The budget features higher spending, job creation efforts, and tax relief for the middle class. Key tax changes include an increase in the Securities Transaction Tax (STT), cuts in short-term and long-term capital gains taxes, and the elimination of the angel tax. It also adjusts personal income tax slabs under the New Tax Regime.
The Union Budget for FY 2024-25, presented by Finance Minister Nirmala Sitharaman, brings several significant changes aimed at boosting the economy, simplifying tax structures, and promoting sustainable growth.
Here are the key highlights:
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1. Revised Income Tax Slabs:
➤Finance Minister Nirmala Sitharaman announced a thorough review of the Income Tax Act of 1961 to benefit the middle class, expected to be completed in six months.
➤ The new tax regime includes revised tax slabs:
No tax up to Rs 3 lakh income
Rs 3 -7 lakh 5 per cent
Rs 7-10 lakh 10 per cent
Rs 10-12 lakh 15 per cent
Rs 12-15 lakh 20 per cent
Above Rs 15 lakh 30 per cent
➤ The Standard Deduction under the New Tax Regime increased from Rs 30,000 to Rs 75,000, saving Rs 17,500. The family pension deduction for pensioners rose from Rs 15,000 to Rs 25,000.
Announcements for STT, Short-term and long term capital gains:
➤ Capital gains taxation has been streamlined with short-term gains reduced to 20% and long-term gains to 12.5% for specific assets. Capital gains tax will now also apply to unlisted bonds and debentures.
➤ The Securities Transaction Tax (STT) on option sales has increased from 0.0625% to 0.1%. The STT on futures and options (securities has been raised by 0.02% and 0.1%, respectively.
➤ The indexation benefit for immovable assets, like real estate, has been removed, meaning property sellers can no longer adjust their purchase price for capital gains tax. Although the long-term capital gains (LTCG) tax on immovable properties has been reduced from 20% to 12.5%, indexation benefits are no longer available.
➤ The TDS on e-commerce transactions has been reduced from 1% to 0.1%.
➤ The angel tax has been abolished for all investors…
➤ Employer NPS deduction increased from 10% to 14%.
➤ A new solution for NPS (Central Government employees) will be developed based on a review committee’s recommendations.
➤ Assessment Rules: Reopening and reassessment rules have been relaxed. Assessments can now be reopened beyond three years only if undisclosed income exceeds Rs 50 lakh, with a maximum reopening period of five years from the end of the assessment year.
➤ Indian Professionals: Indian professionals working for multinational companies will no longer face penalties for not reporting movable foreign assets, such as ESOPs, if their value is up to Rs 20 lakh.
2. GST Updates
The budget introduces several changes to the Goods and Services Tax (GST) framework. These include waivers of interest and penalties for non-fraudulent demands from FY 2017-18 to 2019-20, provided certain conditions are met. This move aims to ease compliance and reduce the burden on businesses.
3. Fiscal Deficit and Economic Growth
The fiscal deficit is projected to reduce to 4.9% of GDP, with a commitment to further decrease it to 4.5% in the coming years. This disciplined approach is expected to enhance investor confidence and ensure sustainable economic growth.
4. Support for MSMEs and Startups
The budget allocates substantial funds to support Micro, Small, and Medium Enterprises (MSMEs) and startups. New loan schemes and financial support initiatives are introduced to foster innovation and entrepreneurship, which are crucial for job creation and economic diversification
5. Infrastructure Development
Significant investments are planned for infrastructure projects, including transportation, energy, and digital infrastructure. These projects aim to improve connectivity, reduce logistics costs, and enhance the overall business environment.
6. Agricultural Sector Boost
The agricultural sector receives a major boost with increased funding for various schemes aimed at improving productivity, ensuring fair prices for farmers, and promoting sustainable farming practices
7. Customs Duties and Capital Gains Tax
The budget also includes changes in customs duties to promote domestic manufacturing and reduce dependency on imports. Rationalization of the capital gains tax structure to simplify the tax system and encourage investments.
