Budget 2020-2021: Minister of Finance
Budget 2020-2021: Minister of Finance
Budget 2020-2021: Minister of Finance
Speech of
Nirmala Sitharaman
Minister of Finance
February1, 2020
Hon’ble Speaker,
I rise to present the Budget for the year 2020-2021.
Introduction
3. For today’s youth born at the turn of the century, for every member
of Scheduled Castes and Scheduled Tribes who seeks a better life, for every
woman wishing to stand up and get counted, for every individual from the
minority sections of our society – this Budget aims to have your aspirations
and hopes addressed.
7. Of the structural reforms, the Goods and Services Tax (GST) has
been the most historic in our country. Its chief architect is not with us
today. I pay homage to the visionary leader late Shri Arun Jaitley ji. At the
time of roll out of GST, he had said and I quote:
“It will be an India where the Centre and States will work harmoniously
towards the common goal of shared prosperity. The unanimity of the
Constitutional amendment and the consensus of the GST Council highlights
that India can rise above narrow politics for the nation’s interest. With the
GST, neither the state nor the Centre loses its sovereignty. In contrast, they
will pool their sovereignty on decisions on indirect taxes.”
8. True to this vision for the historic structural reform, the Goods and
Services Tax has been gradually maturing into a tax that has integrated the
country economically. It has consolidated numerous taxes and cesses to one
tax and facilitated formalization of economy. It has resulted in the efficiency
gains in logistic and transport sectors. The turnaround time for trucks has
witnessed a substantial reduction to the tune of 20% due to abolition of
check posts in GST. The dreaded Inspector-Raj has also vanished.
10. During this phase of maturing, GST did face certain challenges. This
was natural as transition was daunting. GST Council has been proactive in
resolving issues during transition. In the last two years we have added
more than 60 lakh new taxpayers, a total of about 40 crore returns were
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filed, 800 crore invoices were uploaded, and 105 crore e-way bills were
generated. There has been extensive engagement with stakeholders. A
simplified new return system is being introduced from April 1, 2020.
11. A former Prime Minister had once voiced a concern that the fruits of
the welfare schemes were not reaching the intended citizens – the common
and deserving citizen was only receiving 15 paisa of every rupee sent for
him. Guided by “SabkaSaath, SabkaVikas, SabkaVishwas”, our government
and our Prime Minister added manifold speed and scaled up the
implementation of schemes and programmes that directly benefitted the
poor and the disadvantaged. I wish to list out only a few as examples: (a)
welfare schemes with Direct Benefit Transfer (DBT) embedded in them; (b)
sanitation and water as provision of basic needs and as a measure of
preventive healthcare; (c) healthcare, through Ayushman Bharat; (d) clean
energy through Ujjwala and solar power; (e) financial inclusion, credit
support, insurance protection to vulnerable sections and pension scheme;
(f) digital penetration with broadband and UPI;(g) Affordable Housing for all
through PMAY.
13. We are now the fifth largest economy of the world. India’s foreign
direct investment got elevated to the level of US$ 284billion during 2014-19
from US$ 190billioin that came in during the years 2009-14. The Central
Government debt that has been the bane of our economy got reduced, in
March 2019, to 48.7% of GDP from a level of 52.2%in March 2014.
14. With this backdrop, our government shall work towards taking the
country forward so that we can leapfrog to the next level of health,
prosperity and well-being. We shall strive to bring Ease of living for every
citizen.
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AND
18. The digital revolution which has placed India in a unique leadership
position globally will see the next wave. We shall aim:
20. The three themes described earlier form the basis of my subsequent
presentation. They are the flowers of the bouquet that underline the overall
concept of “Ease of Living” and need to uplift Governance, as pronounced
by our Prime Minister Shri Narendra Modi. The chapter on Finances and
subsequent Part B on Taxes provide the necessary underpinning to the
Budget that lays the guide map for next year and beyond.
