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Image Credits: Union Budget 2024
The Union Budget is one of the most highly anticipated events in India, with everyone eagerly waiting to hear about the government's plans and policies for the year. This year's budget, which was presented by Finance Minister Nirmala Sitharaman, has been particularly significant as it is the first budget of the new decade and also the first full-fledged budget of the second term of the Narendra Modi-led government. However, it is often seen that the budget documents and terminologies tend to go over the heads of the common people. To help demystify the Union Budget 2020, here are a few key points and facts that everyone should know.
Overview of the Budget
The Union Budget is a financial statement of the government's estimated revenue and expenditure for the upcoming financial year. It is the government's roadmap for the country's economic growth and development. The budget is divided into two parts - revenue budget and capital budget. The revenue budget consists of the government's revenue receipts and expenditures, while the capital budget deals with the government's capital receipts and expenditures.
Revenue Expenditure
The total revenue expenditure proposed in the budget for the financial year 2020-2021 is estimated to be around Rs.24.4 lakh crores. This includes expenses on social and economic services, subsidies, interest payments, and salary and pension payments for government employees. The education sector has been allocated Rs.99,300 crores, while the health sector has been allocated Rs.69,000 crores.
Capital Expenditure
The budget estimates a total capital expenditure of Rs.4.12 lakh crores for the upcoming financial year. This includes investments in infrastructure, such as roads, railways, airports, and ports, as well as investments in various government schemes and programs.
Fiscal Deficit
One of the major concerns of the budget is the fiscal deficit, which is the difference between the government's total revenue and total expenditure. The government has targeted a fiscal deficit of 3.5% of the GDP for the financial year 2020-2021. This is lower than the previous year's estimate of 3.8%. This deficit is expected to be financed by market borrowings, external borrowings, and by drawing from the government's cash balances.
Income Tax Slab Change
The budget has proposed a new optional income tax regime that offers significant tax relief to individuals. This new regime has lower tax rates, but the individual will not be able to claim various deductions and exemptions. The new tax regime is meant to simplify the tax structure and provide more disposable income for taxpayers.
Divestment Plans
The government has set a target of raising Rs.2.1 lakh crores through divestment in the financial year 2020-2021. This includes the strategic sale of Air India, the listing of Life Insurance Corporation (LIC), and Initial Public Offerings (IPOs) of various public sector companies. The government also plans to merge multiple public sector enterprises to create more significant entities and improve their efficiency.
Schemes for the Rural Sector
The budget has allocated a significant amount for the development of the rural sector. The government has proposed to provide Rs.2.83 lakh crores for agriculture and rural development, Rs.5,000 crores for the Micro, Small, and Medium Enterprises (MSMEs) sector, and Rs.2.83 lakh crores for rural development and Panchayati Raj. Additionally, the government has also announced a new scheme called KISAN (Income Support Scheme for Farmers) which will provide farmers with an additional Rs.6,000 per year.
Women and Child Development
The budget has allocated Rs.28,600 crores for women-specific programs and Rs.85,000 crores for Scheduled Caste and Scheduled Tribes development. The Finance Minister has also announced a new scheme called 'Beti Bachao, Beti Padhao' which will focus on the education and empowerment of girls.
Infrastructure Development
The government has proposed investments of Rs.100 lakh crores in infrastructure over the next five years. The focus will be on developing highways, railways, and ports to improve connectivity and boost economic growth. The budget also allocates funds for the development of renewable energy and the installation of solar-powered water pumps for farmers.
The Union Budget 2020 focuses on boosting economic growth, promoting investments, and strengthening the rural sector. The overall budget seems to be in line with the government's vision of making India a $5 trillion economy by 2024. However, it is essential to keep in mind that these are just proposals, and their implementation will depend on various factors. As citizens, we need to understand and analyze the budget to make informed decisions and contribute to the nation's development. Let us hope that this budget will lead to a prosperous and inclusive India for all.