8. Corporate Tax:
➤ Reduction of the corporate income tax rate on foreign companies from 40 % to 35%. ➤ Introduction of measures to streamline transfer pricing assessment procedures.
9. Angel Tax and Equalization Levy:
➤ Abolition of the angel tax to support innovation and startups. ➤ Repeal of the equalization levy to simplify the tax landscape.
10. Reassessment Provisions:
➤ Simplification of reassessment provisions, allowing assessments to be reopened beyond three years, up to five years from the end of the year of assessment, only if the escaped income is more than ₹50 lakh. ➤ In search cases, the time limit for reassessment has been reduced from ten years to six years.
11. Indirect Tax Procedures:
➤ Simplification of indirect tax procedures to reduce compliance burdens and improve efficiency.
12. Vivad Se Vishwas Scheme:
➤ Introduction of the new Vivad Se Vishwas Scheme, 2024, for the settlement of pending direct tax disputes.
Conclusion
The Union Budget for FY 2024-25 reflects the government’s commitment to fostering economic growth, simplifying tax structures, and supporting key sectors. These measures are expected to create a more resilient and inclusive economy, benefiting all sections of society.
Amid a severe hit to the Indian economy by the Covid pandemic in the past eight months, the country’s foreign exchange reserves increased by more than $100 billion since the Covid-induced lockdown was enforced in March-end.
From $469.9 billion in the week ended March 20, 2020, the forex reserves jumped by $102.8 billion to a lifetime high of $572.7 billion in the week ended November 13, 2020, according to the data released by the Reserve Bank of India.
Importantly, the reserves grew by $4.277 billion from the week ended November 6, 2020. The jump was on account of Foreign Currency Assets (FCA), a major component of the country’s reserves, that increased by $5.526 billion to $530.2 billion from $524.7 billion in the preceding week.
However, the gold reserves reduced by $1.233 billion from $37.587 billion to $36.354 billion in the week. On the other hand, the special drawing rights with the International Monetary Fund (IMF) were unchanged from the preceding week at $1.488 billion, the data showed.
Foreign portfolio investors (FPI) have invested Rs 49,553 crore in Indian markets in November so far on the back of high liquidity along with improving global indicators and clarity after the US presidential elections, PTI reported.
The investment stood at Rs 44,378 crore in equities and Rs 5,175 crore in the debt segment between November 3-20 while FPI’s October investment was Rs 22,033 crore.
On the other hand, India saw its highest ever Foreign Direct Investment (FDI) during the first five months April-August of the current financial year. The total inflow was $35.73 billion, according to the Ministry of Commerce and Industry that was also 13 per cent up from the year-ago period.
Meanwhile, bank credit grew 5.67 per cent to Rs 104.04 lakh crore in the fortnight ended November 6, 2020, according to the RBI data.
The bank credit stood at Rs 98.46 lakh crore in the fortnight ended November 8, 2019. Moreover, deposits had jumped 10.63 per cent to Rs 143.80 lakh crore from Rs 129.98 lakh crore during the said period.
In a major relief to companies, the Securities and Exchange Board of India (SEBI) today extended the deadline for submission of financial results for the quarter, half-year, and financial year ended 30 June 2020 to September 15. The SEBI circular said that it has received representations requesting an extension of time for submission of financial results for the quarter or half year-ended 30 June 2020, due to the shortened time gap between the extended deadline for submission of financial results for the period-ended 31 March 2020 and the quarter or half year-ended June 30, 2020.
Under Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘LODR Regulations’), a listed entity is required to submit its quarterly, half-yearly, or annual financial results within 45 days or 60 days, as applicable, from the end of each quarter, half year, or financial year.
Accordingly, listed entities were required to submit the financial results for the quarter, half-year-ended 30 June 2020 on or before 14 August 2020.
