BUDGET 2020-2021 BY ANUKRUTI

CHATURVEDI
 ECONOMIC
DEVELOPMENT FOR
ALL
“Sabka Saath,
Sabka Vikas,
Sabka Vishwas”
CARING SOCIETY
Both humane and
compassionate ;
Antyodaya as an
article of faith.

Three broad themes are held together by

Corruption free, policy-driven Good Governance
Clean and sound Financial sector.
Ease of Living underlined by the three themes of Union Budget 2020-21.
3 components of
Aspirational
India
• AGRICULTURE, IRRIGATION AND RURAL DEVELOPMENT
• WELLNESS, WATER AND SANITATION
• EDUCATION AND SKILLS
• Sixteen Action Points for Agriculture,
Irrigation and Rural Development Rs.
2.83 lakh crore to be allocated for the
following 16 Action Points
(a) Rs. 1.60 lakh crore for Agriculture,
Irrigation & allied activities.
(b) Rs. 1.23 lakh crore for Rural
development & Panchayati Raj.
• Agriculture credit
(a) Rs. 15 lakh crore target set for the
year 2020-21.
(b) PM-KISAN beneficiaries to be covered
under the KCC scheme
(c) NABARD Re-finance Scheme to be
further expanded.
• Comprehensive measures for 100 water-
stressed districts proposed.
BLUE ECONOMY Kisan Rail to be setup by Indian Railways through PPP
• Rs.1 lakh crore fisheries’ exports to be achieved by 2024- • To build a seamless national cold supply chain for perishables
25. (milk, meat, fish, etc.)
• Rs.200 lakh tonnes fish production targeted by 2022-23. • Express and Freight trains to have refrigerated coaches.
• 3477 Sagar Mitras and 500 Fish Farmer
• Growing of algae, sea-weed and cage culture to be Krishi Udaan to be launched by the Ministry of Civil Aviation
promoted. • Both international and national routes to be covered.
• Producer Organisations to involve youth in fisheries • North-East and tribal districts to realize Improved value of
extension. agri-products
• Framework for development, management and
conservation of marine fishery resources.

• One-Product One-District for better marketing and export in the Horticulture sector.
• Balanced use of all kinds of fertilizers – traditional organic and innovative fertilizers..
• Measures for organic, natural, and integrated farming:
(a) Jaivik Kheti Portal – online national organic products market to be strengthened.
(b) Zero-Budget Natural Farming (mentioned in July 2019 Budget) to be included
(c) Integrated Farming Systems in rain-fed areas to be expanded
(d) Multi-tier cropping, bee-keeping, solar pumps, solar energy production in noncropping season
to be added
 PM-KUSUM to be expanded: • Financing on Negotiable Warehousing Receipts (e-NWR) to
• Rs. 20 lakh farmers to be provided for be integrated with e-NAM.
setting up stand-alone solar pumps. • State governments who undertake implementation of model
laws (issued by the Central government) to be encouraged.
• Another Rs. 15 lakh farmers to be helped to
• Livestock:
solarise their grid-connected pump sets.
• Doubling of milk processing capacity to 108 million MT from
• Scheme to enable farmers to set up solar
53.5 million MT by 2025.
power generation capacity on their
• Artificial insemination to be increased to 70% from the
fallow/barren lands and to sell it to the grid.
present 30%.
Village Storage Scheme • MNREGS to be dovetailed to develop fodder farms.
• To be run by the SHGs to provide farmers a • Foot and Mouth Disease, Brucellosis in cattle and Peste Des
good holding capacity and reduce their Petits ruminants (PPR) in sheep and goat to be eliminated by
logistics cost. 2025.
• Women, SHGs to regain their position as • Deen Dayal Antyodaya Yojana – Rs. 5 crore households
Dhaanya Lakshmi. mobilized with 58 lakh SHGs for poverty alleviation.

