GS 3: Economy

Why in News?

The key highlights of the Interim Budget 2019-20 presented by the Union Minister for Finance.

Farmers:

• 12 crore small and marginal farmers to be provided with assured yearly income of Rs. 6000 per annum under PM-KISAN. Outlay of Rs. 75,000 crore for FY 2019-20 with additional Rs. 20,000 crore in RE 2018-19.
• Outlay for Rashtriya Gokul mission increased to Rs 750 crore.
• Rashtriya Kamdhenu Ayog to be setup for sustainable genetic up-gradation of the Cow resources
• New separate Department of Fisheries for welfare of 1.5 crore fishermen
• 2% interest subvention to Farmers for Animal husbandry and Fisheries activities; additional 3% in case of timely repayment.
• Interest subvention of 2% during disaster will now be provided for the entire period of reschedulement of loan.

Labour:

• Pradhan Mantri Shram Yogi Maandhan scheme to ensure fixed monthly pension to 10 crore unorganized sector workers
• Rs 3000 per month after 60 years of age with an affordable contribution of only Rs 100/55 per month

Health:

22nd AIIMS to be setup in Haryana

Direct Tax proposals:

Income upto Rs. 5 lakh exempted from Income Tax

More than Rs. 23,000 crore tax relief to 3 crore middle class taxpayers

Standard Deduction to be raised to Rs. 50,000 from Rs. 40,000

TDS threshold to be raised from Rs. 10,000 to Rs. 40,000 on interest earned on bank/post office deposits. Existing rates of income tax to continue

Tax exempted on notional rent on a second self-occupied house. Housing and real estate sector to get boost-

TDS threshold for deduction of tax on rent to be increased from Rs. 1,80,000 to Rs. 2,40,000

Benefit of rollover of capital gains increased from investment in one residential house to two residential houses for capital gains up to Rs. 2 crores.

Tax benefits for affordable housing extended till 31st March, 2020 under Section 80-IBA of Income Tax Act.

Tax exemption period on notional rent, on unsold inventories, extended from one year to two years

Fiscal Programme:

• Fiscal deficit pegged at 3.4% of GDP for 2019-20
• Target of 3% of fiscal deficit to be achieved by 2020-21.
• Fiscal deficit brought down to 3.4% in 2018-19 RE from almost 6% seven years ago

Poor and Backward Classes:

• 25% additional seats in educational institutions to meet the 10% reservation for the poor
• Targeted expenditure to bridge urban-rural divide & to improve quality of life in villages
• All willing households to be provided electricity connections by March 2019

North East:

• Allocation to be increased by 21% to Rs. 58,166 crores in 2019-20 BE over 2018-19 BE
• Arunachal Pradesh came on the air map recently. Meghalaya, Tripura and Mizoram came
  on India’s rail map for the first time.
• Container cargo movement through improved navigation capacity of the Brahmaputra

Vulnerable sections:

A new committee under NITI Ayog to identify all the remaining De-notified nomadic and semi-Nomadic tribes. New Welfare development Board under Ministry of social justice and empowerment for development and welfare of De-notified nomadic and semi nomadic tribes

Defence:

Defence budget to cross Rs 3,00,000 crore for the first time ever

Railways:

• Capital support of Rs.64,587 crore proposed in 2019-20 (BE) from the budget
• Overall capital expenditure programme to be of Rs. 1,58,658 crores
• Operating Ratio expected to improve from 98.4% in 2017-18
• to 96.2% in 2018-19 (RE) and
• to 95% in 2019- 20 (BE)

Entertainment Industry:

• Indian filmmakers to get access to Single window clearance as well for ease of shooting films. Regulatory provisions to rely more on self-declaration
• To introduce anti-camcording provisions in the Cinematograph Act to control piracy

MSME and Traders:

• 2% interest subvention on an incremental loan of Rs 1 crore for GST registered SMEs
• Atleast 3% of the 25% sourcing for the Government undertakings will be from women owned SMEs. Renewed Focus on Internal trade; DIPP renamed to Department for Promotion of Industries and Internal trade

Digital Villages:

The Government to make 1 lakh villages into Digital Villages over next five years

Other Announcement(s):

• New National Artificial Intelligence portal to support National Program on Artificial Intelligence
  

  Key message in the Interim Budget 2019-20:

• Moving towards realizing a ‘New India’ by 2022 –
• Clean and healthy India with universal access to toilets, water and electricity to all. An India where Farmers’ income would have doubled Ample opportunities to youth and women to fulfil their dreams.
• An India free from terrorism, communalism, casteism, corruption and nepotism
• Vision for the next Decade:
• Foundation for India’s growth and development laid in the past 5 years
• Poised to become a Five Trillion Dollar Economy in the next five years
• Aspire to become a Ten Trillion Dollar Economy in the next 8 years thereafter
• Ten dimensions of Vision for India of 2030:
• India would be a modern, technology driven, high growth, equitable and transparent society.
• To build physical as well as social infrastructure and to provide ease of living
• To create a Digital India, digitize government processes with leaders from youth
• Making India pollution free by leading transport revolution with Electric Vehicles and focus on Renewables
• Expanding rural industrialisation using modern digital technologies to generate massive employment
• Clean Rivers, safe drinking water to all Indians and efficient use of water through micro-irrigation
• Besides scaling up of Sagarmala, Coastline and Ocean waters powering India’s
  development and growth
• Aim at our space programme – Gaganyaan, India becoming the launch-pad of satellites for the World and placing an Indian astronaut into space by 2022
• Making India self-sufficient in food, exporting to the world to meet their food needs and producing food in the most organic way
• A healthy India via Ayushman Bharat with women having equal rights and concern for their safety and empowerment
• Transforming India into a Minimum Government Maximum Governance nation with pro- active and responsible bureaucracy