UNION
BUDGET 2020-21
GOVERNMENT
OF INDIA
******
KEY
HIGHLIGHTS OF UNION BUDGET 2020-21
New
Delhi, 1st
February
2020
Presenting
the first Union Budget of the third decade of 21st century, Finance
Minister Smt. Nirmala Sitharaman, today unveiled a series of far-reaching
reforms, aimed at energizing the Indian economy through a combination of
short-term, medium-term, and long-term measures.
The
Key Highlights of Union Budget 2020-21 are as follows:
Three
prominent themes of the Budget
Aspirational India - better standards of living with access to
health, education and better jobs for all sections of the society
Economic Development for all - “Sabka Saath , Sabka Vikas , Sabka
Vishwas”.
Caring Society - both humane and compassionate; Antyodaya as an
article of faith.
Three broad themes are held together by:
o Corruption free,
policy-driven Good Governance.
o Clean and sound financial
sector.
Ease of Living underlined by the three themes of Union Budget
2020-21.
Three
components of Aspirational India
Agriculture, Irrigation, and Rural Development
Wellness, Water, and Sanitation
Education and Skills
Sixteen
Action Points for Agriculture, Irrigation and Rural Development
Rs. 2.83 lakh crore to be allocated for the following 16 Action Points:
o Rs. 1.60 lakh
crore for Agriculture, Irrigation & allied activities.
o Rs. 1.23 lakh
crore for Rural development & Panchayati Raj. -
Agriculture credit:
o Rs. 15 lakh
crore target set for the year 2020-21.
o PM-KISAN
beneficiaries to be covered under the KCC scheme.
o NABARD
Re-finance Scheme to be further expanded.
Comprehensive measures for 100 water-stressed districts proposed.
2
Blue Economy:
o Rs. 1 lakh crore
fisheries‟ exports to be achieved by 2024-25.
o 200 lakh tonnes
fish production targeted by 2022-23.
o 3477 Sagar
Mitras and 500 Fish Farmer Producer Organisations to involve youth in
fisheries extension.
o Growing of
algae, sea-weed and cage culture to be promoted.
o Framework for
development, management and conservation of marine fishery resources.
Kisan Rail to be setup by Indian Railways through PPP:
o To build a
seamless national cold supply chain for perishables (milk, meat, fish, etc.
o Express and
Freight trains to have refrigerated coaches.
Krishi Udaan to be launched by the Ministry of Civil Aviation:
o Both
international and national routes to be covered.
o North-East and
tribal districts to realize Improved value of agri-products.
One-Product One-District for better marketing and export in the
Horticulture sector.
Balanced use of all kinds of fertilizers - traditional organic and innovative
fertilizers.
Measures for organic, natural, and integrated farming:
o Jaivik Kheti Portal – online
national organic products market to be strengthened.
o Zero-Budget
Natural Farming (mentioned
in July 2019 Budget) to be included.
o Integrated
Farming Systems in
rain-fed areas to be expanded.
o Multi-tier
cropping, bee-keeping, solar pumps, solar energy production in non-cropping
season to be added.
PM-KUSUM to be expanded:
o 20 lakh farmers
to be provided for setting up stand-alone solar pumps.
o Another 15 lakh
farmers to be helped to solarise their grid-connected pump sets.
o Scheme to enable
farmers to set up solar power generation capacity on their fallow/barren lands
and to sell it to the grid.
Village Storage Scheme:
o To be run by the
SHGs to provide farmers a good holding capacity and reduce their logistics
cost.
o Women, SHGs to
regain their position as Dhaanya Lakshmi.
NABARD to map and geo-tag agri-warehouses, cold storages, reefer van
facilities, etc.
Warehousing in line with Warehouse Development and Regulatory Authority (WDRA)
norms:
o Viability Gap
Funding for setting up such efficient warehouses at the block/taluk level.
o Food Corporation
of India (FCI) and Central Warehousing Corporation (CWC) to undertake such
warehouse building.
Financing on Negotiable Warehousing Receipts (e-NWR) to be integrated with
e-NAM.
3
State governments who undertake implementation of model laws (issued by the
Central government) to be encouraged.
Livestock:
o Doubling of milk
processing capacity to 108 million MT from 53.5 million MT by 2025.
o Artificial
insemination to be increased to 70% from the present 30%.
o MNREGS to be
dovetailed to develop fodder farms.
o Foot and Mouth
Disease, Brucellosis in cattle and Peste Des Petits ruminants (PPR) in sheep
and goat to be eliminated by 2025.