SaunWatanGulzarShalamaarHyur
Dal ManzPholvunPamposhHyuv
Navjavan-an-hund, VushunKhumaarHyuv
MyonWatan, ChyonWatan
SaunWatan, NundbonyWatan
(Everything that we do, all of us do, is for this beautiful country)
Poem by Pandit Dinanath Koul
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Aspirational India
21. I shall cover programmes and plans related to: (1) Agriculture
Irrigation and Rural development (2) Wellness, Water and Sanitation and (3)
Education and Skills
23(2). Water stress related issues are now a serious concern across the
country. Our government is proposing comprehensive measures for one
hundred water stressed districts.
23(3). In the Budget speech of July 2019, I had stated that “annadata” can
be “urjadata” too. The PM-KUSUM scheme removed farmers’ dependence
on diesel and kerosene and linked pump sets to solar energy. Now, I
propose to expand the scheme to provide 20 lakh farmers for setting up
stand-alone solar pumps; further we shall also help another 15 lakh farmers
solarise their grid-connected pump sets. In addition, a scheme to enable
farmers to set up solar power generation capacity on their fallow/barren
lands and to sell it to the grid would be operationalized.
ஆத்திச்சூடி –82
BhumitiruthiUnn
- Wise, Old Tamil Woman Saint poet Aauvaiyar – Sangam Era
"Aaathichoodi" verse 81
The meaning of this saying is that one must “first tend to till one's
land and then eat”. One must eat only after work.
24. Now, for the fund allocation for the 16 different steps mentioned
above, they are being stated under two different categories:
Under Aspirational India, I shall now speak about Wellness, Water and
Sanitation.
26. Presently, under PM Jan Arogya Yojana (PMJAY) ,there are more
than 20,000 empanelled hospitals. We need more in Tier-2 and Tier-3 cities
for poorer people under this scheme.
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26 (2). Using machine learning and AI, in the Ayushman Bharat scheme,
health authorities and the medical fraternity can target disease with an
appropriately designed Preventive regime.
27. “TB Harega Desh Jeetega” campaign has been launched. I propose to
strengthen these efforts realise our commitment to end Tuberculosis by
2025.
I have provided for the health sector about `69,000 crores that is
inclusive of ` 6400 crores for Prime Minister Jan Arogya Yojana (PMJAY)
The third and the final item under Aspirational India is Education
and Skills.
32. It is felt that our education system needs greater inflow of finance to
attract talented teachers, innovate and build better labs. Therefore steps
would be taken to enable sourcing External Commercial Borrowings and FDI
so as to able to deliver higher quality education.
39. There exists a huge demand for teachers, nurses, para-medical staff
and care-givers abroad. However, their skill sets, many a time, do not
match the employer’s standards and therefore need to be improved. I
propose that special bridge courses be designed by the Ministries of Health,
Skill Development together with professional bodies to bring in equivalence.
Language requirements of various countries need also to be included. All
these should be achieved through special training packages.
Economic Development
40. Entrepreneurship has always been the strength of India. Even today,
young men and women have given up greener pastures elsewhere to
contribute to India’s growth. They are risk-taking and come up with
disruptive solutions to festering challenges. Equally, established old
industries are resetting themselves in a changing global and domestic
situation. We recognise the knowledge, skills and risk-takingcapabilities of
our youth. He is no longer the job seeker. He is creator of jobs. Now we
wish to create more opportunities and remove road-blocks from his path.
44. From the Red Fort, our Prime Minister spoke about quality and
standards when he spoke of “Zero Defect-Zero Effect” manufacturing. In
September last year, I had called for a time-bound adoption by industry of
all necessary, mandatory technical standards and their effective
enforcement. All Ministries, during the course of this year, would be issuing
quality standard orders.
47. It is the vision of the Prime Minister that each District should
develop as an export hub. Efforts of the Centre and State governments are
being synergised and institutional mechanisms are being created.
Infrastructure
49. Hon’ble Speaker, Sir, in his Independence Day speech 2019, Prime
Minister had highlighted that ` 100 lakh crore would be invested on
infrastructure over the next 5 years. As a follow up measure, I had launched
the National Infrastructure Pipeline on 31st December 2019 of ` 103 lakh
crore. It consists of more than 6500 projects across sectors and are
classified as per their size and stage of development.
These new projects will include housing, safe drinking water, access
to clean and affordable energy, healthcare for all, world-class educational
institutes, modern railway stations, airports, bus terminals, metro and
railway transportation, logistics and warehousing, irrigation projects, etc.
