NEW DELHI, July 5: India on Friday unveiled a budget aimed at boosting infrastructure and foreign investment, the first since the Bharatiya Janata Party led by Prime Minister Narendra Modi returned for a second term in power.
Here are the highlights of Finance Minister Nirmala Sitharaman’s budget for the 2019/20 fiscal year that began April 1:
DEFICIT
* Fiscal deficit for 2019/2020 seen at 3.3% of GDP
BORROWING
* Government to borrow a gross 7.1 trillion rupees via bonds in 2019/20
* Government to borrow a net 4.73 trillion rupees via bonds in 2019/20
* Short term borrowing seen at 250 billion rupees in 2019/20
* Government to buy back 500 billion rupees of bonds in 2019/20
REVENUES/RECEIPTS
* Dividends from state-owned firms seen at 574.87 billion rupees in 2019/20
* Gross tax revenue seen at 24.6 trillion rupees in 2019/20
Highlights: India unveils budget aimed at boosting pandemic-hit...
* Net tax revenues seen at 16.49 trillion rupees in 2019/20
TAXATION
* Will levy tax deduction at source of 2% for cash withdrawals exceeding 10 mln rupees per year
* Proposes relief in securities transaction tax
* All companies with annual turnover of 4 bln rupees will now be under the 25% tax bracket
* Customs duty on steel raised to 7.5% from 5%
* To increase customs duty on gold and precious metals to 12.5%
EXPENDITURE
* Total government spending seen at 27.86 trillion rupees in 2019/20
* Government to spend 1.74 trillion rupees on pensions in 2019/20
* Government to spend 6.6 trillion rupees on interest payments in 2019/20
ECONOMY
* India will become a $3trn economy in the current fiscal year, and a $5trn economy in the next few years
* India to invest heavily in infrastructure and job creation
* Government will raise part of its gross borrowing in external markets in foreign currencies
INVESTMENT
* India will ease foreign direct investment restrictions in single-brand retail
* Proposes further opening up of FDI in aviation, insurance, media and animation sectors
* Important to get retail investors to invest in treasury bills
* Will allow foreign investors to buy debt of listed real estate investment trusts
* Government aiming for $14.5 billion target for disinvestment proceeds in FY20
BANKING
* State-owned banks proposed to be provided 700 billion rupees of additional capital
* Will strengthen central bank’s authority over shadow banks
* There is a need to give tax parity to non-banking finance companies
INFRASTRUCTURE
* The government will upgrade 125,000 kilometres of roads over the next five years at a cost of $11.6 bln
* Railway infrastructure will need an investment of $72bln between 2018 and 2030
* Govt to encourage global companies to set up large manufacturing plants
* India will enter into aircraft financing and leasing activities