Earlier, the regulatory body had also extended the timeline for submission of financial results by listed entities for the quarter, half-year, or financial year-ended 31 March 2020 to 31 July 2020, due to the impact of the coronavirus pandemic.
SEBI further said that today’s announcement shall come into force with immediate effect and advised all stock exchanges to bring the provisions of this circular to the notice of all listed entities.
It has asked the stock exchanges to bring the provisions of the circular to the notice of all listed entities and also disseminate on their websites.
Meanwhile, SEBI’s move to relax the deadlines is expected to give more time to companies already struggling with operations part amid the pandemic.
In-line with the efforts to provide relief to the sagging businesses, Finance Minister Nirmala Sitharaman earlier announced to decriminalise some offences under the Companies Act.
The SEBI has also introduced new norms to give more fund-raising flexibility to stressed firms.
The amendments can help promoters get financial investors on board without losing control of the company.
The Central Board of Direct Taxes (CBDT) has notified new Income-tax Return (ITR) forms applicable for the Assessment Year 2020-21.
CBDT notified Income Tax Return forms of FY 2020-21
G.S.R. 338(E).— In exercise of the powers conferred by section 139 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes has made the rules to amend the Income-tax Rules, 1962.
The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii) vide notification number S.O. 969(E), dated the 26th March, 1962 and last amended by the Income-tax (11th Amendment) Rules, 2020, vide notification number G.S.R. 329 (E) dated 28.5.2020.
In essence, the following are the key changes:
House ownership: Individual taxpayers who are joint owners of house property cannot file ITR 1 or ITR4.
Passport: One needs to disclose the Passport number if held by the taxpayer. This is to be furnished both in ITR 1-Sahaj and ITR 4-Sugam. Hopefully, it will be made mandatory in other ITR Forms as and when they are notified.
Cash deposit: For those filing ITR 4-Sugam, it has been made compulsory to declare the amount deposited as cash in a bank account, if such amount exceeds Rs 1 crore during the FY.
Foreign travel: If you have spent more than Rs 2 lakh on travelling abroad during the FY, you need to disclose the actual amount spent.
Electricity consumption: If your electricity bills have been more than Rs 1 lakh in aggregate during the FY, you need to disclose the actual amount.
Investment details: Details of investment qualifying for deduction under chapter VIA with bifurcation of details of investment made during the period from April 1, 2020 to June 30, 2020.
A new schedule ‘Schedule DI’ has been inserted to claim benefit of investment/ deposit/payments made between 01-04-2020 to 30-06-2020 for the previous year 2019-20.
Thecompanies which signed the MoUs are from Germany, Finland, Taiwan, France, South Korea, Japan, China, USA, Australia, UK
As many as 17 MoUs’ to bring in fresh industrial investments worth Rs 15,128 crore into Tamil Nadu were signed between a host of foreign companies and the Tamil Nadu government in the presence of chief minister Edappadi K Palaniswami on Wednesday.
These projects in areas such as commercial vehicle manufacture, electronics, footwear, information technology, medical equipment and energy are expected to generate 47,150 jobs in Tamil Nadu, an official release here said.
The companies which signed the MoUs are from Germany, Finland, Taiwan, France, South Korea, Japan, China, USA, Australia, UK and the Netherlands, indicating that Tamil Nadu continues to be a destination for foreign direct investment (FDI).
Palaniswami’s government has been taking a number of initiatives for economic revival. They include appointment of a high-power committee of economic experts led by former RBI governor C Rangarajan to chalk out strategies in the medium-term, the Industrial Guidance Bureau facilitating single-window clearance of investment proposals, the recent policy announced to boost production of medical equipment and drugs in the wake of Covid-19 and TIDCO offering a Rs.102 crore package to meet working capital requirement of 799 MSMEs’, an official release said.
The MoUs signed today include the following projects: Daimler India is to expand its commercial vehicle manufacturing at its Oragdam factory in Kancheepuram district involving an investment of Rs.2,277 crore, creating 400 more jobs.
