Finance Minister Nirmala Sitharaman presented the Union Budget 2019-20 in the Parliament on July 05, 2019. This was the maiden Budget speech of the Finance Minister Nirmala Sitharaman. Finance Minister Nirmala Sitharaman became only the second woman in the history of independent India to present the Union Budget.
About budget:
• A government budget is an annual financial statement which outlines the estimated government expenditure and expected government receipts or revenues for the forthcoming fiscal year.
• Union Budget is defined under the Article 112 of the Indian Constitution. It is also referred to as the annual financial statement (AFS).
Note:
• Former Prime Minister Indira Gandhi was the first and only woman till now to have presented the Union Budget. In 1970, she presented the Union Budget of India for 1970-71, after she took over the finance portfolio following the resignation of Morarji Desai as finance minister.
Key highlights – Following are the highlights of ‘Mrs Sitharaman’ Budget
speech:
• The principles — reform, perform and transform — can work, says the Finance Minister.
• The people of India have validated their two goals for our country’s future: national security and economic growth
. • It took us over 55 years to reach $1 trillion-dollar economy, but we added $1 trillion in just 5 years.
• Now India is the sixth-largest economy in the world, up from 11th position five years ago.
Finance Minister flagged ten points of the Government’s ‘Vision for the Decade’:
• Building physical and social infrastructure;
• Digital India reaching every sector of the economy;
• Pollution-free India with green Mother Earth and Blue Skies;
• Make in India with particular emphasis on MSMEs, Start-ups, Defence manufacturing, automobiles, electronics, fabs and batteries, and medical devices;
• Water, water management, clean Rivers;
• Blue Economy;
• Space programmes. Gaganyan, Chandrayan and Satellite programmes;
• Self-sufficiency and export of food-grains, pulses, oilseeds, fruits and vegetables;
• Healthy society – Ayushman Bharat, well-nourished women & children. Safety of citizens;
• Team India with Jan Bhagidari. Minimum Government Maximum Governance.
Economy & Finance
- The FY20 fiscal deficit target has been cut to 3.3% from 3.4%.
- The Indian economy will grow to become a 3 trillion-dollar economy this year itself.
- Vision for the decade: From 1.85 trillion dollars in 2014, the economy has reached 2.7 trillion US dollars in five years. The government’s commitment is to make India a $5 trillion economy by 2024.
- 100% FDI will be permitted for insurance intermediary.
- Social Stock Exchange under SEBI proposed.
- Credit Guarantee Enhancement Corporation will be set up in 2019-20, action plan to deepen markets for long-term bonds with a specific focus on infra sector to be put in place.
- SEBI to consider raising the current threshold of 25% to 35% – Minimum public shareholding in listed companies can be increased from 25% to 35%.
- Limit on foreign portfolio investment (FPI) in a company increased to 24%.
- India saw a 6% y-o-y growth in foreign investment – Global FDIs fell to $1.3 billion from $1.5 trillion, but inflows in India remained strong at $54.37 billion, a growth of 6%.
- Proposed to merge NRI portfolio scheme route with foreign portfolio investment route.
- • NRI investments in Indian capital market is less when compared. To provide seamless, NRI portfolio scheme route to merged with foreign portfolio investment route.
- Electronic Fundraising Platform, a social stock exchange, to be set up to list social enterprises and voluntary organizations working for social welfare objectives.
- . Investment by foreign institutional investors (FIIs) and foreign direct investments (FDI) in debt securities in infrastructure debt funds to be allowed.
- Government is also considering to increase FDI in aviation and media.
Banking & Finance
1. RBI to regulate Housing Sector – Govt proposes to return the regulation authority over housing finance sector from National Housing Board to the RBI.
• RBI is also the regulator of NBFCs.
2.PSU Bank recapitalisation – The government has proposed to allocate Rs 70,000 crore for PSU Bank recapitalisation.
3.Non-performing Assets (NPAs) of commercial banks have reduced by over Rs 1 lakh crore over the last year.
4.Reducing the no. of PSBs to 8 – The government has smoothly carried out consolidation, reducing the number of PSBs (Public sector banks) by 8.
6.6 public sector banks out of Prompt Corrective Action (PCA).
7.Record recovery of over Rs 4 lakh crore due to IBC (Insolvency code) have been effected in the last four years.
8.Provision coverage ratio is at its highest in 7 years and credit growth has improved to over 13%.
9.For purchase of high-rated pooled assets of financially sound NBFCs amounting to a total of Rs 1 lakh crore, govt will provide a one-time six-month partial credit guarantee to PSBs for first loss up to 10%.
10.India’s sovereign external debt to GDP is among the lowest globally at less than 5%.
11. New coin series to be launched soon – A new series of coins for Re 1, Rs 2 Rs 5, Rs 10, Rs 20 to be minted so that the visually impaired can easily identify them.
12.Pension Fund Regulatory Authority to be separated from the National Pension Scheme Trust.
13. Divestment target – The FY20 divestment target has been hiked to Rs 1.05 trillion (1.05 lakh crore) from Rs 90,000 crore.
14. Govt to continue with strategic divestment of select Central Public Sector Enterprises (CPSEs).
15. Govt to modify present policy of retaining 51% stake in PSUs.
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