Union Budget 2019 – Highlights

Taking a pragmatic approach, Finance Minister Nirmala Sitharaman announced no changes in personal income tax rates but levied additional surcharge on the super-rich. She also sought to spur growth with reduction in corporate tax and sops to housing sector, startups and electric vehicles.

Among key announcements, Finance Minister said digital payments will get cheaper, government will launch an ATM-like One Nation One Card for pan-India travel and a new model rental laws will be unveiled to boost affordable housing.

Here are the key Highlights from the Finance Minister’s speech

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
• 3% surcharge hike on an income of Rs 2 crore; 7% on Rs 5 crore and above.
• Corporate tax with turnover of up to Rs 400 crore slashed to 25 per cent from a current rate of 30 per cent.
• Interchangeability of PAN and Aadhaar for ITR for those who don’t have PAN cards.
• Advises GST Council to reduce 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.

Affordable Housing

1. Rental laws to be reformed. Modern tenancy laws will be shared with states to promote house renting.
2. Additional Rs 1.5 lakh tax relief on home loan for purchase of a house up to Rs 45 lakh.
3. To promote digital payments:
4. 2% TDS on withdrawals of Rs 1 crore in a year from your bank account for business payments.
5. No charge on digital payments: MDR charges waived on cashless payment.

MSME

1. Propose easing angel tax for startups.
2. Angel tax: Won’t require scrutiny from I-T department for startup.
3. E-verification mechanism for establishing investor identity and source of funds for startups.
4. 2% interest subvention for GST-registered MSME on fresh or incremental loans.
5. ‘Stand Up India’ Scheme to continue till 2025.
6. New television channel for start-ups.
7. Pension benefit extended to retail traders with annual turnover less than Rs 1.5 crore.
8. New payment platform for MSMEs to be created.

Investment

• Existing KYC norms for FPIs to be rationalized and simplified to make it more investor-friendly.
• Long-term bonds for market.
• To allow FIIs & FPIs investment in debt securities issued by NBFCs.
• Credit Guarantee Enhancement Corporation to be set up long-term bonds with specific focus on infra sector
• Propose Social Stock Exchange under SEBI for listing social enterprises & voluntary organisations.
• To merge NRI portfolio route with FPI route.
• To hike statutory limit for foreign investment in some companies.
• To set up a credit guarantee enhancement corporation.
• Government will take up measures to make RBI & SEBI depositories inter-operable.
• SEBI to mull increasing minimum public shareholding to 35% from 25%.
• User friendliness of trading platforms for corporate bonds will be reviewed, including issues arising out of capping of International Securities Identification Number.
• To deepen corporate tri-party repo market in corporate debt securities. Plan to enable stock exchanges to allow AA rated bonds as collateral.
• Annual Global Investors’ Meet for attracting global players to come and invest in India.
• To allow FPIs to subscribe to listed debt papers of REITs.

Ease of Living

• Aadhaar card for NRIs on arrival in India.
• Rs 3,000 pension per month for workers from the informal sector.

Transportation

• Inter-operable One Nation One transport card: ATM-like Transport card for universal travel on various modes of transport (metro, road, railways etc).
• Government plans to create MRO (Manufacturing, Repair and Operate) industry.
• PPP to be used to unleash faster development and the delivery of passenger freight services.
• Comprehensive restructuring of National Highways Programme for creation of National National Highways Grid.
• Government envisions using rivers for cargo transport to decongest roads and railways.

Economy

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

Women Empowerment

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

Banking Reform

• On purchase of high-rate pooled assets of NBFC amounting of Rs 1 lakh core in this FY, Government will provide one–time 6 month credit guarantee.
• Propose to provide Rs 70,000 crore capital for PSU Banks.
• Regulation of HFCs (Housing Finance Cos) to move to RBI from National Housing Bank.

Divestment

• Government to modify present policy of retaining 51% stake in PSUs.
• Government 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.

Railways

• Budgetary allocation of Rs 65,837 crore and the highest ever outlay for capital expenditure amounting to Rs 1.60 lakh crore for railways.
• A new PPP model will usher in the new dawn of Indian railways.
• Government to complete the dedicated freight corridor project by 2022.
• Railways to be encouraged to invest more in suburban rail network via SPVs.
• Railway infrastructure will need an investment of Rs 50 lakh crore between 2018 and 2030.
• Massive programme for modernisation of railway stations to be launched in 2019

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