Finnish firm Salcomp will invest Rs.1,300 crore in the Nokia special economic zone in Sriperumbudur to manufacture mobile phone components, to generate 10,000 additional jobs in Kancheepuram district and this project would help to rejuvenate the Nokia SEZ in that district.
The MoUs further include Rs. 900 crore investment by Japan’s Polymatech Electronics to make semiconductor chips at the Oragadam SIPCOT industrial park, a Rs.350 crore joint venture footwear manufacture project by Taiwan’s Chung Jye Company Ltd and Aston Shoes, a Rs.400 crore industrial park to be developed at Mappedu in Kancheepuram district by Australian firm, Lai Investment Manager Pvt Ltd., South Korea’s ‘Mando Automotive India Pvt Ltd. to invest Rs.150 crore in Pillaipakkam SIPCOT industrial park in Kancheepuram district, Netherlands’ Dinex to invest Rs.100 crore in the Mahindra City Industrial Park in Chengalpattu district for auto-components manufacture, a 750-mw gas-based power project at Ponneri in Thiruvallur district by Indo-UK joing venture, Chennai Power Generation Limited’ involving an investment of Rs.3,000 crore, and France’s IGL India Transplantations Solutions Ltd to invest Rs. 18 crore in medical equipment in SIPCOT park at Cheyyar in Tiruvannamalai district.
Down south in Thoothukudi and Tirunelveli districts, a huge investment of Rs. 2,000 crore is envisaged by Vivid Solaire Energy Private Limited of France, to manufacture wind mills equipment, the release said. The USA’s HDCI Data Centre Holdings Chennai LLP will invest in an IT project in Ambattur in Chennai involving an investment of Rs. 2,800 crore, it said.
While Singapore’s ST Tele Media will invest Rs. 1,500 crore in a new IT project in Chennai, wind mill components will be made by Germany’s Baetter in Chennai involving an investment of Rs.210 crore. Besides there, there are four more industrial investments in the pipeline in Kancheepuram, Thiruvallur and Chengalpattu districts including China’s ‘BYD India Private Ltd’, to invest Rs.50 crore in an electric vehicle manufacture project.
Mahindra Origins in a JV with a Taiwanese company, TJR Precision Technology Company, will invest Rs.46 crore in making precision components at Ponneri. Further, USA’s Lincoln Electric will invest Rs.12 crore in an R & D Centre at Mahindra Industrial Park in Chengalpattu district, the release added.
Top officials including Chief Secretary, Mr. K Shanmugam, Industries Secretary, N Muruganandam, State Guidance Bureau managing director, Ms. Karkala Usha, its executive director Mr. Aneesh Shekhar, and representatives of the various companies were among those who were present on the occasion.
Google will also leverage its advantage as a ‘data company’ and deploy technology as the key differentiator with expertise in areas such as Artificial Intelligence and Machine Learning
Technology behemoth Google is investing heavily in people and partnerships to grab a larger share of the Indian Cloud market, as it takes on global rivals Microsoft, IBM and Amazon Web Services in the country, a top company executive said.
Google will also leverage its advantage as a ‘data company’ and deploy technology as the key differentiator with expertise in areas such as Artificial Intelligence and Machine Learning, said Karan Bajwa, the newly appointed managing director of Google Cloud in India.
“The technology is right. The brand is right. Google’s hiring great talent and putting the right people in front of the customers, and there’s very strong investments happening on the Google Cloud across the world, as well as in India,” Bajwa told ET.
Only 20% of workloads have so far moved to the cloud and there is opportunity in the remaining 80% which has yet to migrate to public or private clouds, he said.
The ongoing economic crisis unleashed by the Covid-19 pandemic will fast track the shift as more companies look at cost efficiencies, Bajwa said.
Although IBM and Microsoft have a lead over Google in the cloud business, that was not a point of concern, he said.
“For 80% of the companies, the journey will start now, so the fact that somebody is ahead and somebody is behind, I honestly don’t worry about it.”
