On 1st February, 2020 the Finance Minister of our Country read the annual budget for the year 2020-21. Here, are a few glimpses of the budget. The budget had 3 major themes. Following the same themes we have presented our analysis.
1. Aspirational India
2. Economic Development
3. Caring Society

Aspirational India

Government aims to raise fishery export to Rs 1 lack crore by 2025
The government aims to raise India’s fishery exports to ₹1 lakh crore by 2024-25. By 2022- 23, the government also proposes to raise fish production to 200 lakh tonnes, Finance Minister Nirmala Sitharaman said on Saturday while presenting the Union Budget for 2020- 21. Read More“Growing of algae, sea-weed and cage culture will also be promoted. Our government will involve youth in fishery extension through 3,477 Sagar Mitras and 500 Fish Farmer Producer Organisations. We hope to raise fishery exports to ₹1 lakh crore by 2024-25,” she said. The government also proposes to put in place a framework for development, management and conservation of marine fishery resources, she added.
New Educational policies and internship opportunities: Brighter course for online courses
The government confirmed the launch of a new education policy in the upcoming days. FM Sitharaman also proposed an allocation of Rs 99,300 crore and Rs 3,000 crore for education and skill development respectively. Read MoreWith a view to embed practical learning in academia, the Finance Minister announced apprenticeship embedded degree and diploma courses across 150 higher educational institutions by March 2021. Along with this, she introduced internship opportunities to fresh engineers for a period of up to one year in urban local bodies. Additionally, sourcing External Commercial Borrowings and FDI for the education sector are on the cards.
Government committed to ODF+ in order to sustain ODF behaviour says FM Nirmala Sitharaman
Water stress was a key area for the government. 100 water-stressed districts would be identified and given due attention to ensure that water is available to all the citizens of India. A ‘very focused’ safe water ‘Jal Jeevan Mission’ and sanitation programme ‘Swachh Bharat Yojna’ have been launched to tackle health concerns. Read MoreFM Sitharaman said, “Much is needed to be done for greywater management. We have approved Rs 3.6 lakh crore for Jal Jeevan Mission to provide safe drinking water to rural India. Our govt is committed ODF+ in order to sustain ODF behaviour and to ensure no one is left behind.” A total allocation of Rs 12,300 crore in Swachh Bharat mission for 2020-21 has been done
Aspirational India in focus for Union Budget 2020, Healthcare Budget Up by 10%
Union Finance Minister, Nirmala Sitharaman, presented the union budget 2020 on 1st February in she which pitched for an outlay of INR 69,000 Cr ($9.6 Bn) towards healthcare, a nearly 10% increase from last year. Read MoreThe minister said that the government has a holistic vision of healthcare that translates into the wellness of the citizen. The allotment under healthcare includes INR 6400 Cr for Prime Minister Jan Arogya Yojana (PMJAY). The minister also proposed to expand Jan Aushadhi Kendra Scheme to all districts. Further, the finance minister proposed to impose a nominal health cess, by way of a duty of customs, on the imports of medical equipment, with the view that these goods are now being made significantly in India
National Recruitment Agency to conduct common online exam for non-gazetted posts
Union finance minister on Saturday announced that a recruitment agency will be set up for all computer-based examinations for the recruitment in government and public sector banks focusing on the ‘Aspirational India’ theme of this year’s Union Budget.Read More It is proposed to evolve a robust mechanism for appointment including direct recruitment to tribunals and specialised bodies to attract best talents and professional experts. There is also a strong argument for ensuring the contracts are honoured.