The National Infrastructure Pipeline envisions improving the ease of living
for each individual citizen in the country. It’s also will bring in generic and
sectoral reforms in development, operation and maintenance of these
infrastructure projects.
51. A National Logistics Policy will be released soon. Inter alia; it will
clarify the roles of the Union Government, State Governments and key
regulators. It will create a single window e-logistics market and focus on
generation of employment, skills and making MSMEs competitive.
54. In carrying out its duty, the Indian Railways performs a service to the
nation.
This will call for optimisation of costs. Railways has small operating
surplus. About Indian Railways, there are five measures, among others, that
I wish to highlight:
56. Inland Waterways received a boost in the last five years. The Jal
Vikas Marg on National Waterway-1 will be completed. Further, the 890 Km
Dhubri-Sadiya connectivity will be done by 2022.
57. Air traffic has been growing rapidly in the country as compared to
global average. One hundred more airports would be developed by 2024 to
support Udaan scheme. It is expected that the air fleet number shall go up
from the present 600 to 1200 during this time.
59. In the upstream sector of oil and gas, the Open Acreage Licensing
Policy (OALP) is a success having awarded 1,37,000 sq km for exploration to
private sector and to the CPSEs. City gas distribution rights are also
awarded.
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60 (1). Further, it is proposed to expand the national gas grid from the
present 16200 km to 27000 km, and
New Economy
62. It is now a cliché – “data is the new oil” and it is true that Analytics,
Fintech and Internet of Things (IOT) are changing the way we deal with our
lives. To take advantage of this, I propose:
62 (1). To bring out soon a policy to enable private sector to build Data
Centre parks throughout the country. It will enable our firms to skilfully
incorporate data in every step of their value chains.
62 (2). Our vision is that all “public institutions” at Gram Panchayat level
such as Anganwadis, health and wellness centres, government schools, PDS
outlets, post offices and police stations will be provided with digital
connectivity. So, Fibre to the Home (FTTH) connections through Bharatnet
will link 100,000 gram panchayats this year.
Caring Society
65. I am pleased to inform the House that “Beti Bachao Beti Padhao”
has yielded tremendous results. Gross enrolment ratio of girls across all
levels of education is now higher than boys. At elementary level, it is 94.32
% as against 89.28% for boys. At Secondary level, it is 81.32 % as compared
to 78 %, At higher secondary level girls have achieved a level of 59.70 % as
compared to 57.54 % for boys.
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66. Health of mother and child are closely corelated. Nutrition is the
critical component of health. To improve the nutritional status of children
(0-6 years), adolescent girls, pregnant women and lactating mothers, our
Prime Minister launched a “Poshan Abhiyan” in 2017-18. More than six
lakh anganwadi workers are equipped with smart phones to upload the
nutritional status of more than 10 crore households. The scale of these
developments is unprecedented.
74. Five archaeological sites would be developed as iconic sites with on-
site Museums. They are: Rakhigarhi (Haryana), Hastinapur (Uttar Pradesh)
Shivsagar (Assam), Dholavira (Gujarat) and Adichanallur (Tamil Nadu).
76. India has moved up from rank 65 in 2014 to 34 in 2019 in the Travel
& Tourism Competitive Index (World Economic Forum). Foreign exchange
earnings grew 7.4% to `1.88 lakh crores for the period January to November
2019 from `1.75 lakh crores
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77. In September 2019, the Prime Minister has launched the Coalition
for Disaster Resilient Infrastructure (CDRI) with its Secretariat in Delhi. This
global partnership is the second such international initiative after the
launch of International Solar Alliance in 2015. This Global Partnership will
help in addressing a number of Sustainable Development Goals (SDGs), as
also the aims of Sendaiframework. It will enhance climate change
adaptation with a focus on disaster resilient infrastructure
79. There are yet, thermal power plants that are old and their carbon
emission levels are high.
For such power plants, we propose that utilities running them would
be advised to close them, if their emission is above the pre-set norms. The
land so vacated can be put to alternative use.
