2020 Union Budget of India: Highlights and Important Announcements
Indian Finance Minister Nirmala Sitharaman, presented the Union Budget 2020 in Lok Sabha on February 1, 2020. She improved her own record of delivering the longest budget speech in the parliament. Her speech lasted around 2 hours 43 minutes. Her 2019 budget speech lasted for around 2 hours 15 minutes. Before her, it was then finance minister Jaswant Singh who held the record for the longest budget speech. He spoke for 2 hours and 13 minutes to present the Union Budget in 2003.
Let's take a look at highlights from Sitharaman's 2020 Budget speech-
Focus on farmers
The minister started her speech with proposed measures and policies to achieve the aim of doubling farmers' income by 2022. She launched 'PM KUSUM Scheme' to empower the farmers by actively introducing solar power in farming.
The government will encourage farmers to solarize their farms by replacing diesel pumps with solar pumps. This would reduce the cost of power generation for the farmers and will promote alternative sources of energy at the same time.
A plan to use barren lands to set up solar farms was also introduced in the budget speech. Under the program, state governments will help farmers set up solar farms and sell the produced electricity to power grids. Thus, farmers can make a living out of barren land.
The government also initiated a plan to boost Horticulture. An online portal 'Jaivik Kheti' will be developed to help farmers use proper manure and little water. Horticulture projects at the district level will be given importance.
Food Corporation of India and Warehousing Corporation of India, will build warehousing facilities on their land.
Indian Railways will run 'Kisan Rail' to help transport perishable goods.
'Krishi Udaan' scheme will be launched by the Ministry of Civil Aviation to transport agri-products to national as well as international destinations.
Rs 12,300 crore allocated for Swacch Bharat
The government allocated Rs 69,000 crore for health in this budget. Finance Minister proposed expansion of Jan Aushadhi Kendras in all districts of the country. The program provides medicines at affordable rates. She said that proceeds from taxes on medical devices would be used by the country for setting up hospitals. The minister also allocated Rs 12,300 crore for 2020-21 phase of the Swacch Bharat Mission.
Mega push for Education Sector
In a mega push, Sitharaman announced Rs 99,300 crore for education sector and Rs 3000 crore for skill development. She also announced the introduction of a New Education Policy (NEP). A new program where urban local bodies will provide 1-year internship to fresh engineers was also announced. This will give fresh graduates an opportunity to work with government bodies and other organizations. The minister also stressed on providing employment to non-science stream students.
Finance Minister further proposed online degree programmes by top-100 educational institutions. A new 'IndSAT exam' will now be held every year for entry of foreign students into Indian universities.
India to host G20 presidency in 2022
India will host the 17th G20 Leaders' Summit in 2022. A budget of Rs 100 crore has been allocated for the same. The country will host leaders from the United States, European Union, Russia, Italy and other member G20 nations for the summit.
Steps taken by the Indian government for Economic development
There were no major policy changes or expected help from the government for industry and entrepreneurs. The falling GDP growth was one of the reasons for fiscal deficit.
The Finance Minister proposed a Clearance Cell for end to end facilitation service at the Central and State level. She also recommended 'National Technical Textiles Mission' for 4 years. Rs 1,480 crore will be allocated for the same. She stated the Prime Minister's vision to make every district an export hub and allocated Rs 27,300 crore for the promotion of industry and commerce development.
Budget 2020 allocated Rs 103 lakh crore for housing, safe drinking water, healthcare, education institutions, railway stations, airports, logistics and other infrastructure projects. The minister also announced setting up of a National Logistics Policy soon. A single-window clearance for logistics has also been proposed. She also advised to provide Rs 22,000 crore for power, the renewable energy sector, and discom reforms.
Budget for Indian railways
The minister announced setting up of high capacity solar power generation centres at Indian Railways premises. She suggested that railways should work on installing solar panels on an empty land which is owned by them on side of tracks.
She also announced the induction of 150 more Public Private Partnership (PPP) trains like the Tejas express. Such trains will connect major tourist destinations of India.
New Income-Tax (IT) Scheme introduced
A new personal income tax scheme was introduced by the finance minister. The scheme will be optional and taxpayers opting for it will not be able to enjoy exemptions such as 80C, HRA, Home Loan, Medical Insurance and other standard deductions.
Government's focus on environment and climate change
The budget also revolved around India's commitment to Paris Climate Accord. Government allocated Rs 4,400 crore for clean air amid the Delhi pollution crisis.
The finance minister advised closing powerplants which have emissions over permissible norms dismissing rumours of a possible deadline extension.
Government to sell stake in LIC
The government revealed its plan to raise funds from a sale of stake in Life Insurance Corporation of India. The sale is proposed to be initiated via an Initial Public Offering (IPO). Currently, the Indian government holds the entire stake in LIC.
Stocks of major Insurance companies fell sharply after the announcement of the New Tax Regime and government's plan to sell stake in LIC.
Tax rates on consumable items
From February 2020, consumable goods like refrigerators, air conditioners (ACs) and imported fans will become expensive. Basic Customs Duty has been hiked on compressors used in cooling items. Cigarettes and tobacco products will also become expensive due to the raised excise duty.