Economic Development

The Economic Development theme of the Union Budget 2020-2021 covered the following parameters:
1. Tax
2. Infrastructure
3. Banking
4. Investment
5. Industry and Commerce
Tax
The government removed the Dividend distribution tax and the transferred the liability to pay DDT at applicable rates to the recipients. It also announced the concessional tax rates for new power generation companies and that 100% tax concession will be given to sovereign wealth funds on investment in infrastructure projects.Read More A new scheme “Vivaad se Vishwaas” was launched to settle direct tax disputes. Through the scheme the government aims to free around ₹9L-Cr stuck in tax disputes. For Income Tax, new rates were introduced for those who forego exemptions, while others can revert back to old rates. This provides an option to the tax payers. A 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. Concessional tax rate for cooperatives proposed. Turnover threshold for audit of MSME’s was 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.
Infrastucture
The government plans to set up 5 new Smart cities, redevelop 4 railway stations and introduce 150 new trains via PPP model. It also allocated Rs 1.7 lakh crore to transportation. In order to support UDAN scheme and boost agricultural exports 100 more airports are planned to be set up by 2024. NHAI to monetize 12 lots of highway bundles of over 6,000 km before 2024. Read MoreYoung engineers and management graduates will be roped in for infrastructure projects under Project Preparation Facility. A capital of about Rs 22,000 crore already infused in National Infrastructure Pipeline. Land owned by railways alongside the railway tracks will be utilised to set up large solar power capacities. More trains like Tejas will be put into use for tourism purposes.Expansion of National Gas Grid from 16,200 km to 27,000 km along with reforms to deepen gas markets, enable ease of transactions and transparent price discover. Rs 22,000 crore was allocated to power and renewable energy. Pre-paid smart meters to be introduced in place of conventional meters so that the liberty of choosing the supplier and rate as per requirement. Corporatisation of at least one major port was on the agenda of the government as well.
Banking
The government increased the depositor insurance to 5 lakh from the current 1 lakh so as to protect bank depositors. It also opened PSBs to capital market for fund raising with LIC to have its first IPO. Read MoreTo unlock private capital, Ms Sitharaman proposed the sale of the government’s balance holding in IDBI Bank to private, retail and institutional investors through stock exchanges.On the back of bank consolidation and capital infusion of Rs 3.5 lakh crore into public sector banks, the Finance Minister said governance reforms will be carried out to make them more competitive, transparent and professional, thereby ensure a robust banking system. The limit for NBFCs to be eligible for debt recovery mechanism via the SARFAESI Act 2002 is proposed to be reduced from existing asset size limits of Rs 500 crore to Rs 100 crore or loan size from existing Rs 1 crore to Rs 50 lakh.
Investment
Government plans to sell part of its holding in Life Insurance Corporation (LIC) by way of Initial Public Offering and doubles the divestment target for the next fiscal at Rs 2.1 lakh crore. Apart from being in access of domestic investors, NRIs can now invest in certain specified categories of government securities. Read MoreFPI limit in corporate bonds raised to 15% from 9%. Expand Exchange Traded Fund by floating a Debt ETF, consisting primarily of govt. securities. NIRVIK Scheme for higher export credit disbursement launched.It also plans to set up Investment Clearance Cell through a portal which will provide end-to-end facilitation, support and information on land banks. Foreign portfolio investor (FPI) limits in corporate bonds are proposed to be increased to 15 per cent of outstanding stocks from the current 9 per cent. Specified categories of government securities will be opened fully for non-resident investors along with domestic investors. A new debt-based exchange-traded fund (ETF) consisting primarily of government securities will be floated.
Industry and Commerce
The Finance Minster proposes to double the Milk processing capacity by 2025. 80 billion rupees to be provided for quantum technologies and applications over 5 years. 273 billion rupees to be provided for promotion of industry and commerce. 44 billion rupees to be allocated for clean air incentives in cities with over 1 million people. Read MoreFirms operating old thermal power plants advised to shut units if emission norms are not met. Scheme anchored by EXIM Bank and SIDBI to handhold MSMEs in exports markets.