Deen Dayal Antyodaya Yojana – 0.5 crore households mobilized with
58 lakh SHGs for poverty alleviation.
Wellness,
Water and Sanitation
Rs. 69,000 crore allocated for overall Healthcare sector.
Rs. 6400 crore (out of Rs. 69,000 crore) for PM Jan Arogya Yojana (PMJAY):
o More than 20,000
hospitals already empanelled under PM Jan Arogya Yojana (PMJAY).
o Viability Gap
Funding window proposed for setting up hospitals in the PPP mode.
o Aspirational
Districts with no Ayushman empanelled hospitals to be covered in the first
phase.
o Targeting
diseases with an appropriately designed preventive regime using Machine
Learning and AI.
Jan
Aushadhi Kendra Scheme to offer 2000 medicines and 300 surgicals in all
districts by 2024.
TB
Harega Desh Jeetega campaign launched - commitment to end Tuberculosis
by 2025.
Rs. 3.60 lakh crore approved for Jal Jeevan Mission:
o Rs. 11,500 crore
for the year 2020-21.
o Augmenting local
water sources, recharging existing sources, and promoting water harvesting and
de-salination.
o Cities with
million-plus population to be encouraged to achieve the objective during the
current year itself.
Rs.12, 300 crore allocation for Swachh Bharat Mission in 2020-21:
o Committment to ODF-Plus
in order to sustain ODF behaviour.
o Emphasis on liquid
and grey water management.
o Focus also on
Solid-waste collection, source segregation, and processing.
Education
and Skills
Rs. 99,300 crore for education sector and Rs. 3000 crore for skill development
in 2020-21.
4
New Education Policy to be announced soon.
National Police University and National Forensic Science
University proposed for policing science, forensic science, and
cyber-forensics.
Degree level full-fledged online education program by Top-100 institutions in
the National Institutional Ranking Framework.
Up to 1-year internship to fresh engineers to be provided by Urban Local
Bodies.
Budget proposes to attach a medical college to an existing district hospital in
PPP mode.
Special bridge courses to be designed by the Ministries of Health, and Skill
Development:
o To fulfill the
demand for teachers, nurses, para-medical staff and care-givers abroad.
o To bring in
equivalence in the skill sets of the workforce and employers‟ standards.
150 higher educational institutions to start apprenticeship embedded
degree/diploma courses by March 2021.
External Commercial Borrowings and FDI to be enabled for education sector.
Ind-SAT proposed for Asian and African countries as a part of Study in
India program.
Economic
Development
Industry,
Commerce and Investment
Rs. 27,300 crore allocated for 2020-21 for development and promotion of
Industry and Commerce.
Investment Clearance Cell proposed to be set up:
o To provide “end
to end” facilitation and support.
o To work through
a portal.
Five new smart cities proposed to be developed.
Scheme to encourage manufacture of mobile phones, electronic equipment and
semi-conductor packaging proposed.
National Technical Textiles Mission to be set up:
o With four-year
implementation period from 2020-21 to 2023-24.
o At an estimated
outlay of Rs 1480 crore.
o To position
India as a global leader in Technical Textiles.
New scheme NIRVIK to be launched to achieve higher export credit
disbursement, which provides for:
o Higher insurance
coverage
o Reduction in
premium for small exporters
o Simplified
procedure for claim settlements.
Turnover of Government e-Marketplace (GeM) proposed to be taken to Rs 3 lakh
crore.
Scheme for Revision of duties and taxes on exported products to be launched.
5
o Exporters to be
digitally refunded duties and taxes levied at the Central, State and local
levels, which are otherwise not exempted or refunded.
All Ministries to issue quality standard orders as per PM‟s vision of “Zero
Defect-Zero Effect” manufacturing.
Infrastructure
Rs.100 lakh crore to be invested on infrastructure over the next 5 years.
National Infrastructure Pipeline:
o Rs. 103 lakh
crore worth projects; launched on 31st December 2019.
o More than 6500
projects across sectors, to be classified as per their size and stage of
development.
A National Logistics Policy to be released soon:
o To clarify roles
of the Union Government, State Governments and key regulators.
o A single window
e-logistics market to be created
6
o Focus to be on
generation of employment, skills and making MSMEs competitive.
