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Union Budget 2022-23: Indian Economy snapshot & current status

Posted on February 17, 2022February 22, 2022 by admin

Union Budget 2022-23: Indian Economy snapshot & current status

~ GDP growth ~

Growth is estimated at 9.2 percent for FY22.
Gross value addition in agriculture and industry is estimated to grow by 3.9 percent and 11.8 percent, respectively.
Gross investment and exports will be the bigger growth drivers.
In FY23, growth may increase between 8.0 percent and 8.5 percent.

~ Fiscal deficit ~

The fiscal deficit reached 46.2 percent of the full year target during April−Nov 2021, amidst a rise in tax collections. The deficit for FY22 is expected to be 6.9 percent.
In FY23, government finances will witness consolidation in FY22, after an uptick in deficit and debt indicators in FY2021. The deficit is expected to be –6.4 percent.

~ Inflation ~

In Dec 2021, the CPI inflation increased to a five month high of 5.6 percent with core inflation remaining high at 6.1 percent. Inflation may increase due to imported inflation, especially from elevated global energy prices and supply-chain disruptions.

~ Domestic Credit growth ~

Domestic credit growth was 9.8 percent in Q3 FY22 against 8.5 percent in FY21. Credit growth to the industry sector improved but has yet to recover in the services sector.
In FY23, demand for credit growth may increase gradually as economic activity returns to normalcy. Banks are well capitalised and the reduced NPAs level will improve lending activities.

~ Current Account Deficit ~

Current account recorded a deficit of 0.2 percent of GDP in H1 FY22, led by a rising trade deficit.
In FY23, the current account may remain in deficit as imports rise with the economic recovery. Stronger exports may keep the deficit in check.

~ FDI ~

Net FDI inflows amounted to US$ 24.7 billion for April-November 2021, 29.5 percent lower than April-November 2020.
In FY23, FDI is expected to remain volatile due to global uncertainties associated with the spread of the infection and the pace of monetary policy tightening in advanced countries.

~ Other economic parameters ~

RBI kept repo rate unchanged at 4 percent since May 2020; continues with an accommodative monetary policy stance.
Forex reserves touched US$ 633.6 billion, as of Dec 2021
Net FDI inflows amounted to US$ 24.7 billion for April−November 2021, 29.5 percent lower than those for April−November 2020
CPI averaged at 5.2 percent in April−December 2021, driven primarily by food inflation and high fuel prices
Merchandise exports expanded by 49.7 percent to US$ 301.4 billion in April−December 2021, exceeding the pre-pandemic levels.

Highlights of Union Budget 2022-23: Analysis & Important points

Union Budget 2021-22

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Highlights of Union Budget 2022-23: Analysis & Important points

Posted on February 15, 2022April 8, 2023 by admin

Highlights of Union Budget 2022-23 – Analysis & Important points

Union Finance Minister Nirmala Sitharaman presented the Union Budget 2022 on February 1, 2022. The Budget proposals for this financial year rest on health and well-being, infrastructure, inclusive development, energy transition and climate action, financing of investments and ‘Minimum Government, Maximum Governance’. India’s economic growth estimated at 9.2% to be the highest among all large economies. 60 lakh new jobs to be created under the PLI schemes in 14 sectors. Significant announcements regarding digital currency, e-passports and a slew of infrastructure projects were announced.

Highlights & Important Point of Union Budget 2022-23

~ Infrastructure Sector ~

- PM Gati Shakti National Master Plan at a cost of ₹20,000 crore. PM Gati Shakti initiative was announced last year with the aim of ensuring better coordination in implementation of infrastructure development projects. She said 100 Gati Shakti cargo terminals would be built over the next three years.
- National Highways network to be expanded by 25,000 kms in 2022-23. A National Master Plan on Expressways will be formulated in 2022-23 to give greater push to roadways development.
- Parvat Mala project would be launched for construction of 60 km of ropeway, more sustainable for hilly areas compared to traditional roads.
- 400 new generation Vande Bharat trains to be manufactured in the next 3 years.
- 100 Gati Shakti cargo terminals in the next 3 years.
- Four multi-modal national parks contracts will be awarded in FY23.

~ Agriculture Sector ~

Procurement of wheat, paddy, kharif and rabi crops, benefiting over 1 crore farmers.
NABARD to facilitate funds with blended capital to finance startups for agriculture & rural enterprise.
Government to promote funds for blended finance (government share limited to 20%) for sunrise opportunities such as climate action, agri-tech, etc.
Ken-Betwa river linking project at a cost of Rs 44,000 crore, to benefit 9.0 lakh hectare of farmer land
₹2.37 lakh crore allocated towards direct payments for purchasing wheat and paddy at minimum support price.
Money spent on procurement of rabi wheat and kharif paddy would benefit 1.63 crore farmers.
Govt would promote chemical-free, natural farming across the country, special Kisan Drones would be used for crop assessment and spraying of pesticides.

~ Education Sector & Skill Development ~

A Digital University will be established, and it will be based on networked-hub model and ensure quality education in various Indian languages.
‘One class, one TV channel’ program of PM eVIDYA will be expanded from 12 to 200 TV Channels to provide supplementary education in all regional languages, to make up for loss of formal education due to Covid.
GIFT-IFSC World-class foreign universities and institutions to be allowed in the GIFT City.
Digital Ecosystem for Skilling and Livelihood (DESH-Stack e-portal) will be launched to empower citizens to skill, reskill or upskill through on-line training.
Startups will be promoted to facilitate ‘Drone Shakti’ and for Drone-As-A-Service (DrAAS).
Virtual labs and skilling e-labs to be set up to promote critical thinking skills and simulated learning environment. High-quality e-content will be developed for delivery through Digital Teachers.

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~ Defence Sector ~

Union Budget 2022-23 would give a push to self-reliance in defence production as part of Atma Nirbhar Bharat initiative.
68 per cent of the capital procurement budget in the sector was earmarked for domestic procurement.
Budget announced opening up defence R&D (research and development) to private industry, startups and academia. 25% of R&D budget to be set aside for this.
Private industry will be encouraged to take up design and development of military platforms and equipment.
Startups will be promoted to facilitate ‘drone shakti’ to promote drone usage.

