Budget 2020
Sanchit Jain
CA | Finance PhD @ IIM-B | Corporate Finance Research |Mutual Funds | Text Analysis | Educator | Personal Finance & Investment Trainer | Consulting
Budget to boost income and enhance purchasing power. Focus on structural reforms.
3 themes of budget:
Fiscal Scenario
a. FY20- GFD estimated at 3.8% v/s the target 3.3%: Shortfalls owing to cut in corporate tax rate and lower GST collections
b. FY21- GFD likely to be 3.5% v/s fiscal glide path target of 3%: funding to be met through market borrowings and divestments.
c. Outstanding debt as a percentage of GDP estimated to be 50.1% for FY21 v/s/ 50.3% in FY20
Key Highlights:
a. Bank Insurance coverage increased to 5 lakh from existing 1 lakh
b. Individual Tax: New tax regime introduced (optional) with more tax slabs, foregoing deductions and exemptions
c. Corporate Tax: Dividend distribution tax removed, dividend will now be taxed in hands of individuals at applicable rates
d. Government plans to sell stake in LIC through IPO as part of the government disinvestment initiative
e. New Debt ETF comprising primarily of government securities to deepen the bond market.