• NABARD to map and geo-tag agri-warehouses, cold

storages, reefer van facilities, etc.
• Warehousing in line with Warehouse Development and
Regulatory Authority (WDRA) norms:
• Viability Gap Funding for setting up such efficient
warehouses at the block/taluk level
• Food Corporation of India (FCI) and Central Warehousing
Corporation (CWC) to undertake such warehouse building.
Wellness, Water and Sanitation • Jan Aushadhi Kendra Scheme to offer 2000 medicines and 300 surgicals in all districts by
• 69,000 crore allocated for overall Healthcare sector. 2024.
• TB Harega Desh Jeetega campaign launched commitment to end Tuberculosis by 2025.
• 6400 crore (out of Rs. 69,000 crore) for PM Jan Arogya Yojana • Rs. 3.60 lakh crore approved for Jal Jeevan Mission:
(PMJAY): • Rs. 11,500 crore for the year 2020-21.
• More than 20,000 hospitals already empanelled under PM Jan • Augmenting local water sources, recharging existing sources, and promoting water harvestin
Arogya Yojana (PMJAY). and de-salination.
• Viability Gap Funding window proposed for setting up hospitals in• Cities with million-plus population to be encouraged to achieve the objective during
the PPP mode. the current year itself.
• 12, 300 crore allocation for Swachh Bharat Mission in 2020-21:
• Aspirational Districts with no Ayushman empanelled hospitals to• Committment to ODF-Plus in order to sustain ODF behaviour.
be covered in the first phase. • Emphasis on liquid and grey water management.
• Targeting diseases with an appropriately designed preventive • Focus also on Solid-waste collection, source segregation, and processing.
regime using Machine Learning and AI.
Education and Skills
• 99,300 crore for education sector and Rs.. 3000 crore for
skill development in 2020-21.
• New Education Policy to be announced soon
• National Police University and National Forensic Science
• University proposed for policing science, forensic
science, and cyber-forensics.
• Degree level full-fledged online education program by
Top-100 institutions in the National Institutional Ranking
Framework.
• Up to 1-year internship to fresh engineers to be provided
by Urban Local Bodies
• Budget proposes to attach a medical college to an existing
district hospital in PPP mode.
• Special bridge courses to be designed by the Ministries of
Health, and Skill Development:
• To fulfill the demand for teachers, nurses, para-medical
staff and care-givers abroad..
• To bring in equivalence in the skill sets of the workforce
and employers’ standards.
• 150 higher educational institutions to start apprenticeship
embedded degree/diploma courses by March 2021.
• External Commercial Borrowings and FDI to be enabled
for education sector.
• Ind-SAT proposed for Asian and African countries as a
part of Study in India.
Economic Development
Industry, Commerce and Investment
• 27,300 crore allocated for 2020-21 for development and

promotion of Industry and Commerce.

• Investment Clearance Cell proposed to be set up:

• To provide “end to end” facilitation and support.

• To work through a portal.

• Five new smart cities proposed to be developed.
• Scheme to encourage manufacture of mobile phones, electronic
equipment and semiconductor packaging proposed.
• National Technical Textiles Mission to be set up:
• With four-year implementation period from 2020-21 to 2023-24.
• At an estimated outlay of Rs 1480 crore.
• To position India as a global leader in Technical Textiles
• New scheme NIRVIK to be launched to achieve higher export credit
disbursement, which provides for
• Higher insurance coverage
• Reduction in premium for small exporters
• Simplified procedure for claim settlements
• Turnover of Government e-Marketplace (GeM) proposed to be taken to
Rs 3 lakh crore.
• Scheme for Revision of duties and taxes on exported products to be
launched
• Exporters to be digitally refunded duties and taxes levied at the Central,
State and local levels, which are otherwise not exempted or refunded
• All Ministries to issue quality standard orders as per PM’s vision of “Zero
Defect-Zero Effect” manufacturing.
Infrastructure Highways
• Accelerated development of highways to be undertaken,
• Rs. 100 lakh crore to be invested on infrastructure over including:
the next 5 years. • 2500 Km access control highways.
• National Infrastructure Pipeline: • 9000 Km of economic corridors.
• Rs. 103 lakh crore worth projects; launched on 31st • 2000 Km of coastal and land port roads
• 2000 Km of strategic highways
December 2019. • Delhi-Mumbai Expressway and two other packages to be
• More than 6500 projects across sectors, to be classified as completed by 2023.
per their size and stage of development. • Chennai-Bengaluru Expressway to be started.
• A National Logistics Policy to be released soon • Proposed to monetise at least 12 lots of highway bundles
• To clarify roles of the Union Government, State of over 6000 Km before 2024.