~ Financial Sector ~

Setting up of 75 digital banking units across 75 districts to push digital payments and fin-tech innovations in the country.
Green bonds will be issued for upping green infrastructure.
Amendments to the Insolvency and Bankruptcy Code to enhance the resolution process, including for cross-border insolvency; to establish a centre to reduce the process of voluntary winding up of companies to six months.
An International Arbitration Centre to be set up for timely settlement of disputes under international jurisprudence.

~ Digital Currency & Blockchain ~

RBI to introduce ‘digital rupee’ using blockchain technology in 2022-23. Introduction of Central Bank Digital Currency (CBDC) will give a big boost to digital economy. Digital currency will also lead to a more efficient and cheaper currency management system.

~ Taxation provisions ~

Taxpayers can file within 2 years an updated return if there is any anomaly in their filing.
tax relief to persons with disabilities making parents or guardian eligible for benefits at 60.
Tax deduction limit for NPS (National Pension Scheme) account of state government employees was increased from 10 per cent to 14 per cent at par with the central government employees.
Cooperative societies pay 18.5% Alternate Minimum Tax (AMT) rate and companies pay 15%. From now cooperative too will have to pay only 15%.
Surcharge on cooperative societies earning Rs 1-10 crore a year was also reduced to seven per cent.
Virtual digital assets will be brought under tax regime.
Long term capital gains surcharge will be capped at 15%.
Custom duty on cut and polished diamond reduced to 5%.
Custom duty on imitation duty slashed.
Duty on Sodium cyanide increased.
Duty on umbrellas raised to 20%.
Steel scrap duty extended for another year.
Anti-dumping on stainless steel is being revoked.
Duty reduced on shrimp aquaculture.
Slash custom duty on cut and polished diamonds to five per cent.
Imported umbrellas became costlier as customs duty on such import was raised to 20 per cent.
Concessional customs duty on import of capital goods to be phased out, the initial rate of 7.5% to be imposed.
More than 350 exemptions on importing some agri products, chemicals, drugs, etc., will be phased out.
Customs duty on imitation jewellery was raised to discourage their imports.
Duty on specified leather, packaging boxes reduced to incentivise exports.
Customs duty exemption on steel scrap is being extended by a year to help MSMEs.
Customs duty on methanol to be reduced.
Levying additional excise duty at Rs.2 per litre on unblended fuel to encourage fuel blending.

~ Taxation on Digital Assets ~

Virtual digital assets to be taxed at 30%. Any income from transfer of any virtual digital asset shall be taxed at the rate of 30 per cent. No deduction in respect of any expenditure or allowance shall be allowed while computing such income except for the cost of acquisition. Further, loss from transfer of virtual digital asset cannot be set off against any other income.
Gift of virtual digital asset is also proposed to be taxed in the hands of the recipient”. Any transaction in virtual digital asset like cryptocurrency, NFTs will attract a TDS (tax deduction at source) at the rate of one per cent.

~ Health & Welfare sector ~

An open platform for the National Digital Health Ecosystem will be rolled out. It will consist of digital registries of health providers and facilities, unique health identity and universal access to health facilities.
Rs. 60,000 crore allocated to cover 3.8 crore households in 2022-23 under Har Ghar, Nal se Jal.
Housing for All Rs. 48,000 crore allocated for completion of 80 lakh houses in 2022-23 under PM Awas Yojana.
National Tele Mental Health Programme’ for quality mental health counselling and care services to be launched. A network of 23 tele-mental health centres of excellence will be set up, with NIMHANS being the nodal centre and International Institute of Information Technology-Bangalore (IIITB) providing technology support.
Saksham Anganwadi Integrated benefits to women and children through Mission Shakti, Mission Vatsalya, Saksham Anganwadi and Poshan 2.0.
Two lakh anganwadis to be upgraded to Saksham Anganwadis.

~ Capital expenditure ~

Substantial hike in capital expenditure from Rs 5.54 lakh crore in FY22 to Rs 7.5 lakh crore in FY23. It is an increase of 35.4 per cent and stands at 2.9 per cent of GDP.
India will auction spectrum in 2022 to roll out 5G mobile services by private firms.
Bharat Net optical fibre project will be expedited to complete in 2025.

~ Startups ~

Regulatory framework for venture capital to be reviewed; an expert committee to be set up.
Tax holiday extended for start-ups incorporated up to 31 March 2023 and for new manufacturing companies commencing operations by 31 March 2024.
Venture Capital and Private Equity invested more than Rs. 5.5 lakh crore last year facilitating one of the largest start-up and growth ecosystem.

~ Corporates ~

- Infrastructure status accorded to data centres and energy storage systems to facilitate credit availability
- Additional INR 195 billion to be allocated to PLI for manufacturing solar PV modules
- The Emergency Credit Line Guarantee Scheme for MSMEs extended up to March 2023 with an additional guarantee cover of INR 500 billion for hospitality and related enterprises
- Special Economic Zone Act to be replaced with a new legislation to enable the States’ partnership in development of enterprise and service hubs, optimally utilise the available infrastructure, and enhance export competitiveness
- Concessional customs duty on capital goods and project imports to be gradually phased out to support growth of the domestic capital goods sector
- Rs 2 lakh Crore additional credit for Micro and Small Enterprises to be facilitated under the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE).
- Raising and Accelerating MSME performance (RAMP) programme with an outlay of Rs 6000 Crore to be rolled out.
- Accelerated Corporate Exit Centre for Processing Accelerated Corporate Exit (C-PACE) to be established for speedy winding-up of companies.
- AVGC Promotion Task Force An animation, visual effects, gaming, and comic (AVGC) promotion task force to be set-up to realize the potential of this sector.
- Telecom Sector Scheme for design-led manufacturing to be launched to build a strong ecosystem for 5G as part of the Production Linked Incentive Scheme.
- Sunrise Opportunities: Government contribution to be provided for R&D in Sunrise Opportunities like Artificial Intelligence, Geospatial Systems and Drones, Semiconductor and its eco-system, Space Economy, Genomics and Pharmaceuticals, Green Energy, and Clean Mobility Systems.