As capital becomes scarce going forward, people will want to conserve every dollar. “It’s going to move to an operational expense from a capital expenditure. So, there will be a faster acquisition of customers…,” he said.
Google will build a “differentiated partner strategy” compared to rivals. It will also leverage on its huge reach due to its dominance of Search and areas like payments and advertising, he said.
Over the last 60 days, “digital natives” have been looking to optimise existing technology, and companies that have so far not adopted the cloud are opening up to the opportunity due to cost pressures, he pointed out.
“We’ve always seen that incumbency is a strong advantage, Google’s incumbency has built the business in most of these organizations where Google is helping these customers acquire new customers, get into new markets, grow revenues, grow margins, and that’s a very strong incumbency than anyone else,” Bajwa, who was earlier IBM India head and who has had a long stint with Microsoft as its MD of sales and marketing, said.
Google will bet on building a team that wins top customers and competes with the dominant players, he said. “By the time we are done with Covid-19, we will be bringing on board very senior people from the industry who have led organizations and who have very strong credibility. That makes a huge difference as customers feel comfortable with the people they are buying from,” he said.
Last week, Google appointed Microsoft veteran Anil Bhansali as vice president of engineering.
Google already has a tie-up with Bharti Airtel for its cloud business and the search giant also recently announced a second cloud region in Delhi, after it launched the Mumbai region in 2017.
“We would not be making these investments in the tens of billions of dollars if we did not think we would make money with customers,” Bajwa added.
At as much as 10% of GDP, the big stimulus package did not appear to leave any major sphere untouched.
Over five consecutive days of interaction with the country’s financial media, FM Nirmala Sitharaman provided the break-up of PM Modi’s Rs 20 lakh crore COVID-19 stimulus for India.
At as much as 10% of GDP, the package did not appear to leave any major sphere untouched as Prime Minister Modi brought out the fiscal artillery to complement RBI’s monetary measures spread over the past few weeks, putting India firmly in the league of biggies that have gone all out against the virus.
In his speech, Mr. Modi said his package would focus on land, labour, liquidity and laws, and would deal with such sectors as cottage industries, MSMEs, the working class, middle class and industry. He also talked of focusing on empowering the poor, labourers and migrant workers, both in the organised and unorganised sectors.
Dubbed Atmanirbhar Bharat Abhiyaan, this Covid relief package puts bold reforms at the heart of Modi’s stated plan to make India self-reliant so that any other crisis that may emerge in future could be efficiently tackled. Below we collate all the details that emerged in five tranches over the past five days.
FIRST TRANCHE
MSME measures
Collateral free automatic loans- a move that’ll enable 45 lakh units to restart work and save jobs. 4 year tenor with 12 months moratorium. 100% credit guarantee on principal and interest – Rs. 3 Lakh Crores (60k Cr cover)
Subordinate debt provision of Rs 20,000 crores for 2 lakh stressed MSMEs. Besides, there will be Rs 50,000 crore equity infusion via Mother fund-Daughter fund for MSMEs that are viable but need handholding. A fund of funds with corpus of Rs 10,000 crore will be set up to help these units expand capacity and help them list on markets if they choose.
Definition of MSMEs revised — the move will allow MSMEs to aim for expansion without losing benefits. Differentiation between manufacturing and service units to be removed.
Small units – Investments upto 10 Cr + Turnover upto 50 Cr
Medium units – Investments upto 20 Cr + Turnover upto 100 Cr
Government tenders upto 200 Crores will no longer be on global tender basis. Global tenders will be disallowed for upto 200 Crores. This will make MSMEs eligible to participate in Government purchases.
Post Covid, e-market linkage to be provided for all MSMEs. Receivables by MSMEs from the Central Government and all PSUs will be cleared in next 45 days
For non-bank lenders
Rs 30,000 crore special liquidity scheme for investing in investment grade debt paper of NBFCs, HFCs and MFIs. These NBFCs are those that are also funding MSMEs. These will be fully guaranteed by government of India.