Governments and key regulators Indian Railways

• A single window e-logistics market to be Created Five measures:
• Focus to be on generation of employment, skills and • Large solar power capacity to be set up alongside rail tracks,
on land owned by railways.
making MSMEs competitive.
• Four station re-development projects and operation of 150
• National Skill Development Agency to give special thrust to passenger trains through PPP.
infrastructure-focused skill development opportunities. • More Tejas type trains to connect iconic tourist destinations.
• Project preparation facility for infrastructure projects • High speed train between Mumbai and Ahmedabad to be
proposed actively pursued
• 148 km long Bengaluru Suburban transport project at a cost of
• To actively involve young engineers, management Rs 18600 crore, to have fares on metro model. Central Government
graduates and economists from Universities. to provide 20% of equity and facilitate external assistance up to
• Infrastructure agencies of the government to involve 60% of the project cost.
youth-power in start-ups • Indian Railways’ achievements:
• 550 Wi-fi facilities commissioned in as many stations.
• Rs. 1.7 lakh crore proposed for transport infrastructure in • Zero unmanned crossings.
2020-21. • 27000 Km of tracks to be electri􀃶ed.
Ports & Water-ways
• Corporatizing at least one major port and its listing on stock exchanges to be
considered.
• Governance framework keeping with global benchmarks needed for more
efficient seaports
• Economic activity along river banks to be energised as per Prime Minister’s Arth
Ganga.

Airports
• 100 more airports to be developed by 2024 to support Udaan scheme.
• Air fleet number expected to go up from present 600 to 1200 during this time.
Electricity
• “Smart” metering to be promoted.
• More measures to reform DISCOMs to be taken.

Power
• 22, 000 crore proposed for power and renewable energy sector in 2020-21
• Expansion of national gas grid from the present 16200 km to 27000 km proposed
• Further reforms to facilitate transparent price discovery and ease of transactions