~ e-Vehicles and energy ~

Energy efficiency and saving measures will be promoted.
A battery-swapping policy to be brought out with interoperability standards to boost the EV ecosystem.
Rs 19,500 crore allocation in PLI for solar modules.

~ e-Passport ~

Issuance of e-passports with futuristic tech to be introduced in 2022-23.

~ Employment ~

Production Linked Incentive (PLI) Scheme for achieving Aatmanirbhar Bharat has received an excellent response, potentially creating 60 lakh new jobs and additional production of 30 lakh crore during the next Keycap digit five years.
PLI schemes across 14 sectors have achieved a tremendous response and created 60 lakh job opportunities.

~ Energy Transition and Climate Action ~

Additional allocation of Rs. 19,500 crore for Production Linked Incentive for manufacture of high efficiency solar modules to meet the goal of 280 GW of installed solar power by 2030.
Set-up of government-backed funds for climate action

~ Vibrant Villages Programme ~

Vibrant Villages Programme for development of Border villages with sparse population, limited connectivity and infrastructure on the northern border.

~ Urban Planning ~

Modernization of building bye laws, Town Planning Schemes (TPS), and Transit Oriented Development (TOD) will be implemented.

~ Land Records Management ~

Unique Land Parcel Identification Number for IT-based management of land records.

~ Export Promotion ~

Special Economic Zones Act to be replaced with a new legislation to enable States to become partners in ‘Development of Enterprise and Service Hubs’.

Union Budget 2021-22

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Highlights of Union Budget 2021-22: Analysis & Important points

Posted on February 28, 2021February 15, 2022 by admin

Highlights of Union Budget 2021-22 – Analysis & Important points

Download Union Budget 2021-22 Highlights PDF

The Union Budget of India for 2021 – 2022 was presented by the Finance Minister, Nirmala Sitharaman on 1 February 2021, in a backdrop of a economic stress due to COVID-19 pandemic. FM Sitharama chose to go completely paperless to present her third budget. The budget did address several key expectations of individuals and corporates. The FM reiterated the government’s vision towards developing an Atma Nirbhar Bharat. The budget has categorically divided Part A of the budget into six primary pillars – health and wellbeing, physical & financial capital, infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D, minimum government and maximum governance. During Budget presentation, the FM briefed the parliament on the financial impact of the AtmaNirbhar Bharat packages and continued to reiterate the need to establish an AtmaNirbhar Bharat – a self-reliant India. Budget 2021 focused on 6 major pillars, with healthcare and infrastructure sectors enjoying the maximum levels of attention.

Due to ongoing period of unprecedented economic stress, the Union Budget for FY22 has been very liberal in terms of the targeted fiscal deficit. The Government has taken liberty to spend enough to bring about economic revival. The focus on healthcare, infrastructure and the financial sector indicates that the government is steadily taking more robust measures to realize their vision of Atmanirbhar India.

The Union Budget is the annual financial report of India; an estimate of income and expenditure of the government on a periodical basis. As per Article 112 of the Indian Constitution, it is a compulsory task of the government. India’s first Budget was presented on 18 February 1860. R K Shanmukham Chetty, the first finance minister of independent India presented the Union Budget on 26 November 1947.

Highlights & Important Point of Union Budget 2021-22

~ Healthcare and Other Allied Services ~

- The Finance Minister placed huge focus on healthcare and allied services. The total budgetary expenditure towards health and wellbeing for the upcoming financial year 2021-2022 was increased multifold to Rs. 2,23,846 Crores from just Rs. 94,452 Crores, marking a massive increase of over 137%.
- Rs. 35,000 Crores was earmarked towards COVID-19 vaccinations in 2021-2022.
- Plan to roll out pneumococcal vaccine throughout the country.
- PM Atmanirbhar Swasth Bharat Yojana – Around Rs. 64,180 Crores was earmarked to be spent over a period of 6 years towards a new scheme – PM Atmanirbhar Swasth Bharat Yojana, wihich is centered around revamping and developing primary, secondary, and tertiary healthcare systems across India.
- Three other schemes with regards to Nutrition, Water Supply, and Cleanliness were also announced
  1. Mission Poshan 2.0 for improving nutritional outcomes
  2. Jal Jeevan Mission (Urban) with a total capital outlay of Rs. 2,87,000 Crores over a period of 5 years to ensure universal water supply to over 2.86 crore household tap connections and liquid waste management in 500 AMRUT cities, and
  3. Urban Swachh Bharat Mission 2.0 for promoting better cleanliness, at a total capital outlay of Rs. 1,41,678 Crores over 5 years from 2021-2026.
  
  Combating Air Pollution
- To address the problem of rising air pollution, Rs. 2,217 Crores is provisioned for combating the problem in 42 urban centres, which carry a population of more than a million.
  
  Vehicle Scrapping Policy
- A new voluntary vehicle scrapping policy was also proposed to phase out polluting and old vehicles. Personal vehicles above 20 years age and commercial vehicles above 15 years age to undergo fitness tests in automated fitness centres.

~ Infrastructure Sector ~

The Budget introduced several new schemes and measures that would bolster the infrastructure in the country.
Roads & highways
Proposal to provide around Rs. 1,18,101 Crores to the Ministry of Road Transport and Highways
An additional 8,500 kilometers of roads and highways will be awarded under the Bharatmala Pariyojana project, and around 11,000 more kilometers of highways would be completed by March, 2022.
Plan to develop Economic corridors in the states of Tamil Nadu, Kerala, West Bengal, and Assam are also to undergo construction in the near future.
a. 3,500 km of National Highway works in Tamil Nadu at an investment of Rs. 1.03 Lakh Crores
b. 1,100 km of National Highway works in Kerala at an investment of Rs. 65,000 Crores
c. 675 km of highway works in West Bengal at a cost of Rs. 25,000 Crores
d. Works of more than Rs. 34,000 Crores covering more than 1,300 kms of National Highways to be undertaken in Assam in the coming three years.

