Vision for $5 trillion economy driven by investment.
Transforming rural lives.
New Jal Shakti.
Mantralaya to ensure Har Ghar Jal.
Enhancing ease of direct and Indirect Taxation
Strengthing connectivity Infrastructure
Gandhipedia to sensitize society.
India’s Soft Power
Harnessing India’s Space Abilities.
Pradhan Mantri Karam Yogi Maandhan
Pension Benefits to retail traders and small shopkeepers.
Enhance Interest deduction for affordable housing Loan
Tax benefits for corporate tax payers.
Pradhan Mantri Matsya Sampada Yojana.
Scheme of faceless electronic tax assessment.

HIGHLIGHTS OF BUDGET 2019-20

BANKING REFORM:

On purchase of high-rate pooled assets of NBFC amounting of Rs 1 lakh core in this FY, govt will provide one-time 6 month credit guarantee.
Propose to provide Rs 70,000 crore capital for PSU Banks.
Government considering to go below 51% to an appropriate level of ownership stake in non-financial public sector undertakings on case by case basis.

TAXES:

No change in personal income tax rates
Additional Rs 1.5 lakh tax relief on home loan for purchase of a house up to Rs 45 lakh.
Custom duty hike on fuel by 1 rupee, gold and precious items; Petrol & diesel to get costlier.
3% surcharge 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.

RAILWAYS:

A new PPP model will usher in the new dawn of Indian railways.
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.

MSME:

Propose easing angel tax for startups.
Angel tax: Wont require scrutiny from I-T department for startup.
2% interest subvention for GST-registered MSME on fresh or incremental loans.
‘Stand Up India' Scheme to continue till 2025.
New television channel for start-ups.
Pension benefit extended to retail traders with annual turnover less than Rs 1.5 crore.
New payment platform for MSMEs to be created.

EDUCATION:

Govt to launch 'Study in India' programme to attract foreign students in higher education.
Allocate Rs 400 crore for world-class higher education institutions in FY 20.
To unveil a new education policy.
National research foundation to fund, coordinate and to promote research in the country.
New Higher Education Commission with focus on higher autonomy.
New national education policy to propose changes in school, higher education.

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.
Govt will take up 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.

AFFORDABLE HOUSING:

Rental laws to be reformed. Modern tenancy laws will be shared with states to promote house renting.

TO PROMOTE DIGITAL PAYMENTS:

2% TDS on withdrawals of Rs 1 crore in a year from your bank account for business payments.
No charge on digital payments: MDR charges waived on cashless payment.

EASE OF LIVING:

Aadhaar card for NRIs on arrival in India.
Rs 3,000 pension per month for retail traders and shopkeepers with an annual turnover less than Rs 1.5 crore under Pradhan Mantri Karam Yogi Man Dhan Scheme.

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.
Comprehensive restructuring of National Highways Programme for creation of National Highways Grid.

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.
Rs 1 lakh loan to be provided for SHG women members.
Every verified woman SHG member having a Jan Dhan account can avail Rs 5,000 rupees overdraft facility.

DIVESTMENT:

Govt to modify 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.

TOURISM:

17 iconic world-class tourist sites to be developed.

FDI:

Local sourcing norms will be relaxed for the single-brand retail sector.
Govt to open FDI in aviation, insurance, animation AVGC and media.

AUTO SECTOR:

FAME II scheme aims to encourage faster adoption of electric vehicles through the right incentives and charging infrastructure.

FOR RURAL INDIA:

Gaon, Garib and Kisan are the focus of our government.
New Jal Shakti ministry will work with states to ensure Har Ghar Jal for all rural houses by 2024.
Pradhan Mantri Gram Sadak Yojana phase 3 is envisaged to upgrade 1,25, 000 km of road length over the next 5 years .
Govt will set up 100 new clusters for 50,000 artisans in FY 20.
To invest Rs 80,250 cr for up-gradation of roads under PM Gram Sadak Yojana.
Every single rural family, except those unwilling, to have electricity by 2022.

AGRICULTURE:

Govt to promote innovative zero Budget farming.
10,000 new farm produce organisations.
80 Livelihood business incubators and 20 technology business incubators to be set up in 2019-20 under ASPIRE to develop 75,000 skilled entrepreneurs in agro-rural industries.

SPACE:

India has emerged as a major space power. It is time to harness our ability commercially.
A public sector enterprise, New Space India Limited (NSIL) has been incorporated to tap benefits of ISRO.

SPORTS:

To popularise sports at all levels, National Sports Education Board for development of sportspersons to be set up under 'Khelo India.'

STATE OF THE ECONOMY:

Railways will require investment of Rs 50 lakh crore from 2018-30.
Schemes such as BharatMala, Sagarmala and UDAN are bridging rural urban divide and improving our transport infrastructure.
'Gandhipedia' is being developed to sensitize the youth about positive Gandhian values.
The unambiguous mandate by the people in the recent election has set the ball rolling for the New India.
NPAs recover Rs 4 lakh crore over the last four years, NPAs down by Rs 1 lakh crore in the last one year.
Rashtriya Swachhta Kendra to be inaugurated at Rajghat on October 2.
India will become $3 trillion economy this year. We need to continue to take many structural reforms to achieve $5 trillion economic goal.

SECTORIAL IMPACT

Gainers

Infrastructure: The government intends to invest more than Rs 100 lakh crore in the sector in the next five years. It also proposed to increase the bond market participation in the infrastructure sector. As resource mobilisation for the sector, the government also proposed to increase road and infrastructure cess by one rupee a litre on petrol and diesel. This will generate more funds for infrastructure investment.