National Skill Development Agency to give special thrust to
infrastructure-focused skill development opportunities.
Project preparation facility for infrastructure projects proposed.
o To actively
involve young engineers, management graduates and economists from Universities.
Infrastructure agencies of the government to involve youth-power in start-ups.
Rs.1.7 lakh crore proposed for transport infrastructure in 2020-21.
Highways:
Accelerated development of highways to be undertaken, including:
o 2500 Km access
control highways.
o 9000 Km of
economic corridors.
o 2000 Km of
coastal and land port roads.
o 2000 Km of
strategic highways.
Delhi-Mumbai Expressway and two other packages to be completed by 2023.
Chennai-Bengaluru Expressway to be started.
Proposed to monetise at least 12 lots of highway bundles of over 6000 Km before
2024.
7
Indian Railways:
Five measures:
o Large solar
power capacity to be set up alongside rail tracks, on land owned by railways.
o Four station
re-development projects and operation of 150 passenger trains through PPP.
o More Tejas type
trains to connect iconic tourist destinations.
o High speed train
between Mumbai and Ahmedabad to be actively pursued.
o 148 km long
Bengaluru Suburban transport project at a cost of Rs 18600 crore, to have fares
on metro model. Central Government to provide 20% of equity and facilitate
external assistance up to 60% of the project cost.
Indian Railways‟ achievements:
o 550 Wi-fi
facilities commissioned in as many stations.
o Zero unmanned
crossings.
o 27000 Km of
tracks to be electrified.
Ports
& Water-ways:
Corporatizing at least one major port and its listing on stock exchanges to be
considered.
Governance framework keeping with global benchmarks needed for more efficient
sea-ports.
Economic activity along river banks to be energised as per Prime Minister‟s Arth
Ganga concept.
Airports:
100 more airports to be developed by 2024 to support Udaan scheme.
Air fleet number expected to go up from present 600 to 1200 during this time.
Electricity:
“Smart” metering to be promoted.
More measures to reform DISCOMs to be taken.
Power:
Rs.22, 000 crore proposed for power and renewable energy sector in 2020-21.
Expansion of national gas grid from the present 16200 km to 27000 km proposed.
Further reforms to facilitate transparent price discovery and ease of
transactions.
New
Economy
To take advantage of new technologies:
o Policy to enable
private sector to build Data Centre parks throughout the country to be brought
out soon.
8
o Fibre to the
Home (FTTH) connections through Bharatnet to link 100,000 gram panchayats this
year.
o Rs.6000 crore
proposed for Bharatnet programme in 2020-21.
Measures proposed to benefit Start-ups:
o A digital
platform to be promoted to facilitate seamless application and capture of IPRs.
o Knowledge
Translation Clusters to be set up across different technology sectors including
new and emerging areas.
o For designing,
fabrication and validation of proof of concept, and further scaling up
Technology Clusters, harbouring test beds and small scale manufacturing
facilities to be established.
o Mapping of India‟s
genetic landscape- Two new national level Science Schemes to be initiated to
create a comprehensive database.
o Early life
funding proposed, including a seed fund to support ideation and development of
early stage Start-ups.
Rs.8000 crore proposed over five years for National Mission on Quantum
Technologies and Applications.
Caring
Society
Focus on:
o Women &
child,
o Social Welfare;
o Culture and
Tourism
Allocation of Rs. 35,600 crore for nutrition-related programmes proposed for
the FY2020-21.
Rs.28, 600 crore proposed for women specific programs.
Issue about age of a girl entering motherhood - proposed to appoint a task
force to present its recommendations in six months‟ time.
Financial support for wider acceptance of technologies, identified by Ministry
of Housing and Urban Affairs to ensure no manual cleaning of sewer systems or
septic tanks, to be provided.
Rs. 85, 000 crore proposed for 2020-21 for welfare of Scheduled Castes and
Other Backward Classes.
Rs. 53, 700 crore provided to further development and welfare of Scheduled
Tribes.
Enhanced allocation of Rs. 9,500 crore provided for 2020-21 for senior citizens
and Divyang.
Culture
& Tourism
Allocation of Rs. 2500 crore for 2020-21 for tourism promotion.
Rs.3150 crore proposed for Ministry of Culture for 2020-21.
An Indian Institute of Heritage and Conservation under Ministry of Culture
proposed; with the status of a deemed University.