New Economy
• To take advantage of new technologies:
• Policy to enable private sector to build Data Centre parks throughout the country
to be brought out soon
• Fibre to the Home (FTTH) connections through Bharatnet to link 100,000 gram
panchayats this year
• 6000 crore proposed for Bharatnet programme in 2020-21
• Measures proposed to benefit Start-ups
• A digital platform to be promoted to facilitate seamless application and capture of
IPRs.
• Knowledge Translation Clusters to be set up across different technology sectors
including new and emerging areas.
• For designing, fabrication and validation of proof of concept, and further scaling
up Technology Clusters, harbouring test beds and small scale manufacturing
facilities to be established.
• Mapping of India’s genetic landscape- Two new national level Science Schemes to
be initiated to create a comprehensive database.
• Early life funding proposed, including a seed fund to support ideation and
development of early stage Start-ups.
• 8000 crore proposed over five years for National Mission on Quantum
Technologies and Applications.
 Culture & Tourism
Caring Society • Allocation of Rs. 2500 crore for 2020-21 for tourism
Focus on: promotion.
• Women & child, • 3150 crore proposed for Ministry of Culture for 2020-21.
• Social Welfare; • An Indian Institute of Heritage and Conservation under
• Culture and Tourism
Ministry of Culture proposed; with the status of a deemed
• Allocation of Rs. 35,600 crore for nutrition-
University.
related programmes proposed for the FY2020- • 5 archaeological sites to be developed as iconic sites with
21. on-site Museums:
• 28, 600 crore proposed for women specific • Rakhigarhi (Haryana)
programs. • Hastinapur (Uttar Pradesh)
• Issue about age of a girl entering motherhood – • Shivsagar (Assam)
proposed to appoint a task force to present its • Dholavira (Gujarat)
recommendations in six months’ time. • Adichanallur (Tamil Nadu)
• Financial support for wider acceptance of
• Re-curation of the Indian Museum in Kolkata, announced
technologies, identified by Ministry of
by Prime Minister in January 2020 Museum on
Housing and Urban Affairs to ensure no
Numismatics and Trade to be located in the historic Old
manual cleaning of sewer systems or septic
Mint building in Kolkata.
tanks, to be provided. • 4 more museums from across the country to be taken up
• 85, 000 crore proposed for 2020-21 for welfare
for renovation and re-curation
of Scheduled Castes and Other Backward • Support for setting up of a Tribal Museum in Ranchi
Classes.
(Jharkhand). Maritime museum to be set up at Lothal- the
• 53, 700 crore provided to further development
Harrapan age maritime site near Ahmedabad, by Ministry
and welfare of Scheduled Tribes
of Shipping.
• Enhanced allocation of Rs. 9,500 crore
• State governments expected to develop a roadmap for
provided for 2020-21 for senior citizens and
certain identified destinations and formulate financial
Divyang.
plans during 2021 against which specified grants to be
made available to the States in 2020-21.
Financial Sector • Strengthen regulating role of PFRDAI.
Reforms accomplished in PSBs : • Facilitate separation of NPS trust for government
• 10 banks consolidated into 4. employees from PFRDAI
• 3,50,000 crore capital infused. • Enable establishment of a Pension Trust by the employees
• Governance reforms to be carried out to bring in transparency and other than Government
greater professionalism in PSBs. • Factor Regulation Act 2011 to be amended to:
• Few PSBs to be encouraged to approach the capital market to raise • Enable NBFCs to extend invoice financing to the MSMEs
additional capital through TReDS
• Deposit Insurance and Credit Guarantee Corporation (DICGC) • New scheme to provide subordinate debt for
permitted to increase Deposit Insurance Coverage to Rs. 5 lakh from entrepreneurs of MSMEs by the banks
Rs.1 lakh per depositor. • Would be counted as quasi-equity
• Scheduled Commercial Bank’s health under monitoring through a • Would be fully guaranteed through the Credit Guarantee
robust mechanism, keeping depositors’ money safe. • Trust for Medium and Small Entrepreneurs (CGTMSE).
• Cooperative Banks to be strengthen by amending Banking Regulation • The corpus of the CGTMSE would accordingly be
Act for: augmented by the government
• Increasing professionalism • Window for MSME’s debt restructuring by RBI to be
• Enabling access to capital extended by one year till March 31, 2021.
• More than five lakh MSMEs have already been benefited.
• Improving governance and oversight for sound banking through the
• An app-based invoice financing loans product for MSMEs
RBI.
to be launched.
• NBFCs eligibility limit for debt recovery reduced from:
• To prevent the problem of delayed payments and
• Rs. 500 crore to Rs 100 crore asset size
consequential cash flows mismatches.
• Rs. 1 crore to Rs 50 lakh loan size.
• Export promotion of MSMEs:
• Private capital in Banking system
• For selected sector such as pharmaceuticals, auto
• Government to sell its balance holding in IDBI Bank to private, retail
components and others
and institutional investors through the stock exchange. • An Rs 1000 crore scheme anchored by EXIM Bank together
• Easier mobility in jobs with SIDBI
• Auto-enrolment in Universal Pension coverage. • Hand holding support for technology upgradations, R&D,
• Inter-operability mechanism to safeguard the accumulated corpus. business strategy etc
Financial Market
• Deepening Bond Market.
• Certain specified categories of Government securities to be opened fully for non – resident investors also
• FPI limit in corporate bonds increased to 15% from 9% of its outstanding stock
• New legislation to be formulated for laying down a mechanism for netting of financial contracts.
• Scope of credit default swaps to expand.
• Debt Based Exchange Traded Fund expanded by a new Debt-ETF consisting primarily of Government Securities
• To give attractive access to retail investors, pension funds and long-term investors.
• A Partial Credit Guarantee scheme for the NBFCs formulated post the Union budget 2019-20 to address their liquidity
Constraints
• New mechanism to be devised to further this Government support to securities so 􀃸oated

Infrastructure Financing
• 103 lakh crore National Infrastructure Pipeline projects earlier announced.
• Rs 22,000 crore to cater to the equity support to Infrastructure Finance Companies such as IIFCL and a subsidiary of NIIF.
• IFSC, GIFT city: full of potential to become a centre of international 􀃶nance as well as a centre for high end data processing:
• An International Bullion exchange(s) to be set up as an additional option for trade by global market participants with the
approval of regulator.