Railways
Budget 2021 provides for Rs. 1,10,055 Crores towards the expenditure to be incurred by Indian Railways.

Urban infrastructure
• Augmentation of public bus transport services at a cost of around Rs. 18,000 Crores through the Public Private Partnership model
• Around 1,016 kilometers of metro and RRTS being constructed in 27 cities
• Central counterpart funding to be provided to:
a. Kochi Metro Railway Phase II
b. Chennai Metro Railway Phase II
c. Bengaluru Metro Railway Project Phase 2A and 2B
d. Nagpur Metro Rail Project Phase II
e. Nashik Metro
The Western Dedicated Freight Corridor (DFC) and Eastern DFC would likely be formally commissioned by June 2022. Several other DFC projects such as the Kharagpur to Vijayawada corridor, Bhusaval to Kharagpur to Dankuni corridor, and Itarsi to Vijayawada corridor are also under the pipeline.
Additionally, 100% electrification of Broad-Gauge routes is also expected to be completed by December, 2023.
To promote further safety, an automatic train protection system is also to be implemented, which would work to eliminate train collisions due to human error.

~ Power Sector ~

To introduce a revamped power distribution sector scheme with a capital outlay of Rs. 3,05,984 Crores over a period of 5 years
To launch a Hydrogen Energy Mission in 2021-22 for generating hydrogen from green power sources.

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~ Financial reforms ~

A single Securities Markets Code has been proposed, which would rationalize and consolidate multiple securities laws including the SEBI Act, 1992, the Depositories Act, 1996, the Securities Contracts (Regulation) Act, 1956, and the Government Securities Act, 2007.
Formation of an institutional framework for the corporate bond market, an investor charter for all financial products, and setting up of regulated gold exchanges.
Proposal to increase FDI limit of insurance companies from 49% to around 74%, which would effectively enable foreign ownership in the sector.
Government of India has proposed to start up an Asset Reconstruction Company (ARC) and an Asset Management Company (AMC) to take over stressed assets of PSBs for value realization. Around Rs. 20,000 Crores has been earmarked for recapitalization of PSBs in the year 2021-2022.

~ Fiscal Position ~

Union Budget estimates for expenditure in 2021-2022 pegged at Rs. 34.83 Lakh Crores – including Rs. 5.54 Lakh Crores as capital expenditure, an increase of 34.5% over the BE figure of 2020-2021.
The Contingency Fund of India to be augmented from Rs. 500 Crores to Rs. 30,000 Crores through Finance Bill
Fiscal deficit for FY22: Budget estimate at 6.8% of GDP
Fiscal deficit for FY21: Revised estimate at 9.5% of GDP

~ Taxation proposals ~

The budget proposed that senior citizens aged 75 and above, who receive only pension income and interest on deposits, need not file their annual income tax returns. The paying bank would be responsible for deducting taxes from the concerned senior citizen’s income and depositing it on their behalf.
The turnover threshold limit for tax audits would be raised to Rs. 10 Crore from Rs. 5 Crore for assessees who carry out 95% of their transactions through digital means.
Additional deduction of Rs. 1.5 Lakhs under Section 80EEA of the Income Tax Act, offered on the interest paid on home loans for affordable housing, was extended till March 31, 2022. Affordable housing projects to be eligible to avail a tax holiday for one more year – till 31st March, 2022.
ULIP proceeds will be taxable for salaried employees making a contribution to EPF over and above Rs. 2.5 Lakhs during any year. In such cases, the interest on contributions over Rs. 2.5 Lakhs will be taxable as a part of the employee’s total income. In the case of ULIPs, if the premiums paid during any year exceed Rs. 2.5 Lakhs, the proceeds from the policy will be taxable as capital gains at the time of maturity. Proceeds paid out on death, however, remain exempt from tax.
Reduction in time limit for reopening of income tax assessment from 6 years to 3 years – only in cases of serious tax evasion, where there is evidence of concealment of income of Rs. 50 Lakhs or more in a year, the time limit for reopening income tax assessment to be 10 years.
Faceless Income Tax Appellate Tribunal Centre: All communication between the Tribunal and the appellant to be electronic.
Dividend payment to REIT/ InvIT to be made exempt from TDS.

~ Rationalization of Customs Duty ~

The Finance Minister proposed to review over 400 old exemptions and sought to bring out a revamped customs duty structure by October, 2021.
Union Budget 2021 aims to promote domestic manufacturing and self-reliance, several key measures with regard to customs duty were proposed. This included an increase in the customs duty on the import of certain electronic and mobile phone parts, solar inverters, solar lanterns, capital equipment and auto parts, cotton, raw silk and silk yarn, and denatured ethyl alcohol, among others.
In an attempt to reduce the burden on MSMEs and other small industries, the customs duty on various key products was effectively reduced. Non-alloy stainless steel products, iron and steel scrap, copper scrap, nylon chips and fibers, and naphtha, among others were on the list. This move can help reduce the cost of manufacturing.
To boost domestic MSME production and demand for their products, the customs duty on a few other products were also raised. This included steel screws, plastic builder wares, prawn feed, and synthetic gemstones among others. The exemption given to imported leather goods also stands withdrawn.

~ Education Sector ~

A Central University to be set up in Leh for accessible higher education in Ladakh.
More than 15,000 schools to be qualitatively strengthened to include all components of the National Education Policy (NEP)
100 new Sainik Schools will be set up in partnership with NGOs/private schools/states
Over Rs. 3,000 Crores to be provided for realigning the existing scheme of National Apprenticeship Training Scheme (NATS) for providing post-education apprenticeship, training of graduates and diploma holders in Engineering.

~ Disinvestment ~

Proposal for strategic disinvestment of BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam limited etc. to be completed in 2021-22.
Two more Public Sector Banks and one General Insurance company to be privatized.
IPO of LIC set to be issued in 2021-22.