9
5 archaeological sites to be developed as iconic sites with on-site Museums:
o Rakhigarhi
(Haryana)
o Hastinapur
(Uttar Pradesh)
o Shivsagar
(Assam)
o Dholavira
(Gujarat)
o Adichanallur
(Tamil Nadu)
Re-curation of the Indian Museum in Kolkata, announced by Prime Minister in
January 2020.
Museum on Numismatics and Trade to be located in the historic Old Mint building
in Kolkata.
4 more museums from across the country to be taken up for renovation and
re-curation.
Support for setting up of a Tribal Museum in Ranchi (Jharkhand).
Maritime museum to be set up at Lothal- the Harrapan age maritime site near
Ahmedabad, by Ministry of Shipping.
State governments expected to develop a roadmap for certain identified
destinations and formulate financial plans during 2021 against which specified
grants to be made available to the States in 2020-21.
Environment
& Climate Change
Allocation for this purpose to be Rs.4400 crore for 2020-21.
Proposed to advise the utilities to close the running old thermal power plants
with carbon emission above the pre-set norms.
States that are formulating and implementing plans for ensuring cleaner air in
cities above one million to be encouraged.
PM launched Coalition for Disaster Resilient Infrastructure (CDRI) with
Secretariat in Delhi. Second such international initiative after International
Solar Alliance.
Governance
Clean, corruption-free, policy driven, good in intent and most importantly
trusting in faith.
Taxpayer Charter to be enshrined in the Statute will bring
fairness and efficiency in tax administration.
Companies Act to be amended to build into statues, criminal liability for
certain acts that are civil in nature.
o Other laws with
such provisions are to be corrected after examination.
Major reforms in recruitment to Non-Gazetted posts in Government and Public
sector banks:
o An independent, professional and specialist National
Recruitment Agency (NRA) for conducting a computer-based online Common
Eligibility Test for recruitment.
o A test-centre in
every district, particularly in the Aspirational Districts.
10
A robust mechanism to be evolved for
appointment including direct recruitment to various Tribunals and specialised
bodies to attract best talents and professional experts.
Contract Act to be strengthened.
New National Policy on Official Statistics to:
o Promote use of
latest technologies including AI.
o Lay down a
road-map towards modernised data collection, integrated information portal and
timely dissemination of information.
A sum of Rs. 100 crore allocated to
begin the preparations for G20 presidency to be hosted in India in the year
2022.
Development of North East region:
o Improved flow of funds using online portal by the
Government.
o Greater access
to financial assistance of Multilateral and Bilateral funding agencies.
Development of Union Territories of J&K and Ladakh:
o An amount of Rs. 30,757 crore provided for the
financial year 2020-21.
o The Union
Territory of Ladakh has been provided with Rs. 5,958.
Financial
Sector
Reforms accomplished in PSBs :
o 10 banks
consolidated into 4.
o Rs. 3,50,000
crore capital infused.
Governance reforms to be carried out to bring in transparency and greater
professionalism in PSBs.
Few PSBs to be encouraged to approach the capital market to raise additional
capital
Deposit Insurance and Credit Guarantee Corporation (DICGC) permitted to
increase Deposit Insurance Coverage to Rs. 5 lakh from Rs.1 lakh per depositor.
Scheduled Commercial Bank‟s health under monitoring through a robust mechanism,
keeping depositors‟ money safe.
Cooperative Banks to be strengthen by amending Banking Regulation Act for:
o Increasing professionalism.
o Enabling access to capital.
o Improving
governance and oversight for sound banking through the RBI.
NBFCs eligibility limit for debt recovery reduced from:
o Rs. 500 crore to Rs 100 crore asset size.
o Rs 1 crore to Rs
50 lakh loan size.
Private capital in Banking system:
o Government to
sell its balance holding in IDBI Bank to private, retail and institutional
investors through the stock exchange.
Easier mobility in jobs:
11
o Auto-enrolment in Universal Pension coverage.
o Inter-operability
mechanism to safeguard the accumulated corpus.
Pension Fund Regulatory Development Authority of India Act to be amended to:
o Strengthen regulating role of PFRDAI.
o Facilitate separation of NPS trust for government
employees from PFRDAI.
o Enable
establishment of a Pension Trust by the employees other than Government.
