Recently, the Union Minister of Finance presented the long-awaited 2020-21 budget. The key highlights included significant increases in bank deposit insurance cover and proposals for amendments to the Companies Act to decriminalise civil offences. Further investments in technology and governance were also detailed, driving a strong push towards modernisation for India.
Finance and Economics
Bank deposit insurance cover saw a remarkable increase from ₹1 lakh to ₹5 lakh per depositor. This move is aimed at providing more financial security to depositors. A significant amendment was proposed to the Companies Act – transforming civil offences to decriminalised acts. The government further announced plans to sell part of its stake in LIC via a public offering.
In a bid to stimulate the economy, an array of schemes and policy changes were proposed. Notably, a scheme was launched to encourage manufacturing in key sectors, including mobile phones, electronic equipment, and semiconductor packaging. MSMEs received attention with the audit threshold being raised from ₹1 crore to ₹5 crore.
Investment and Innovation
The budget detailed various initiatives designed to foster investment and innovation. An Investment Clearance Cell will be established to provide end-to-end facilitation. There were also proposals for early-life funding, including a seed fund to support the ideation and development of early-stage start-ups.
Further developments included the reduction of NBFCs eligibility limit for debt recovery from Rs. 500 crore to Rs 100 crore asset size and Rs 1 crore to Rs 50 lakh loan size. Increased investment in corporate bonds by foreign investors was enabled by raising the Foreign Portfolio Investment (FPI) limit from 9% to 15%.
Technology Boost
The 2020-21 budget proposed various measures to leverage technology for growth. Development of Digitisation Knowledge Translation Clusters was proposed for emerging technology sectors. A policy to enable private sector-driven Data Centre parks across the country was announced.
Additionally, a substantial ₹8000 crore over five years was proposed for a National Mission on Quantum Technologies and Applications. Initiatives were also put forth for mapping India’s genetic landscape and creating a comprehensive database.
Focus On Governance
The announcement of a professional and independent National Recruitment Agency (NRA) was a key highlight in governance reforms. The NRA will conduct an online Common Eligibility Test for recruitment on all non-gazetted posts. There will also be a test centre set up in every district, focusing particular attention on Aspirational Districts.
A new National Policy on Official Statistics was presented to promote the use of cutting-edge technologies such as AI, creating a roadmap towards modernised data collection. Finally, a sum of Rs. 100 crore was allocated to begin preparations for the G20 presidency, scheduled to be hosted in India in 2022.
Last Modified: February 7, 2024