Download Union Budget 2021-22 Highlights PDF

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Union Budget of India (Important Provisions & Facts) – Economics Notes for APSC Exam

Posted on May 18, 2020May 18, 2020 by admin

Union Budget of India (Important Provisions & Facts) – Economics Notes for APSC, UPSC and other competitive Exams

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The Union Budget of India also referred to as the Annual Financial Statement in the Article 112 of the Constitution of India, is the annual budget of the Republic of India.

Since 2017, the Government of India presents it on the first day of February so that it could be materialised before the beginning of new financial year in April. Before 2017, it was presented on the last working day of February by the Finance Minister in Parliament.

The budget, presented as the Finance bill and the Appropriation bill has to be passed by Lok Sabha before it can come into effect on 1 April, the start of India’s financial year.

On election years, an interim budget is presented in February month. An interim budget is not the same as a ‘Vote on Account’. While a ‘Vote on Account’ deals only with the expenditure side of the government’s budget. An interim budget is a complete set of accounts, including both expenditure and receipts. An interim budget gives the complete financial statement, very similar to a full budget.

Important Facts about Union Budget of India

The first Indian budget was presented by James Wilson, a Scottish economist and politician, in 1860. He did so as a ‘Finance Member of the India Council’. He is regarded as the founder of Standard Chartered Bank and ‘The Economist’ magazine.

As of now,Morarji Desai has presented 10 budgets which is the highest count followed by P Chidambaram’s 9 and Pranab Mukherjee’s 8. Yashwant Sinha, Yashwantrao Chavan and C.D. Deshmukh have presented 7 budgets each while Manmohan Singh and T.T. Krishnamachari have presented 6 budgets.

The first Union budget of independent India was presented by R. K. Shanmukham Chetty on 26 November 1947.

The Union budgets for the fiscal years 1959-61 to 1963-64, inclusive of the interim budget for 1962-63, were presented by Morarji Desai. On 29 February in 1964 and 1968, he became the only finance minister to present the Union budget on his birthday. The last four budgets he presented when he was both the Finance Minister and the Deputy Prime Minister of India.

Morarji Desai is the only Finance Minister to present two Budgets on his Birhtday i.e. February 29, 1964 and 1968.

After Desai, Indira Gandhi, the then Prime Minister of India, took over the Ministry of Finance to become the first woman to hold the post of the Finance Minister.

Pranab Mukherjee, the first Rajya Sabha member to hold the Finance portfolio, presented the annual budgets for the financial years 1982-83, 1983–84 and 1984-85.

Manmohan Singh under P. V. Narasimha Rao, in his next annual budgets from 1992–93, opened the economy, encouraged foreign investments and reduced peak import duty from 300 plus percent to 50 percent. This budget is crucial for the onset of Indian economy’s liberalization.

The Union Budget for 2019–2020 was presented by Nirmala Sitharaman on 5 July 2019. Sitharaman becoming India’s second female defence minister and also the second female finance minister after Indira Gandhi and first full-time female Finance Minister. She has also presented the Union Budget for 2019–2020.

Budget Presentation Date & Time

Until the year 1999, the Union Budget was announced at 5:00 pm on the last working day of the month of February. This practice was inherited from the Colonial Era and another reason was that until the 1990s, all that budgets seem to do was to raise taxes, budget presentation in the evening gave producers and the tax collecting agencies the night to work out the change in prices.

In 1999, Yashwant Sinha, the then Finance Minister of India in the NDA government, changed the ritual by announcing the 1999 Union Budget at 11 am.

In 2016, departing from the colonial-era tradition of presenting the Union Budget on the last working day of February, Minister of Finance Arun Jaitley, in the NDA government of Narendra Modi announced that it will now be presented on 1 February.

Rail Budget

Railway budget of India was the Annual Financial Statement of the state-owned Indian Railways, which handles rail transport in India. It was presented every year by the Minister of Railways, representing the Ministry of Railways, in the Parliament.

The Railway Budget was presented every year, a few days before the Union budget, till 2016. From 2017, the Rail Budget is merged with the General budgets, ending a 92-year-old practice of a separate budget for the nation’s largest transporter.

The last standalone Railway Budget was presented on 25 February 2016 by Mr. Suresh Prabhu.

Halwa Ceremony and Budget briefcase

The printing of budget documents starts roughly a week ahead of presenting in the Parliament with a customary ‘Halwa ceremony’ in which halwa is prepared and served to the officers and support staff involved. They remain isolated and stay in the North Block office until the Budget is presented. The Halwa is served by the Finance Minister. This ceremony is performed as a part of the Indian tradition of having something sweet before starting an important work.

Until 2018, as a part of tradition, Finance ministers carried the budget in a leather briefcase. The tradition was established by the first Finance minister of India, Mr. RK Shanmukham Chetty. On 5 July 2019, Nirmala Sitharaman, broke this tradition by carrying the budget in a Bahi-Khata, which she continued in 2020 also.

Important Budgets

First Union Budget – Independent India’s first Union Budget was presented on 26th November, 1947 by the first Finance Minister of India R K Shanmukham Chetty.

People’s Budget – Union Budget for 1968-69 presented on 29th Februray, 1968 by Sri. Morarji Desai, then Finance Minster was termed as ‘People’s Budget’ due to its ground breaking proposals such as simplified assessment for manufacturers under erstwhile Excise Law regime, abolition of spouse allowance, discontinuance of separate surcharges on earned and unearned incomes, reducing the tax assessment time to two years from 4 years, heavy penalty for tax evaders and among others.

Carrot & Stick Budget – Union Budget for 1986-87 presented on 28th Februry, 1986 by Sri. V.P. Singh, got this nick name due to its serious attempts to removal of license raj from the administration, long-term fiscal policy in-line with five year plans, a beginning of major indirect tax reforms including Excise laws related proposals, introduction of modified Value Added Tax etc.