80. In large cities having population above one million, clean air is a
matter of concern. The government proposes to encourage such States that
are formulating and implementing plans for ensuring cleaner air in cities
above one million. Parameters for the incentives would be notified by the
Ministry of Environment, Forests and Climate change. Allocation for this
purpose is `4400 crore for 2020-21.
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நல்ல நாடு
குறள்- 738
(The meaning of this kural is that Freedom from illness, wealth, produce,
happiness and protection (to subjects); these five, are the ornaments of a
kingdom).
Governance
81. Hon’ble Speaker, Sir, all the while I have explained the colour and
composition of the bouquet of flowers – schemes and programmes. They
were grouped under Aspirational India, Economic Development and Caring
India. Now I speak about the two hands that will hold them. One such hand
is Governance – clean, corruption-free, policy driven and good in intent and
most importantly trusting in faith. Trusting every citizen, the aspirational
youth, the hard-working women, the risk-taking entrepreneur, the ever
hopeful and untiring farmer or the wise and old senior citizen. Many among
them are taxpayers. Others may not be taxpayers today. Our Prime
Minister has laid before us Ease of Living as a goal to be achieved on behalf
of all citizens. An important aspect of both ease of living and ease of doing
business is fairness and efficiency of tax administration. We wish to
enshrine in the statutes a “taxpayer charter” through this budget. Our
government would like to reassure taxpayers that we remain committed to
taking measures so that our citizens are free from harassment of any kind.
82. There has been a debate about building into statutes, criminal
liability for acts that are civil in nature. Hence, for Companies Act, certain
amendments are proposed to be made that will correct this. Similarly, other
laws would also be examined, where such provisions exist and attempts
would be made to correct them.
86. There is a growing need for the Indian Statistical system to meet the
challenges of real time monitoring of our increasingly complex economy.
Data must have strong credibility. The proposed new National Policy on
Official Statistics would use latest technology including AI. It would lay down
a road-map towards modernised data collection, integrated information
portal and timely dissemination of information.
87. I am happy to inform that India will host G 20 presidency in the year
2022- the year of 75th anniversary of independence of Indian Nation. During
this presidency, India would be able to drive considerably the global
economic and development agenda. For this historic occasion, I allocate a
sum of ` 100 crore to begin the preparations.
provided for the Financial Year 2020-21. An amount of `5,958 crore has
been provided for the Union Territory of Ladakh.
Financial Sector
90. If Governance was described as one of the pair of hands holding the
bouquet consisting of Aspirational India, Economic Development and Caring
India, the other is the Financial Sector. A clean, reliable and robust financial
sector is critical to the economy. In our efforts to achieve the USD 5 trillion
economy, the financial architecture should keep evolving and move from
strength to strength.
92. I wish to inform this august House that robust mechanism is in place
to monitor the health of all Scheduled Commercial Banks and that
depositors’ money is safe.
94. The limit for NBFCs to be eligible for debt recovery under the
Securitization and Reconstruction of Financial Assets and Enforcement of
Security Interest (SARFAESI) Act 2002 is proposed to be reduced from ` 500
crore to asset size of ` 100 crore or loan size from existing ` 1 crore to ` 50
lakh.
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95. In the last few years, the government has taken concrete steps to
bring our banking system to be robust. However, there is a need for greater
private capital. Accordingly, it is proposed to sell the balance holding of
Government of India IDBI Bank to private, retail and institutional investors
through the stock exchange.
97. To help easy mobility while in jobs, we wish to infuse into the
Universal Pension coverage with auto enrolment; also, we wish to place
such mechanisms which can enable inter-operability and provide safeguards
for the accumulated corpus.
98. MSMEs are vital to keep the wheels of economy moving. They also
create job, innovate and are risk takers. Several measures for the MSMEs
have been taken in the past few years. There are more steps proposed in
this budget also.
98(2). Working capital credit remains a major issue for the MSMEs. It is
proposed to introduce a scheme to provide subordinate debt for
entrepreneurs of MSMEs. This subordinate debt to be provided by banks
would count as quasi-equity and would be fully guaranteed through the
Credit Guarantee Trust for Medium and Small Entrepreneurs (CGTMSE). The
corpus of the CGTMSE would accordingly be augmented by the
government.
