Let's be the Sorting Hat for Madam Finance Minister's maiden Budget 2019 for UoI

This year’s budget has invoked myriad responses amongst experts. The assessment is based on complex parameters and simply the relief contours cannot be the sole criteria. The cause-effect semblance has to be evaluated on the basis of both long term economy and short term fiscal year goals. Here is what we think is good, bad, or the poker face scheme: 

The Budget is somewhat balanced by populist demands and the measures to tackle the slowing economy. Few measures were also taken with a deliberate attempt to address the concerns which the business community at large has been raising.

This Government deserves every bit of credit for taking steps to tackle the issue of corruption, financial frauds and white collar crimes, which by its own admission, was rampant in the Income Tax Department as well. The FM referred to the formation of Central Cell which will be the single point of contact between the taxpayer and the department. This would be generally applicable for scrutiny assessment cases.

The government has made a budgetary allocation of INR 70,000 crore for further investment in the public sector banks to boost credit for a strong impetus to the economy. Measures to promote investments in NBFC have also been announced. It is proposed to raise sovereign debt in foreign currency for the first time. Further, it is proposed to liberalise FDI regulations for several restricted sectors.

The government has made an outlay of INR 10,000 crore over the next three years for the scheme to incentivise the purchase of electric vehicles. Tax benefits have also been announced to promote the manufacturing and purchase of electric vehicles.

The Government has introduced a "Sabka Vishwas Legacy Dispute Resolution scheme". This is a dispute resolution cum amnesty scheme for resolution and settlement of legacy cases of Central Excise and Service tax.

Summarising the highlights :

Taxes :

• No change in personal income tax rates.
• Increase in cess on fuel by 1 rupee, petrol & diesel to get costlier; while Customs duty on gold and precious items increased.
• Interchangeability of PAN and Aadhaar for ITR for those who don't have PAN cards. 
• GST Council to reduce the tax rate on EVs from 12 per cent to 5 per cent. 
• Duty has been raised on: tiles, cashew kernels, vinyl flooring, auto parts, some synthetic rubber, digital and video recorder and CCTV camera. 

To promote digital payments:

• 2% TDS on withdrawals of Rs 1 crore in a year from your bank account for business payments. Inter-operable One Nation One transport card: ATM-like Transport card for universal travel on various modes of transport (metro, road, railways etc) 
• Charge on digital payments: MDR charges waived on cashless payment. 

Transportation:

• Inter-operable One Nation One transport card: ATM-like Transport card for universal travel on various modes of transport (metro, road, railways etc). 
• Govt plans to create MRO (Manufacturing, Repair and Operate) industry. 
• PPP to be used to unleash faster development and the delivery of passenger freight services.

Economy:

• Fiscal deficit in FY 19 at 3.3% of the GDP. 
• Govt will start raising part of borrowing in foreign currency. 
• Govt external debt to GDP is among the lowest in the world. 

Women empowerment:

• Nari tu Narayani: Women SHG Interest Subvention Programme to be expanded to all districts in India.
• Every verified woman SHG member having a Jan Dhan account can avail Rs 5,000 rupees overdraft facility. 
• Rs 1 lakh loan to be provided for SHG women members under Mudra Scheme 

Banking reform:

• On purchase of high-rate pooled assets of NBFC amounting of Rs 1 lakh crore in this FY, govt will provide one-time 6-month credit guarantee. 
• Propose to provide 70000 Crore INR capital to PSU Banks
• Regulation of HFCs (Housing Finance Cos) to move to RBI from National Housing Bank. 

Disinvestment:

• Govt to modify the present policy of retaining 51% stake in PSUs. 
• Govt to continue with strategic divestment of select CPSEs. 
• Divestment target of Rs 1.05 lakh crore for FY 20. 
• Strategic disinvestment of Air India proposed to be re-initiated. 

The Concern Bits :

Sitharaman said the govt would consider raising minimum public shareholding in the listed firms to 35% from 25% at present. Analysts say many MNCs listed on Indian bourses may consider delisting if increase public shareholding is implemented. In the case of many midcap and smallcap stocks it was better to have more promoter skin in the game since India's capital market is in a developing phase.

Under a phased reduction plan for corporate taxes, the budget proposed to bring under 25% tax ambit companies with an annual turnover of up to Rs 400 crore, in place of the earlier cap of Rs 250 crore. The move came under criticism from experts who said the tax rejig should have been applicable to all companies and not just a select section 

The budget turned out to be a big damp squib for the armed forces. At a time when India's security risks are at an all-time high, no specific mention of the forces came as a major dampener for both the forces and the country at large.