On 5 July, new finance minister, Nirmala Sitharaman presented the financial budget in Parliament.
Traditionally, the finance minister carries the annual budget in an old-fashioned briefcase, but Nirmala Sitharaman, who became the first woman to hold the post and break that tradition, last Friday, carried her budget in a folded red cloth cover.
Nirmala kept the total borrowing plan unchanged at 7.1 trillion rupees and the budget doesn’t show any major proposals which boosts spending. The total expenditure for the fiscal year is estimated to be 33.2 trillion rupees.
The Budget doesn’t favour the super-rich taxpayers. The proposal is to raise the surcharge from 15 percent to 25 percent for income between two crore and five crore rupees. For an income above five crore rupees, it will be 37 per cent. It focuses on greater tax compliance. Tax filers are allowed to quote either PAN or Aadhaar number while filing tax returns. If one deposits one crore rupees or more in a current bank account, spends more than two lakh rupees on foreign travel or has an electricity bill amounted to above one lakh rupees annually, it is mandatory for them to fill tax.
If a person has an income of up to five lakh rupees, he or she remains tax free. But for those earning between five lakh to two crore rupees, the same tax as last year is availed. The budget has also proposed to bring Central Public Sector Enterprises (CPSE) ETFs in order to facilitate disinvestment of state-owned enterprises, this will be under the equity linked saving schemes (ELSS). It will make investments to be eligible for tax deduction within one and a half lakh rupees.
Apart from these, the budget has offered an additional one and a half lakh rupees deduction on the interest for home loans, where the house cost should be up to 45 lakhs. While, on buying electric vehicles also, a new deduction in interest has been introduced.
Railways has been given a budgetary allocation of Rs 65,837 crore and the government will focus on public- private partnership (PPP) mode for faster development. This sector has received the highest outlay for capital expenditure amounting to Rs 1.60 lakh crore.
This budget has addressed about India’s troubled non-banking financial companies. Public-sector banks will be recapitalized and small businesses can borrow at cheaper rates where they get their money faster.
Issues of water, energy, and environment (e-vehicles) were put in front. Investment, raising labour productivity, rationalising the R&D infrastructure, attracting FDI, Make in India, making business easier and advancement of next-generation technology were the themes. There is an ambition to make India a hub for a number of new products, especially electric cars and five trillion dollars in the economy is the goal.