiaries to be provided 1.95 crore houses with amenities like toilets, electricity and LPG connections during its second phase (2019-20 to 2021-22).

Pradhan Mantri Matsya Sampada Yojana (PMMSY): A robust fisheries management framework through PMMSY to be established by the Department of Fisheries to address critical gaps in the value chain including infrastructure, modernization, traceability, production, productivity, post-harvest management, and quality control.

Pradhan Mantri Gram Sadak Yojana (PMGSY): Target of connecting the eligible and feasible habitations advanced from 2022 to 2019 with 97% of such habitations already being provided with all weather connectivity.

30,000 kilometers of PMGSY roads have been built using Green Technology, Waste Plastic and Cold Mix Technology, thereby reducing carbon footprint.

1,25,000 kilometers of road length to be upgraded over the next five years under PMGSY III with an estimated cost of Rs. 80,250 crore.

Scheme of Fund for Upgradation and Regeneration of Traditional Industries’ (SFURTI): Common Facility Centres (CFCs) to be setup to facilitate cluster based development for making traditional industries more productive, profitable and capable for generating sustained employment opportunities.

100 new clusters to be setup during 2019-20 with special focus on Bamboo, Honey and Khadi, enabling 50,000 artisans to join the economic value chain.

Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship’ (ASPIRE) consolidated.

80 Livelihood Business Incubators (LBIs) and 20 Technology Business Incubators (TBIs) to be setup in 2019-20.

75,000 entrepreneurs to be skilled in agro-rural industry sectors.

Private entrepreneurships to be supported in driving value-addition to farmers’ produce from the field and for those from allied activities.

Dairying through cooperatives to be encouraged by creating infrastructure for cattle feed manufacturing, milk procurement, processing & marketing.

10,000 new farmer producer organizations to be formed, to ensure economies of scale for farmers.

Government to work with state governments to allow farmers to benefit from e-NAM.

Zero-budget farming in which few states’ farmers are already being trained to be replicated in other states.

India’s water security

New Jal Shakti Mantralaya to look at the management of our water resources and water supply in an integrated and holistic manner

Jal Jeevan Mission to achieve Har Ghar Jal (piped water supply) to all rural households by 2024: to focus on integrated demand and supply side management of water at the local level.

Convergence with other Central and State Government Schemes to achieve its objectives.

Urban India

Rashtriya Swachhta Kendra to be inaugurated at Gandhi Darshan, Rajghat on 2nd October, 2019.

Gandhipedia being developed by National Council for Science Museums to sensitize youth and society about positive Gandhian values.

Railways to be encouraged to invest more in suburban railways through SPV structures like Rapid Regional Transport System (RRTS) proposed on the Delhi-Meerut route.

Proposal to enhance the metro-railway initiatives by

Youth

New National Education Policy to be brought 

National Research Foundation (NRF) proposed

Rs 400 crore provided for “World Class Institutions”, for FY 2019-20, more than three times the revised estimates for the previous year

‘Study in India’ proposed to bring foreign students to study in Indian higher educational institutions.

Regulatory systems of higher education to be reformed comprehensively:

Draft legislation to set up Higher Education Commission of India (HECI), to be presented.

Khelo India Scheme to be expanded with all necessary financial support.

National Sports Education Board for development of sportspersons to be set up under Khelo India, to popularize sports at all levels

Set of four labour codes proposed, to streamline multiple labour laws to standardize and streamline registration and filing of returns.

Women

Approach shift from women-centric-policy making to women-led initiatives and movements.

A Committee proposed with Government and private stakeholders for moving forward on Gender budgeting.

Women SHG interest subvention program proposed to be expanded to all districts.

Overdraft of Rs. 5,000 to be allowed for every verified women SHG member having a Jan Dhan Bank Account.

One woman per SHG to be eligible for a loan up to Rs. 1 lakh under MUDRA Scheme.

India’s Soft Power

Proposal to consider issuing Aadhaar Card for NRIs with Indian Passports on their arrival without waiting for 180 days.

Mission to integrate traditional artisans with global markets proposed, with necessary patents and geographical indicators.

18 new Indian diplomatic Missions in Africa approved in March, 2018, out of which 5 already opened. Another 4 new Embassies intended in 2019-20.

Revamp of Indian Development Assistance Scheme (IDEAS) proposed.

17 iconic tourism sites being developed into model world class tourist destinations.

Present digital repository aimed at preserving rich tribal cultural heritage, to be strengthened.

Banking and financial sector

Rs 70,000 crore proposed to be provided to PSBs to boost credit.

PSBs to leverage technology, offering online personal loans and doorstep banking, and enabling customers of one PSBs to access services across all PSBs.

Steps to be initiated to empower accountholders to have control over deposit of cash by others in their accounts.

Reforms to be undertaken to strengthen governance in PSBs.

Proposals for strengthening the regulatory authority of RBI over NBFCs to be placed in the Finance Bill.

Requirement of creating a Debenture Redemption Reserve will be done away with to allow NBFCs to raise funds in public issues.

Steps to allow all NBFCs to directly participate on the TReDS platform.

Return of regulatory authority from NHB to RBI proposed, over the housing finance sector.

Rs 100 lakh crore investment in infrastructure intended over the next five years. Committee proposed to recommend the structure and required flow of funds through development finance institutions.

Steps to be taken to separate the NPS Trust from PFRDA.

Reduction in Net Owned Fund requirement from Rs. 5,000 crore to Rs. 1,000 crore  proposed:

To facilitate on-shoring of international insurance transactions.

To enable opening of branches by foreign reinsurers in the International Financial Services Centre.