Union Budget 2020: Key Highlights of Central Budget 2020 in All Sectors

May 4, 2020

The Union Budget 2020 had a clear theme and some key points. Take a look at some of the union budget 2020 highlights.

The prominent highlights of Budget 2020 were the themes of the Budget: to create an “Aspirational India” with better standards of living with access to improved standards of health, education and employment for all sections of society with better jobs for all. Furthermore, the economic development for all, with the catchphrase “Sabka Saath, Sabka Vikas, Sabka Vishwas” and generate an environment suitable for a caring society - both humane and compassionate.

The budget themes were based on the creation of a corruption-free, policy-driven, good governance ideology having a clean and sound financial sector. The emphasis of the budget 2020 to create an aspirational India was on Agriculture, Irrigation, and Rural Development, Wellness, Water, and Sanitation and Education and Skills.

Budget 2020 Highlights were in the following Sectors:

Agriculture, Irrigation and Rural Development

  • Rs. 2.83 lakh crore to be allocated – for Agriculture, Irrigation & allied activities, a sum of Rs. 1.60 lakh crore and for Rural Development & Panchayati Raj, a sum of Rs. 1.23 lakh crore.
  • Comprehensive measures for 100 water-stressed districts proposed.
  • Blue Economy: promotion of fisheries’ exports, increase in fish production, to involve youth in fisheries extension, etc.
  • A seamless national cold supply chain with refrigerated coaches for perishables to be built by Indian Railways - Kisan Rail.
  • Krishi Udaan to be launched by the Ministry of Civil Aviation to cover both international and national routes.
  • PM-KUSUM scheme to be expanded for irrigation and solar power.
  • Village Storage Scheme which is a warehousing scheme which will benefit the farmers by increasing their bargaining power while reducing transport and logistical expenses.

Wellness, Water and Sanitation

  • The Health sector has been allocated Rs. 69,000 crore.
  • Rs. 6400 crore (out of Rs. 69,000 crores) for PM Jan Arogya Yojana (PMJAY)
  • By 2024 - there will be - Jan Aushadhi Kendra Scheme which will make available 2000 medicines and 300 surgicals in all districts.
  • The flagship cleanliness program Swachh Bharat Mission has been allocated Rs.12, 300 crore allocation for use in 2020-21.

Education and Skills

  • Education as a sector will receive Rs. 99,300 crore and Rs. 3000 crore for skill development in 2020-21.
  • For education related to employment – about 150 higher educational institutions will start courses by March 2021 which have apprenticeship embedded degrees/diplomas.
  • External Commercial Borrowings and FDI to be enabled for the education sector.

 

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Budget Highlights in Economic Development

Industry, Commerce and Investment

  • The amount allocated Rs. 27,300 crore for 2020-21.
  • Five new smart cities proposed to be developed.
  • Manufacturing encouraged by way of schemes especially for mobile phones, electronic equipment and semiconductor packaging.
  • National Technical Textiles Mission to be set up at an estimated outlay of Rs 1480 crore to position India as a global leader in Technical Textiles.
  • A new scheme called NIRVIK was launched to achieve higher export credit disbursement by providing better insurance to exporters.
  • As an important incentive, there is a proposed scheme for Revision of duties and taxes on exported products. Duties which were not earlier reimbursable now to be reimbursed.

Infrastructure

  • Over the coming 5 years infrastructure will see an investment of Rs.100 lakh crore.
  • For Transport infrastructure, Rs.1.7 lakh crore has been proposed in 2020-21.
  • Highways: Accelerated development of highways to be undertaken and Proposed to monetise at least 12 lots of highway bundles of over 6,000 Km before 2024.
  • Airports: The Udaan scheme by the government has targeted 2024 as the year by which they will finish developing 100 more airports.
  • Power: Rs.22,000 crores proposed for power and renewable energy sector in 2020-21 and expansion of national gas grid from the present 16,200 km to 27,000 km proposed.

