When it comes to the economy, dark days do loom large over India. May it be growth (lowest since 2008), inflation (highest in the last six years), or revenue collection (lowest in 10 years), the Indian economy is faltering. Hence, there is little leeway that can be assumed in the incumbent Union Budget 2020 (the first of the decade) if the economy needs to be boosted.

While presenting the decade's first Budget for India, finance minister Nirmala Sitharaman noted that the 'fundamentals of economy hold strong' as:

• The GST formalised the economy
• Due to whch efficiency was gained in logistics
• A reported 16 lakh new tax payers were also added
• Implementation of pro-poor schemes scaled up

Outlining the 2020 Budget, Sitharaman said it focuses on:

1. Aspirational India
2. Economic development for all
3. Building a caring society

• India needs to grow by 9 per cent to 10 per cent a year to become the $5 trillion economy by 2024, as projected by the government. The government is now forecasting growth will come in at 5 per cent
• The IMF, which had originally predicted 6.1 per cent growth for India in 2019, has revised that downwards to 4.8 per cent
• The government’s likely to miss its fiscal deficit target for the current fiscal year of 3.3 per cent and hike its target to as much as 4 per cent for the next financial year
• India will struggle to achieve 5 per cent GDP growth in 2020 - Economist Steve Hanke, Johns Hopkins University
• Investment is forecast to grow at less than 1 per cent -- the lowest since 2004-05
• India's unemployment rate rose to 7.5 per cent during September-December 2019 quarter, according to data released by think-tank Centre for Monitoring Indian Economy

Major steps and initiatives taken by the government in finance

• 3.8 percent fiscal deficit estimated
• GDP nominal growth expected at 10 per cent
  
• Govt to sell part of holding LIC via IPO (initial public offering)- partial LIC disinvestment
  
• Partial credit guarantee for NBFCs
• New law for netting of financial contracts
  
• Mechanism to end liquidity crisis
  
• NRIs (non resident Indians) can invest in certain govt securities

Aspirational India: Health

An allocation of Rs 69000 crore was announced for the health sector. The FM promised a holistic vision for national healthcare and emphasised that healthcare in India will be aided by innovation. E.g. AI (artificial intelligence) to be used for Ayushman Bharat Scheme. She also announced the setting up of more hospitals.

Aspirational India: Agriculture, Irrigation and Rural Development

Sitharaman announced at the outset that this budget provides heavily for agriculture and farmers, even stating that she is driven to double income for farmers. The FM expressed that there is a pressing need liberalise farm markets, and in conjunction introduced the idea of a model agricultural land leasing act. She also emphasised rural development, along with better irrigiation in this section. In order to do so, she introduced the following allocations and goals.

• Zero budget national farming
• Rs 2.83 lakh cr allocation for agriculture and irrigation
• Agriculture credit target for 2020 set at Rs 15 lakh crore
• Village storage scheme for farmers, zero budget natural farming
• Krishi Udaan by civil aviation ministry for air transport of such commodities over longer distances
• Indian railways to set up 'kisan rail'
• Govt to provide help to geo-tag warehouses
• Plan for 100 water stressed districts
• Scheme for 20 lakh farmers to set up solar pumps
• Balanced use of fertilisers
• 108 million metric tonne milk production by 2021
• Propose raising fish production to 200 lakh tonne
• NABARD refinance scheme to be expanded
• Village credit card scheme
• Dhanya Lakshmi scheme for women in villages

Infrastructure and economic development for all

While talking about the second focus of the budget, the FM noted that entrepreneurship has been the strength of India. The union budget has made sizebale allocations across silos.

• Further reforms for transparent price discovery for natural gas
• 22000 crore for power sector
• 8000 crore for quantum technology in next 6 years
• Two national level science schemes
• Expand Jan Aushadhi Scheme
• 1 lakh gram panchayats to be connected via Bharat Net
• 6000 crore for Bharat Net
• Data Centre parks to be set up across the country
• National Gas Grid to be expanded
• Reforms to help stressed DISCOMS (distribution companies)
• Delhi-Mumbai Expressway by 2023
• 100 more airports by 2024
• Plans to energise economic activity along river banks
• Need to enhance sea ports
• High Speed Mumbai-Ahmedabad train
• More Tejas-type trains
• 4 station redevelopment projects under PP model
• 2000 km of strategic highways to be built, 11000 km of track electrification
• Accelerated development of highways
• National Logistics Policy to be released soon
• Big push on infrastructure - 100 lakh crore
• National Technical Textiles Mission to be set up
• 1480 crore outlay for textile sector
• 27300 crore for industrial development by 2021
• Digital refund of duties for exporters
• Boost domestic manufacturing - electronic equipment, mobile phone, medical devices
• 5 new smart cities in collaboration with states
• Investment clearance cell to be set up for end to end facilitation

Taxation

While enumerating various reforms to tax regime, the FM announced a host of tax exemptions, waivers and lowered tax rates across portfolios.

• Health cess imposed on medical equipment import
• Custom Duty raised on footwear and furniture
• AADHAR based tax verification introduced
  
• Review of customs duty exemptions in September 2020
  
• GST refund process simplified
  
• Electronic invoice implementation in phases
  
• New digital scheme for tax litigation
  
• PAN to be instantly allotted online against Aadhar
• Vivaad se Vishwas Scheme: Defaulter to pay only disputed tax and no penalty or interest by 31 March 2020, post which additional amount can be paid till June 2020
  
• Measure to promote affordable housing – tax holiday extended for developers
  
• Concession on real estate transactions
  
• Turnover threshold for audit raised to Rs 5 crore from 1 crore
• Company audit requirements eased
• Taxes on ESOPs (employee stock ownership) in start-ups deferred by 5 years
  
• 100% per cent tax exemption
  
• Corporate Tax at 15%
  
• Dividend Distribution Tax removed, dividend taxed only for recipients
• Amendment to Factoring Regulation Act to aid MSMEs
• Pension Fund Regulatory and Development Authority (PFRDI) Act amendments
• No criminal liabilities for civil acts
• Auto-enrolment in universal pension scheme
• App-based invoice financing loans for MSMEs
  
• 5958 cr allocated for Ladakh
• 30757 cr allocated for J&K
• Insurance for depositors raised to 5 lakh from 1 lakh
• Robust mechanisms in place to monitor all PSU banks
• Depositors’ money safe
• 100 cr for hosting G20 in 2022
• National Recruitment Agency to be set up
• Tax payers’ charter to be enshrined in statutes
• Amendments for Companies Act
• Tax payer charter proposed to free citizens from tax harassment

Caring society

Talking about climate change, the environment, women, and the disenfranchised caste and tribal groups, the FM announed the following.

• 4400 crore allocation for clean air and climate change policy
  
• Aim to reduce carbon footprint - Warning to old thermal plants
  
• Committed to preserve environment, tackle climate change
  
• 23150 crore for culture ministry
  
• 2500 crore for tourism sector
  
• Institute of Heritage and Conservation to come up soon
  
• Aim to set up more museums
  
• 5 archaeological sites to be made iconic
  
• Proposal to end manual scavenging
• 53700 crore for welfare of STs
• 85000 crore for SCs and OBCs for 2021
  
• 35600 crore for nutritional schemes
  
• Gross enrollment ratio of girls higher than boys in elementary level

• The Fm announced a new, optional simplified personal income tax regime for those not seeking exemptions
• Revised income Tax slabs