Railways: The government will spend Rs 50 lakh crore in the railway sector between 2018 and 2030. It is estimated that railway infrastructure would need capital expenditure outlays of around Rs 4 lakh crore per annum.

Aviation: Under UDAN scheme, more than 100 airports are operating in India. The number of aircraft has also increased. To attain self-reliance, India will enter into aircraft financing and leasing market. Proper policy initiatives to be taken to bring maintenance, repair and overhaul (MRO) activities to India resulting in savings in forex exchange. The budgetary support for central sector schemes/projects has been reduced from Rs 9,900 crore (RE) to Rs 4,500 crore. It seems reduction has been done to increase private sector participation under PPP mode.

Roads: Bharatmala II will be launched to develop state highways. The government has increased its focus on rural roads with 97 percent villages being connected. It proposed to lay and upgrade 1.25 lakh km of rural road length over the next five years, with an estimated cost of Rs 80,250 crore.

Electric vehicles: Fame II has been rolled out with outlay of Rs 10,000 crore. The government also proposed income tax deduction on interest paid for the purchase of electric vehicle up to Rs 150,000 per annum.

Power: The government proposed to create a National Grid for electricity. It also proposed to set up a high-level empowered committee to look into the retirement of old and inefficient power plants and address low capacity utilisation of gas-based power plants. About 35 crore LED bulbs that were distributed have led to savings of Rs 18,341 crore per annum. The distribution scheme will be expanded to solar stoves and battery charger in the country. For this, she also increased allocation to the concerned ministry.

Water: The government proposed to create National Waterways to increase transportation of man and materials by water leading to a reduction in cost and savings in foreign exchange. It also proposed to set up Jal Shakti Mantralaya integrating with a target to provide piped water to all rural households by 2024. The government is also looking to increase investment in water harvesting, water management/ treatment.

NBFCs and HFCs: Top rated NBFCs will receive enhanced liquidity, as the government said it will provide a one-time 6-month partial guarantee of Rs 1 lakh crore to state-run banks for purchasing consolidated high-rated pooled assets of financially-sound NBFC’s. The sovereign will be covering their first loss by around 10 percent.

Tourism: Government proposed to build 17 iconic sites to encourage the arrival of tourists in India.

Affordable homes: FM proposed to allow an additional deduction of up to Rs 1.50 lakh for interest paid on loans borrowed up to March 31, 2020 for purchase of an affordable house valued up to Rs 45 lakh. Therefore, a person purchasing an affordable house will now get an enhanced interest deduction up to Rs 3.5 lakh. This will translate into a benefit of around Rs 7 lakh to a middle-class home-buyer over his/her loan period of 15 years.

Insurance: The government's move to increase the FDI limit to 100 percent in insurance intermediaries will ensure higher penetration of insurance products in the country, and this will facilitate in further opening up of the Indian economy.

Retail: Local sourcing norms will be eased for FDI in the single-brand retail sector.

Cigarette: FM imposed nominal excise duty on cigarettes in this budget. This was actually a relief as the increase in duty was expected to be much higher.

PSU banks: Government announced infusing Rs 70,000 crore in PSU banks for the financial year 2019-20, which will boost lending.

Losers

Gems and jewellery: The gold import duty has been increased from 10 percent to 12.5 percent that indicates government's move to discourage import of physical gold and promote digital gold in the form of ETF, Gold Bonds, etc.Gold demand in India may drop further as gold prices are already at multi-year highs and jewellery will become unaffordable to small pocket households.

Oil retailers: The government has proposed to apply an infrastructure cess and a special additional excise duty of Re 1 each per litre on petrol and diesel (effectively amounting to Rs 2 per litre), which will result in higher fuel prices to the end consumers but also contribute towards additional tax revenues for the government.

Fertilisers and agrochemicals: Zero Budget farming aims at ending the reliance of farmers on loans and reducing their production costs and in turn ending the debt trap (debt cycle) for farmers. The word 'budget' refers to credit and expenses and hence ‘Zero Budget Farming’ means farming that is free of any loans, credits, and expenses on purchased inputs (like seeds, fertilizers, chemicals etc.).The emphasis on ZERO budget farming aims to double farm income, especially by reducing loan burden and getting the farmers out of the trap.

Auto: Increasing the fuel cost and encouraging the adoption of electric vehicles will adversely affect the traditional auto companies. The sector has already been struggling for last few quarters and this budget is far from ideal for them.

Luxury products: The government proposed increase surcharge on individuals having taxable income from Rs 2 crore to Rs 5 crore and Rs 5 crore and above so that effective tax rates for these two categories will increase by around 3 percent and 7 percent respectively, which will ultimately impact luxury or premium products.

WHAT'S CHEAPER, WHAT'S EXPENSIVE AFTER UNION BUDGET 2019:

Cheaper:

Electric vehicles
Affordable houses
Set top boxes
Imported defence equipment
Imported parts of electric vehicles
Camera module and charger of mobile phones
Imported raw material for manufacture of artificial kidneys
Imported wool fiber, wool tops

Expensive:

Petrol
Diesel
Cash withdrawal over Rs. 1 crore/year
Fully-imported cars
Split air-conditioners
Cigarettes, hookah and chewing tobacco
Imported auto parts
Imported stainless steel products
Imported gold and precious metals
Imported paper and paper products including printed books
Imported loud-speakers, indoor and outdoor unit of split AC
Imported plugs, sockets, switches
CCTV cameras, IP cameras, digital video recorders
Loudspeakers
Optical fibre
PVC
Vinyl flooring
Metal fittings
Marble slabs
Ceramic tiles and wall tiles
Mountings for furniture
Imported cashew kernels
Raw materials for manufacture of soap