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98(3). More than five lakh MSMEs have benefitted from restructuring of
debt permitted by RBI in the last year. The restructuring window was to
end on March 31, 2020. Government has asked RBI to consider extending
this window till March 31, 2021.
Financial Markets
100. Last year, in the budget speech, I had mentioned about deepening
the bond market. To achieve the aspirational growth rate,we would require
flow of capital in our financial system. A lot of work has been done on this in
consultation with the RBI.
101. The Debt-based Exchange Traded Fund (ETF) recently floated by the
government was a big success. Government proposes to expand this by
floating a new Debt-ETF consisting primarily of government securities.
Infrastructure Financing
104. IFSC, GIFT city has the potential to become a centre of international
finance as well as a centre for high end data processing:
104 (1).GIFT IFSC has an approved Free Trade zone for housing vaults. It
already has 19 insurance entities, 40 banking entities. It has also provided
for setting up of precious metals testing laboratories and refining facilities.
With the approval of the regulator, GIFT City would set up an International
Bullion exchange(s) in GIFT-IFSC as an additional option for trade by global
market participants. This will enable India to enhance its position
worldwide, create jobs in India and will lead to better price discovery of
gold.
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104 (2).In recent years there has been a surge in trading volumes of Indian
rupee in the offshore financial centres. The Government and RBI has taken
various measures to permit Rupee derivatives to be traded in the
International Financial Services Centre at GIFT city, Gujarat.
Disinvestment
Fiscal Management
109. Recently there has been a debate over transparency and credibility
of the projected fiscal numbers. Let me assure the House that the
procedure adopted is compliant with the FRBM Act. This is also consistent
with the practices hitherto followed.
110. Revised Estimates of Expenditure for the Financial Year 2019-20 are
at a level of ` 26.99 lakh Crore and the receipts are estimated at `19.32lakh
crore.
111. Every budget must appropriately address the issue of fiscal deficit.
Recently Government has undertaken very significant tax reforms for
boosting investments. However, expected tax buoyancy will take time.
(a) 3.3% for year 2019-20, and 3% for the 2020-21 budget estimate;
(b) 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.
Therefore, I have taken a deviation of 0.5%, consistent with Section
4(3) of FRBM Act, both for RE 2019-20 and BE 2020-21.
112. A good part of the borrowings for the financial year 2020-21 would
go towards Capital expenditure of the Government that has been scaled up
by more than 21%. As, I had previously mentioned another about ` 22,000
crore have been allocated for equity to fund certain specified infrastructure
finance companies, who would leverage it manifold and provide much
needed long-term finance to Infrastructure sector. That should spur growth
impulses in the economy.
PART B
Direct Tax
प्रजानामेवभूत्यर्थं सताभ्योबलिमग्रहीत्।
सहस्रगुणमुत्स्स्रष्टु मादत्तेलहरसंरलविः॥
Those earning up to ` 5 lakhs shall not pay any tax either in the
old regime or in the new regime.
119. Start-ups
Indirect Tax
132. Refund process has been simplified and has been made fully
automated with no human interface.
140. Our policy of Make in India has started giving dividends. India
is now making world class goods and exporting such products. We
have made considerable progress in medical equipment too. Till few
years back we were dependent on imports for medical equipment.
Now, not only we are manufacturing medical equipment but also
exporting them in large quantities. This sector deserves further fillip.
Government has also been committed to provide health services to
all. Ayushman Bharat has made it possible. To achieve the twin
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141. Under Make in India initiative, well laid out customs duty rates
were pre-announced for items like mobile phones, electric vehicles
and their components. This has ensured gradual increase in
domestic value addition capacity in India. Customs duty rates are
being revised on electric vehicles, and parts of mobiles as part of
such carefully conceived Phased Manufacturing Plans.
143. Chemicals are crucial feed stocks for downstream users. PTA,
for example, is a critical input for textile fibres and yarns. Its easy
availability at competitive prices is desirable to unlock immense
potential in textile sector which is a significant employment generator.
Therefore, in the larger public interest, anti-dumping duty on PTA is
being abolished.
147. Mr. Speaker Sir, with these words I commend the Budget to
this august House.