Disinvestment
• Government to sell a part of its holding in LIC by way of Initial Public Offer (IPO).
Fiscal Management • Fiscal deficit of 3.8% estimated in RE
• XV Finance Commission (FC): 2019- 20 and 3.5% for BE 2020-21. It
• XV Finance Commission has given its first report for comprises two ingredients;
FY2020-21
• 3% for year 2019-20 and 3% for the 2020-
• Recommendations accepted in substantial measure
• Its fiscal report for five years beginning 2021-22 to be 21 budget estimate.
submitted during the latter part of the year. • Deviation of 0.5%, consistent with Section
• GST Compensation Fund: 4(3) of FRBM Act, both for RE 201920
• Balances due out of collection of the years 2016-17 and 2017- and BE 2020-21. (Section 4 (2) of the
18 to be transferred to the Fund, in two instalments. FRBM Act provides for a trigger
• Hereinafter, transfers to the fund to be limited only to mechanism for a deviation from the
collection by way of GST compensation cess estimated fiscal deficit on account of
• Overhaul of Centrally Sponsored Schemes and Central Sector
structural reforms in the economy with
Schemes necessary
• To align them with emerging social and economic needs of unanticipated fiscal implications.)
tomorrow • Return path, committing to fiscal
• To ensure that scarce public resources are spent optimally consolidation without compromising needs
• On the recent debate over transparency and credibility of of investment out of public funds, is laid in
projected fiscal numbers, it is assured that procedure adopted Medium Term Fiscal Policy cum Strategy
is compliant with the FRBM Act. Statement.
• For the FY 2019-20: • Market borrowings: Net market
• Revised Estimates of Expenditure: at Rs.26.99 lakh crore
borrowings: Rs.4.99 lakh crore for 2019-
• Revised Estimates of Receipts: estimated at Rs.19.32 lakh
crore.
20 and Rs.5.36 lakh crore for 2020-21.
For year 2020-21: • A good part of the borrowings for the
• Nominal growth of GDP estimated at 10%. financial year 2020-21 to go towards
• Receipts: estimated at Rs.22.46 lakh cr Capital expenditure that has been scaled up
• Expenditure: at Rs.30.42 lakh cr by more than 21%.
• Significant tax reforms for boosting investments recently
undertaken. However, expected tax buoyancy expected to
take time.
 TAX PROPOSALS
• Concessional corporate tax rate of 15 per cent to new domestic companies in manufacturing
and power sector.
• Tax concession for sovereign wealth fund of foreign governments and other foreign
investments.
• Tax benefits to Start-ups by way of deduction of 100 per cent of their profits are enhanced
by increasing turnover limit and period of eligibility.
• Concessional tax rate for cooperatives proposed.
• Turnover threshold for audit of MSMEs increased.
• Extension of time limits pertaining to the tax benefits for affordable housing.
• Issuance of Unique Registration Number to all charity institutions for easy tax compliance.
• Health cess to be imposed on imports of medical equipment given these are made
significantly in India.
Indirect Tax
GST
• Cash reward system envisaged to incentivise customers to seek
invoice.
• Simplified return with features like SMS based filing for nil return and
improved input tax credit flow to be implemented from 1st April, 2020
as a pilot run.
• Electronic invoice to capture critical information in a centralized
system to be implemented in a phased manner.
• Aadhaar based verification of taxpayers being introduced to weed out
dummy or non-existent units.
• GST rate structure being deliberated to address inverted duty structure.
Customs Duties
• Customs duty raised on footwear to 35% from 25% and on furniture
goods to 25% from 20%.
• Basic customs duty on imports of news print and light-weight coated
paper reduced from 10% to 5%.
• Customs duty rates revised on electric vehicles and parts of mobiles.
• 5% health cess to be imposed on the imports of medical devices,
except those exempt from BCD
• Lower customs duty on certain inputs and raw materials like fuse,
chemicals, and plastics.
• Higher customs duty on certain goods like auto-parts, chemicals, etc.
which are also being made domestically.
• Excise duty proposed to be raised on Cigarettes and other tobacco
products, no change made in the duty rates of bidis.
• Anti-dumping duty on PTA abolished to benefit the textile sector.