New India’s foundation stone laying Budget – Union Budget for 1991 – 92 presented on 24th July, 1991 by Sri. Manmohan Singh, then Finance Minister could be termed as ‘New India’s foundation stone laying ceremony’ due to its path breaking proposals such attempts to overhaul India’s Export & Import policy, trade policy, slashing of import license, promotion of export sector to enable the Indian industry to compete with its global players, increase in foreign investment limits among others have shown a totally new path for the Indian economy.

Dream Budget – Union Budget for 1997 – 98 presented on 28th February, 1997 by Sri. P. Chidambaram, then Finance Minister was called the Dream Budget due to its significant proposals on Personal Income Tax and Corporate Tax regime. FM has brought down the highest Personal Income Tax rate from 40 percent to 30 percent, done away with number of surcharges, reduced royalty rates which were welcomed by larger section of the society. Another unconventional but path breaking proposal was ‘The Voluntary Disclosure of Income Scheme (VDIS) – 1997’ to allow people to come forward to disclose their undeclared wealth either in the form of cash or shares or gold or real estate assets, held in India or abroad without disclosing its source of funds. Since Scheme allowed to pay barely 30 and 35 percent of tax on such declared income, waiver hefty interest, penalty and immunity under various laws say, the Income tax law, wealth tax law and the foreign exchange law fetched very good response where more than 3,50,000 Indian citizens came forward to declare their undisclosed income or assets and committed to pay tax about Rs. 7,800 crore.

Millennium Budget – Union Budget for 2000-01 presented on 29th February, 2000 by Sri. Yashwant Sinha, then Finance Minister was a first Budget of the millennium. Finance Minister through this budget laid out a path to make India as a software hub. Introduction of Transfer Pricing Regulation under Income Tax Law to curb erosion of tax base India, phasing out of exemptions / subsidies granted for export regime, reduction in customs duty on computers from 20 per cent to 15 percent, mother boards from 20 per cent to 15 per cent, on specified capital goods for manufacture of semiconductors from 15 per cent to 5 per cent were truly shot in the arm for India’s growing software industry.

Ordinary Indians Budget – Union Budget for 2005 – 06 was presented 28th February, 2005 by Sri P. Chidambaram, then Finance Minister due to its pro poor and people oriented proposals known as Ordinary Indians or Aam Aadmi Budget. Hon’ble Finance Minister has presented one of the best union budgets in recent times. Tax proposals including upward changes in tax slabs, lowered corporate tax rates, reduction in customs duty on crude petroleum, collective Fringe Benefit Tax for employees, allowing Minimum Alternate Tax (MAT) Credit, introduction of National Rural Employment Guarantee Act (NREGA) and Right To Information Act (RTI) were truly common man’s needs.

Budget Documents & Its list

Besides the Finance Minister’s Budget Speech, there will be a set of Documents which also presented in the Parliament.

Annual Financial Statement (AFS)
Demands for Grants (DGs)
Finance Bill of the coming Financial year
Statements mandated under FRBM Act-

♦ Macro-Economic Framework Statement

♦ Fiscal Policy Strategy Statement

♦Medium Term Fiscal Policy Statement

Expenditure Budget
Receipts Budget
Memorandum Explaining the Provisions in the Finance Bill
Budget at a Glance
Outcome Budget
Economic Survey

Economic Survey

Economic Survey – The Central Government is bringing an ‘Economic Survey’ indicating survey on economic trends of the country. The Survey throw lights on agricultural, industrial production, infrastructure, employment, money supply, prices, imports, exports, foreign exchange reserves and other relevant macro and micro economic factors which have a direct impact on the Union Budget.

Go to APSC Economy Notes | Go to Assam Economy Notes

Union Budget 2019-20 – Provisions for Assam and North East India

Posted on July 6, 2019February 12, 2020 by admin

Union Budget 2019-20 - Provisions for Assam and North East India

Download Union Budget 2019-20 Highlights PDF

- Provisions related to Assam & North East India -

Union government increases allocation for eight states of Northeast India to Rs 50,169.39 crore in the union budget 2019-20 from Rs 39,201 crore of 2018-19.
Rs 4105 Crore is allocated to Oil India Limited for exploration and production, Rs 755 Crore is allocated for MSME sector.
The budget allocation for the Northeast under the North East Road Sector Development Scheme has been increased from Rs 391 crore during 2018-19 to Rs 666 crore for 2019-20.
Budget allocation of Rs. 3000 crore for the Ministry of Development of Northeastern Region (DoNER) is a gesture that the central government is extending its continued support to ensure development and thrust to the Northeast.
The increase of fund for the North East Special Infrastructure Development Scheme (NESIDS) from Rs 140 crore during 2018-19 to Rs 695 crore for 2019-20 will enable different states in the Northeast to further initiate large infrastructure activities.
Positive for North East companies as all private entity in North East will be within 25% tax rates, as corporate tax is reduced to 25% for companies with turnover upto 400 crores.
Increase in allocation for refund of central and integrated GST to North Eastern Region (NER) the Himalayan states will ensure timely refund of GST under industrial policy.”

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Union Budget 2019-20 Highlights

Interim Budget 2019

Download Union Budget 2019-20 Highlights PDF

Highlights of Interim Budget 2019-20: Analysis & Important points

Posted on February 2, 2019July 6, 2019 by admin

Highlights of Interim Budget 2019 - 20 - Analysis & Important points

Finance Minister Piyush Goyal on 1^st February, 2019, presented the interim Union Budget in Lok Sabha. The Budget is notable for its roadmap for 2030 focusing on 10 dimensions which are key growth drivers of the Indian economy.

Highlights and important points of the Interim Budget 2019

- Income Tax & other Personal Taxes -

Individual taxpayers with annual income up to Rs. 5 lakh rupees to get full tax rebate. For others, the tax rate remains unchanged.
Individuals with gross income up to 6.5 lakh rupees will not need to pay any tax if they make investments of Rs.1.5 Lakh in instruments prescribed eligible for tax savings under Section 80C.
Standard tax deduction for salaried persons raised from Rs. 40,000 rupees to 50,000.
TDS threshold on rental income raised from Rs. 1.8 lakh to Rs. 2.4 lakh. Around 3 crore middle-class taxpayers will get tax exemption due to this measure.
Benefit of rollover of capital tax gains to be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains up to 2 crore rupees; can be exercised once in a lifetime.
Benefits under Sec 80(i) BA being extended for one more year, for all housing projects approved till end of 2019-2020.
Group of Ministers examining how prospective house buyers can benefit under GST.
Within almost two years, almost all assessment and verification of IT returns will be done electronically by an anonymized tax system without any intervention by tax officials.