New Economy

  • To take advantage of new technologies the government will enable the private sector to build Data Centre parks throughout the country and Rs.6,000 crore proposed for the Bharatnet programme in 2020-21.
  • Measures proposed to benefit Start-ups: such as digital platforms, knowledge translation clusters and early life funding.
  • Mapping of India genetic landscape – two new national level Science Schemes.
  • Giving impetus to the National Mission on Quantum Technologies and Applications a sum of Rs.8,000 crore has been proposed to be given over five years.

Budget Highlight 2020 – Caring Society

  • Focus on:  Women & Child, Social Welfare and Culture and Tourism
  • Allocation of Rs. 35,600 crore for nutrition-related programmes for the FY 2020-21.
  • Rs.28,600 crore proposed for women-specific programs.
  • Rs. 85,000 crore for welfare of SC and OBC as well as Rs. 53,700 crore for ST.
  • Rs. 9,500 crore for senior citizens and Divyang scheme.

Culture & Tourism

  • Allocation of Rs. 2500 crore for 2020-21 for tourism promotion.
  • Rs.3150 crore proposed for the Ministry of Culture for 2020-21.
  • Identification of 5 unique archaeological sites, which will be developed as tourist spots along with museums on site.

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Environment & Climate Change

  • An amount of Rs.4,400 crore has been allocated for Environment & Climate Change for 2020-21.
  • Old thermal power plants with carbon emission above the pre-set norms have been proposed to be closed.  
  • The G20 presidency summit is to be hosted by India in 2022. To this end, a sum of Rs. 100 crore has been allocated for the preparations.  

Financial Sector

  • The Deposit Insurance Coverage has been increased to Rs. 5 lakh from Rs.1 lakh per depositor by the Deposit Insurance and Credit Guarantee Corporation (DICGC).
  • The debt recovery eligibility limit that has been set for NBFCs has been reduced from Rs. 500 crore to Rs 100 crore – for asset size and Rs 1 crore to Rs 50 lakh – for loan size.
  • Private capital in the Banking system.
  • MSME's debt restructuring by RBI given an extension of one year till March 31, 2021.

Infrastructure Financing

  • Rs.103 lakh crore National Infrastructure Pipeline projects.
  • The allocation of funds to the tune of Rs 22,000 crore as equity support for IIFCL and such Infrastructure Finance Companies.
  • An International Bullion exchange(s) by IFSC, GIFT city to be set up as an additional global option for trade with the approval of the regulator.
  • Disinvestment: Government to sell a part of its holding in LIC by way of Initial Public Offer (IPO).

Direct Tax

Personal Income Tax:

  • Reduction in slab rates of tax.
  • New and simplified personal income tax regime proposed Measures to pre-fill the income tax return initiated for the individual who opts for the new regime.

 

Income Slab and Taxability (Rs.)

Old tax rates

New tax rates

0-2.5 Lakh

Exempt

Exempt

2.5-5 Lakh

5%

5%

5-7.5 Lakh

20%

10%

7.5-10 Lakh

20%

15%

10-12.5 Lakh

30%

20%

12.5-15 Lakh

30%

25%

Above 15 Lakh

30%

30%

Must Read: Tax Benefit on Personal Loan

Corporate Tax

Indian corporate tax rates now amongst the lowest in the world. Tax rate of 15% extended to new electricity generation companies.

  • Dividend Distribution Tax (DDT) removed: for India a more attractive investment destination. However, deductions are allowed for dividends received by holding companies from its subsidiary.

Start-ups with turnover up to Rs. 100 crore get 100% deduction for 3 consecutive assessment years out of 10 years. To apply for a business loan with Fullerton India, please click here.
Turnover threshold increased for business conducting less than 5% business in cash - for audit to Rs. 5 crores from Rs. 1 crore.

Cooperatives

There has been parity brought between cooperatives and the corporate sector.

  • Option to cooperative societies to be taxed at 22% + 10% surcharge and 4% cess with no exemption/deductions.
  • Cooperative societies exempted from Alternate Minimum Tax (AMT).

For foreign investments made in infrastructure and priority sectors before 31st March 2024 with a minimum lock-in period of 3 years - 100% tax exemption to the interest, dividend and capital gains income on investment.

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