Caring Society

1. Women and Children
Beti Bachao, Beti Padhao
The initial aim of this campaign launched in 2015 was to address the issue of the declining Child Sex Ratio (CSR) and FM Nirmala Sitharaman highlighted the tremendous impact made by Prime Minister Beti Bachao Beti Padhao programme. Read MoreThe state of Haryana was one of the critical states in terms of a sex ratio at birth is now on the path to recovery. In her maiden budget speech, the Finance Minister expressed that the Beti Bachao Beti Padhao programme has yielded positive results due to continuous efforts of the government. Gross enrollment ratio of girls across all levels of education is now higher than boys. At the elementary level, it is 94.32% as against 89.28% for boys. At the secondary level, it is 81.32% as compared to 78%. At the higher secondary girls have achieved a level of 59.70% as compared to 57.54% for boys. With this, the Finance Minister announced a budgetary allocation of Rs. 28,600 crore for programmes which are specific to the women.
Poshan Abhiyan
The focus of the Ministry of Women & Child Development remains to improve the nutritional status of children (0-6 years), adolescent girls, pregnant mothers and lactating mothers. The nutrition sector was allocated with Rs. 35,600 crore for nutrition-related programmes to bring down malnutrition rate in India. Read MoreThe budget for the National Nutrition Mission has been increased from Rs. 3,400 crore in 2019-20 to Rs.3,700 crore in 2020-21. Under Poshan Abhiyan 6 lakh Anganwadi workers have been equipped with smartphones to provide nutritional updates for 10 crore households. The Anganwadi programme under the government which provides supplementary nutrition saw an increment in the allocation of 15% going up from Rs.17,704 crore to Rs. 20,532 crore.
Task Force Appoint for Women
The Finance Minister announced a task force to be appointed to provide recommendations on the appropriate age for women to become a mother. Read MoreAs India progresses, Sitharaman said it is time to address this matter as early marriage directly impacts a woman’s health. Women’s age of marriage was increased to 18 years by amending the erstwhile Sarda Act officially called the Child Marriage Restraint Act 1929.

2. Social Welfare
Senior Citizens and Physically Challenged people
Finance Minister Nirmala Sitharaman announced the allocation of Rs.9,500 crore for senior citizens and physically challenged people (Divyang). Stressing the upliftment of backward classes, she also announced Rs.53,700 for the development and welfare of Scheduled Tribes and Rs. 85,000 for the welfare of the Scheduled Castes and Other Backward Castes for the year 2020-21.
Manual Scavenging
The Ministry of Housing and Urban Affairs has identified suitable technology for Sewerage cleaning. The government wants to abolish Manual Scavenging. It refers to the practice of manual cleaning, disposing and handling human excreta. Read MoreUttar Pradesh state has the highest number of manual scavengers and Madhya Pradesh has the lowest. “Special efforts to eradicate manual scavengers through mechanisation,” said Nirmala Sitharaman in her budget speech. The budget allocates funds to achieve this and also supports the wider acceptance of such technologies. There is a 14% increase in the budget allocation for the ministry of social justice and empowerment.

3. Culture and Tourism
Finance Minister Nirmala Sitharaman on Saturday proposed the setting up of an Indian Institute of Heritage and Conservation with the status of a deemed university under the Ministry of Culture allocating Rs 3,150 crore for the Ministry of Culture and Rs 2,500 crore for the Ministry of Tourism. Read More The Finance Minister also explained how the ministry believes that acquisition of knowledge in disciplines such as archaeology are essential for collecting and analysing scientific evidence of such findings and for dissemination through high quality museums. Additionally reports show that with the moving of rank of India from 65 to 34 in 2019, the foreign exchange earnings have also similarly increased by 7.4%. The budget also proposed that five archaeological sites will be developed as iconic sites in Rakhigarhi in Haryana, Hastinapur in Uttar Pradesh, Dholavira in Gujarat, Adichanallur in Tamil Nadu and Sivasagar in Assam and on-site museums will also be constructed at these locations. Apart from this, a tribal museum will be constructed in Ranchi, Jharkhand, also there will be re-curation of the oldest museum in India as announced by Prime Minister Narendra Modi in January. A numismatics and trade business will also be located in the historic and old mint building in Kolkata and four other museums all over India will be renovated.

4. Environmental and Climate change
Nirmala Sitharaman in the budget, has said that the government advise utilities to close down thermal power plants in violation of National Clean Air Programme (NCAP) norms. Speaking about government’s efforts in furthering the clean air norms, Sitharaman added that the International Solar Alliance will help in achieving Sustainable Development Goals, climate change, disaster resilience, and the Nationally Determined Contributions under the Paris Agreement. Read More As part of its Intended Nationally Determined Contribution (INDC), the energy intensity of India’s growth is targeted to decline by 33 to 35 percent by 2030 compared with 2005. Also, there is a target of generating 40 per cent of power from non-fossil sources by 2030. The Union Budget allocated Rs 4,400 crore for NCAP for the year 2020-21. On the Budget allotment front, the Finance minister has allocated Rs 22,000 crore for the power and renewable sector for the next financial year and has urged state governments to convert all the existing electricity meters into prepaid smart meters in three years, which would give consumers the right to choose suppliers and the rate.

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