- Business Taxes -

Businesses with less than Rs. 5 crore annual turnover, comprising over 90% of GST payers, will be allowed to return quarterly returns.
2 % interest subvention on loan of 1 crore for GST registered MSME units.

- GST Implications -

In January 2019, GST collections have crossed Rs. 1 lakh crore.
GST has been continuously reduced, resulting in relief of Rs. 80,000 crore to consumers; most items of daily use for poor and middle class are now in the 0%-5% tax bracket.
GST is the biggest taxation reform implemented since Independence; through tax consolidation, India became one common market; inter-state movements became faster through e-way bills, improving Ease of Doing Business.

- Tax Collection -

Direct tax collections from 6.38 lakh crore rupees in 2013-14 to almost 12 lakh crore rupees; tax base up from Rs 3.79 crore to Rs 6.85 crore.
54% returns have been accepted without any scrutiny.

- Business Scenario -

Cost of data and voice calls in India is now possibly the lowest in the world.
Mobile and mobile part manufacturing companies have increased from 2 to 268.
Single window clearance for filmmaking to be made available to Indian filmmakers.
Anti-camcording provision to be introduced to Cinematography Act to combat film privacy.
Digitization of Export and Import transaction.
India is the second largest start up hub of the world.

- North East India -

Allocation for North Eastern region proposed to be increased to Rs 58,166 crore in this year a rise of over 21% from the previous year.
Government will introduce container cargo movement to the Northeast by improving the navigation capacity of the Brahmaputra River.
The budget allocation of Rs. 580 crore for various schemes of the North Eastern Council
931 crore under Central Pool of Resources for Northeast and Sikkim
674 crore under other subsidy payable including for North Eastern Region
1,700 crore for refund of Central and Integrated GST to Industrial Units in Northeastern region and Himalayan states.
Arunachal Pradesh has come on the air map recently and Meghalaya, Tripura and Mizoram have come on India’s rail map for the first time.
Many Projects stuck for decades like the Bogibeel rail-cum-road bridge have been completed.

- Agriculture & Allied sector -

Increased allocation for Rashtriya Gokul Mission to Rs. 750 crore in current year.
Two per cent interest subvention to farmers pursuing animal husbandry and fisheries.
Under Pradhan Mantri Kisan Samman Nidhi, 6000 per year for each farmer, in three installments, to be transferred directly to farmers’ bank accounts, for farmers with less than 2 hectares land holding. This initiative is likely to benefit 12 crore small and marginal farmers, at an estimated cost of Rs 75,000 crore.
Government announced setting up of Rashtriya Kamdhenu Aayog to enhance productivity of cows.

- Mining and Core Industry sector -

Urgent action needed to increase hydrocarbon production to decrease imports; change in bidding procedure and exploration procedure being implemented.

- Banking and Financial Sector -

The 4R approach has been implemented to ensure clean banking –

Recognition
Resolution
Recapitalisation
Reform

The government spent Rs 2.6 lakh crore in the recapitalisation of the public sector banks and recovered Rs 3 lakh crore so far, through the Insolvency and Bankruptcy Code procedures. The Bank of India, Bank of Maharashtra and the Oriental Bank of Commerce are out of the PCA framework.
56 lakh loans worth Rs 7.23 lakh crore have been sanctioned under Mudra scheme.

- Technology Sector -

Mobile Date consumption has increased by 50% in the country in the last five years. More than 3 lakh service centres are employing over 12 lakh today under the Digital India push.
National Program on Artificial Intelligence is up next with centres of excellence to give the push. The aim is to empower the MSME sector.

- Infrastructure Sector -

Sagarmala Project, a strategic and customer-oriented initiative to modernize India’s Ports, will be scaled up.
On realty sector, RERA and Benami Properties Act helped bring transparency in the sector.
Promise of electricity for all households by March 2019.
Digital villages are the next big scheme with an aim of 1,00,000 lakh such villages in the next five years.
India has achieved 98 percent rural sanitation coverage.

- Railway Sector -

Planned expenditure of Rs. 1,58,658 crore.
The operating ratio, a measure of Indian Railways financial health, improved and further improvement is being eyed. The operating ratio for the current fiscal year has improved to 96.2%.
Trains sets like Train 18, now Vande Bharat Express, will offer world-class travel experience to passengers in the coming years.
Vande Bharat Express was pitched as the indigenous technology leap that will ensure speed, service and safety in rail travel.
An outlay of Rs 64,587 crore for Indian Railways.

- Defense Sector -

Defense Budget gets mega boost, which is set for Rs. 3 lakh crore.

- Social Welfare -

Pradhan Mantri Shram Yogi Mandhan, to provide assured monthly pension of 3000 rupees per month, with contribution of 100 rupees per month, for workers in unorganised sector after 60 years of age. This will benefit 10 crore workers in unorganized sector, may become the world’s biggest pension scheme for unorganized sector in five years.
500 crore to be set aside for the above scheme, which is to be implemented from this year.
Massive announcement for work sector wish increase in gratuity limit from Rs 10 lakh to Rs 30 lakh.
Rs 60,000 crore has also been set aside for
Rs 19,000 crore has been allocated for Pradhan Mantri Gram Sadak Yojana.
Allocation for National Education Scheme is 38578 crore.
76,800 crore for SC/ST/OBC welfare schemes.
Committee under NITI Aayog to be set up to identify and denotify nomadic and semi-nomadic communities; Welfare Development Board to be set up under Ministry of Social Justice and Empowerment for welfare of these hard-to-reach communities and for tailored strategic interventions.