Factor Regulation Act 2011 to be amended to:
o Enable NBFCs to
extend invoice financing to the MSMEs through TReDS
New scheme to provide subordinate debt for entrepreneurs of MSMEs by the banks
o Would be counted as quasi-equity.
o Would be fully guaranteed through the Credit
Guarantee Trust for Medium and Small Entrepreneurs (CGTMSE).
o The corpus of
the CGTMSE would accordingly be augmented by the government.
Window for MSME‟s debt restructuring by RBI to be extended by one year till
March 31, 2021.
o More than five
lakh MSMEs have already been benefitted.
An app-based invoice financing loans product for MSMEs to be launched.
o To prevent the
problem of delayed payments and consequential cash flows mismatches.
Export promotion of MSMEs:
o For selected
sector such as pharmaceuticals, auto components and others.
o An Rs 1000 crore
scheme anchored by EXIM Bank together with SIDBI.
o Hand holding
support for technology upgradations, R&D, business strategy etc.
Financial
Market
Deepening Bond Market.
o Certain
specified categories of Government securities to be opened fully for non
-resident investors also.
o FPI limit in
corporate bonds increased to 15% from 9% of its outstanding stock.
New legislation to be formulated for laying down a mechanism for netting of
financial contracts.
o Scope of credit
default swaps to expand.
Debt Based Exchange Traded Fund expanded by a new Debt-ETF consisting primarily
of Government Securities.
o To give
attractive access to retail investors, pension funds and long-term investors.
A
Partial Credit Guarantee scheme for the NBFCs formulated post the Union budget
2019-20 to address their liquidity constraints.
o New mechanism to
be devised to further this.
12
o Government
support to securities so floated.
Infrastructure
Financing
Rs.103 lakh crore National Infrastructure Pipeline projects earlier announced.
Rs 22,000 crore to cater to the equity support to Infrastructure Finance
Companies such as IIFCL and a subsidiary of NIIF.
IFSC, GIFT city: full of potential to become a centre of international finance
as well as a centre for high end data processing:
o An International
Bullion exchange(s) to be set up as an additional option for trade by global
market participants with the approval of regulator.
Disinvestment
Government
to sell a part of its holding in LIC by way of Initial Public Offer (IPO).
Fiscal
Management
XV Finance Commission (FC):
o XV Finance
Commission has given its first report for FY2020-21
o Recommendations
accepted in substantial measure
o Its final report
for five years beginning 2021-22 to be submitted during the latter part of the
year.
GST Compensation Fund:
o Balances due out
of collection of the years 2016-17 and 2017-18 to be transferred to the Fund,
in two instalments.
o Hereinafter, transfers
to the fund to be limited only to collection by way of GST compensation cess.
Overhaul of Centrally Sponsored Schemes and Central Sector Schemes necessary:
o To align them
with emerging social and economic needs of tomorrow
o To ensure that scarce
public resources are spent optimally
On the recent debate over transparency and credibility of projected fiscal
numbers, it is assured that procedure adopted is compliant with the FRBM Act.
For the FY 2019-20:
o Revised
Estimates of Expenditure: at Rs.26.99 lakh crore
o Revised
Estimates of Receipts: estimated at Rs.19.32 lakh crore.
For year 2020-21:
o Nominal growth
of GDP estimated at 10%.
o Receipts:
estimated at Rs.22.46 lakh cr
o Expenditure: at
Rs.30.42 lakh cr.
Significant tax reforms for boosting investments recently undertaken. However,
expected tax buoyancy expected to take time.
Fiscal deficit of 3.8% estimated in RE 2019-20 and 3.5% for BE 2020-21.
It comprises two ingredients;
13
o 3.3% for year
2019-20 and 3% for the 2020-21 budget estimate.
o Deviation of
0.5%, consistent with Section 4(3) of FRBM Act, both for RE 2019-20 and BE
2020-21. (Section 4 (2) of the FRBM Act provides for a trigger mechanism for a
deviation from the estimated fiscal deficit on account of structural reforms in
the economy with unanticipated fiscal implications.)
o Return path,
committing to fiscal consolidation without compromising needs of investment out
of public funds, is laid in Medium Term Fiscal Policy cum Strategy Statement.
o Market
borrowings: Net market borrowings: Rs.4.99 lakh crore for 2019-20 and Rs.5.36
lakh crore for 2020-21.
A good part of the borrowings for the financial year 2020-21 to go towards
Capital expenditure that has been scaled up by more than 21%.
14
