Presented to Parliament by the Union Minister for Finance, the Union Budget 2019-20 stands as a comprehensive financial statement for the Government of India’s estimated receipts and expenditure for the coming fiscal year. Notably, the term ‘budget’ does not appear in the Constitution; instead, it is popularly referred to as the ‘Annual Financial Statement’ under Article 112 of the Constitution. The fiscal year begins on April 1 and concludes on March 31 of the subsequent year. The budget includes several elements beyond estimated receipts and expenditure projections.
Key Components of the Budget
The budget contains vital information relating to:
- Estimates of revenue and capital receipts.
- Methods proposed to raise revenue.
- Estimated expenditure.
- The actual receipts and expenditure of the concluding financial year, with explanations for any deficit or surplus.
- Economic and financial policies for the forthcoming year, encompassing taxation proposals, revenue prospects, spending programs, and new scheme or project intros.
In 1921, the Railway Budget was detached from the General Budget upon Acworth Committee’s recommendations, but in August 2016, the Central Government decided to merge them back together.
Economy and Fiscal Deficit
For FY 19, the fiscal deficit is pegged at 3.3% of GDP. Projections indicate that the Indian economy will reach a 3 trillion dollar valuation in 2019. The government’s aspiration is to accelerate this growth and transform India into a 5 trillion dollar economy by 2024-25. This ambitious goal necessitates significant investment in key sectors like infrastructure, digital economy, and job creation within small-to-medium enterprises.
| Fact | Details |
|---|---|
| Fiscal Deficit | 3.3% of GDP (FY19) |
| Economy Valuation Projections | $3 trillion (2019), $5 trillion (2024-25) |
| Target Investment Sectors | Infrastructure, Digital Economy, SMEs |
Tax Proposals and Changes
The budget revealed several adjustments to the taxation landscape. It announced interchangeable usage of PAN and Aadhaar for filing I-T returns and set a minimum limit of Rs. 5 lakh for taxpayers.
Measures for MSMEs
The Union Budget proposed alleviation of angel tax for startups and introduced an e-verification system for investor identity and their source of funds. Additionally, GST-registered MSMEs are granted a 2% interest subvention on fresh or incremental loans.
Investment in Rural India and Agriculture
The government plans to accomplish ‘Har Ghar Jal’ (water in every home) by 2024 in all rural households. In addition, the Pradhan Mantri Gram Sadak Yojana phase 3 will upgrade 1,25,000 km of road length over the next five years.
Youth and Education
The government is preparing to launch the National Sports Education Board under the ‘Khelo India’ initiative to promote sports at all levels. In addition, the ‘Study in India’ programme aims to attract foreign students to Indian higher education institutions.
Social Initiatives
In view of empowering women, the Interest Subvention Programme for Women SHG will extend to all districts in India. Also, Rs 1 lakh loan will be provided for SHG women members under the Mudra Scheme.
Infrastructure Development Plans
In infrastructure, the government is planning to develop state road networks through the Bharatmala project’s second phase. Moreover, an outlay of Rs. 10,000 crore has been approved for FAME Scheme’s Phase-II for three years.
Space Sector and Future Aims
As India emerges as a critical space power, the government plans to commercially exploit its capabilities. A public sector enterprise, New Space India Limited (NSIL) was incorporated to reap ISRO’s benefits. The roadmap for the future is focused on simplifying procedures, incentivizing performance, curbing red-tape, optimizing technology usage, and accelerating mega programs and services.