- Women and Child Development -

Rs 29,000 crore has been set aside for the Women and Child Development (WCD) Ministry for the next fiscal, a 20 % increase over the 2018-2019 financial year with the Centre’s programmes of maternity benefit and child protection services.
The allocation for the Pradhan Mantri Matru Vandana Yojana (PMMVY), a maternity benefit programme, was more than doubled to Rs 2,500 crore from Rs 1,200 crore. The programme provides Rs 6,000 each to pregnant women and lactating mothers.
The Child Protection Services programme under the Integrated Child Development Services was increased to Rs 1,500 crore from Rs 925 crore.
The government has already provided 6 crore free LPG connection. Government aims to complete the promise of 8 crore Free LPG connections by next year.

- Growth of Indian Economy -

India is poised to become a 5 trillion dollar economy in the next five years and will become a 10 trillion dollar economy in the next eight years.
Inflation is a hidden and unfair tax; from 10.1% during 2009-14, inflation in December 2018 was just 1%.

- Fiscal Scenario -

Fiscal deficit has been bought down to 3.4%
CAD (Current Account Deficit) likely to be 5% of GDP this year.
Total expenditure target for FY20 is at 27,84,200 crore a rise of 13.3%
Capital expenditure target is at Rs 3.36 lakh crore.
In 2018-19, dividend from RBI, PSU Banks is Rs 74,100 crore. For the current financial year, target for the same has been pegged at Rs 82,900 crore.
Revenue Deficit target has been pegged at 2 percent of the GDP.
Gilt repayment is pegged at Rs 2.36 lakh crore.
Net market borrowing has been pegged at Rs 4.73 lakh crore, while the gross market borrowing for the financial year has been pegged at Rs 7.1 lakh crore.
Dividend from PSU units has been pegged at Rs 53,160 crore.
Divestment target for Financial year 2020 has been pegged at Rs 90,000 crore.

What is Interim Budget & Vote-on-account?

Interim Budget: An interim budget is akin to a full budget but made by the government during the last year of its term, before the election. It has complete set of accounts, including both expenditure and receipts, but may not have any major policy proposals.

The interim Budget will seek the Parliament’s nod for meeting the expenditure for the first six months of new fiscal 2019-20 and a full-fledged Budget will be presented in Parliament once the new Central government is formed after the general elections.
It is not mandatory to present an interim budget in an election year, but the convention is to present an interim budget and get the fund required for spending.

Vote on Account: Vote on Account is a grant in advance to enable the government to carry on until the voting of demands for grants and the passing of the Appropriation Bill and Finance Bill.

Generally, the Vote on Account is taken for two months only and thus the sum of the grant would be equivalent to one-sixth of the estimated total expenditure for the entire year.
Vote on Account deals only with the expenditure side of the government’s budget.
Vote on Account cannot alter direct taxes and is treated as a formal matter and passed by the Lok Sabha without discussion.
The provisions of Vote on Account are given in the Article 116 of the Constitution.

Purpose of Budget/vote-on-account/interim budget

Article 266 of the Constitution of India mandates that parliamentary approval is required to draw money from the Consolidated Fund of India.

Budget: Glossary of Terms

Consolidated Fund

All revenues received by the Government including tax and non-tax revenues, loans raised and repayment of loans given (including the interest thereon) form the Consolidated Fund. All expenditure and disbursements of the Government, including release of loans and repayments of loans taken (and the interest thereon), are met from this fund.

Contingency Fund

A reserve fund set aside for possible unforeseen expenditure and established under Article 267(2) of the Constitution. It is an imprest placed at the disposal of the Governor.

Public Account

All public moneys received, other than those credited to the Consolidated Fund, are accounted for under the Public Account. In respect of such receipts, Government acts as a banker or trustee. The Public Account comprises of repayable like Small Savings and Provident Funds, Reserve Fund, Deposits and Advances, Suspense and Miscellaneous transaction (adjusting entries pending booking to fi nal heads of account), Remittances between accounting entities, and Cash Balance.

Deficit

It is the gap between Revenue and Expenditure. The kind of deficit, how the deficit is financed, and application of funds are important indicators of prudence in Financial Management.

Fiscal Deficit

When the government’s non-borrowed receipts fall short of its entire expenditure, it has to borrow money form the public to meet the shortfall. The excess of total expenditure over total non-borrowed receipts is called the fiscal deficit.

Primary Deficit

The primary deficit is the fiscal deficit minus interest payments. It tells how much of the Government’s borrowings are going towards meeting expenses other than interest payments.

Revenue Deficit/ Surplus

It is the gap between Revenue Receipts and Revenue Expenditure. Revenue Expenditure is required to maintain the existing establishment of Government and ideally, should be fully met from Revenue Receipts.

Direct and Indirect Taxes

Direct taxes are the one that fall directly on individuals and corporations. Eg. Income tax, corporate tax etc. Indirect taxes are imposed on goods and services. They are paid by consumers when they buy goods and services. These include excise duty, customs duty etc.

Fiscal policy

It is the government actions with respect to aggregate levels of revenue and spending. Fiscal policy is implemented though the budget and is the primary means by which the government can influence the economy.

Capital Budget

The Capital Budget consists of capital receipts and payments. It includes investments in shares, loans and advances granted by the central Government to State Governments, Government companies, corporations and other parties

Revenue Budget

The revenue budget consists of revenue receipts of the Government and it expenditure. Revenue receipts are divided into tax and non-tax revenue.

Tax revenues constitute taxes like income tax, corporate tax, excise, customs, service and other duties that the Government levies.

Non-tax revenue sources include interest on loans, dividend on investments.

Budget Estimates Amount of money allocated in the Budget to any ministry or scheme for the coming financial year.

Guillotine

Parliament, unfortunately, has very limited time for scrutinizing the expenditure demands of all the Ministries. So, once the prescribed period for the discussion on Demands for Grants is over, the Speaker of Lok Sabha puts all the outstanding Demands for Grants, Whether discussed or not, to the vote of the House.

Download Union Budget 2019-20 Highlights PDF