Rs 45,000 crore partial credit guarantee scheme 2.0 for NBFCs. The first 20% loss will be borne by the guarantor that is government of India.
For Discoms, a one-time emergency liquidity injection of Rs 90,000 crore against all their receivables. The states will guarantee it.
For employees
Liquidity relief of Rs 2,500 crore EPF support to all EPF establishments. The EPF contribution will be paid by the govt for another 3 months (till August). It will benefit more than 72 lakh employees.
Statutory EPF contribution for all organisations and their employees covered by EPFO to be reduced to 10% from 12% earlier (This doesn’t apply to govt organisations). This will help infuse Rs 6,750 cr of liquidity into these organisations.
For Power distribution companies
Power distribution companies will get Rs 90,000 crore liquidity against receivables from state-owned Power Finance Corp. and Rural Electrification Corp. This will allow these discoms to pay dues to power producers.
For Contractors & others
An extension of up to 6 months (without costs to contractor) to be provided by all Central Government Agencies like Railways, Ministry of Road Transport & Highways, Central Public Works Dept.
On real estate, urban development ministry will issue advisory to states/UTs so that the regulators can invoke force majeure. The regulators can suo moto extend completion/registration dates for six months for projects expiring on or after March 25, 2020.
A reduction of 25% of existing rates of Tax Deducted at Source (TDS) & Tax Collection at Sources (TCS) from tomorrow till March 31, 2021. This will release Rs 50,000 crores.
Due date of all Income Tax Return filings extended from July 31 to November 30. Vivaad se Vishwas scheme extended till December 31,2020, without any extra payments.
All pending refunds to charitable trusts and non-corporate taxpayers (but including LLP) will be issued immediately
Date of assessments getting barred as on Sep 30, 2020 extended to December 31, 2020. Date of assessments getting barred as on March 31, 2021 extended to September 30, 2021.
SECOND TRANCHE
Focus on migrant workers, small farmers and the poor, in the manner shown below:
Free food for migrants
For those migrants who don’t have NFSA cards or state cards, 5 Kgs of wheat or rice per person and one kg channa per family per month for next two months to be provided and it will reach through the state governments. This will entail Rs 3,500 crore and is likely to benefit around 8 crore migrants.
One Nation, One Ration Card
National Portability Ration Cards can be used in any ration shops that will be applicable across the country. By August 2020, 67 cr beneficiaries in 23 states or 83% of all PDS beneficiaries will get covered. By March 2021, 100 per cent will be covered.
Rental accomodation
Under PM Awas Yojaana, scheme for rental housing for migrant workers. Under the scheme incentives will be offered to private manufacturing units and industrial units to develop affordable housing, converting govt funded houses into affordable renting accommodations for migrant workers. Shall be done on PPP on concessionaire basis. State government agencies will also be incentivised to develop affordable housing.
MUDRA Shishu loan
Those who have availed loans up to Rs 50,000, an interest subvention of 2% for next 12 months after the moratorium period extended by RBI ends. Three crore people will get benefit of Rs 1500 crore.
Street Vendor
Special scheme for street vendors to avail Rs 5,000 crore loan facility. Will be given Rs 10,000 of working capital.
Affordable Housing
Credit-linked subsidy scheme for middle income households in the income group Rs 6-18 Lakh extended to March 2021. The CLSS scheme was operationalised from May 2017 and extended up to March, 2020. Now, it has been extended till March 2021. This will lead to investments of Rs 70,000 crore in housing and kick-start sectors like steel, cement and create jobs.
For Tribals
Rs 6,000 crore worth of proposals have come from states under CAMPA funds. Tribal people will get employment in forest management, wildlife protection/management and other forest related activities.
For Small/Marginal Farmers
The government is extending Rs 30,000 crore additional capital emergency funds through NABARD for post-harvest Rabi and Kharif related activities for small and marginal farmers.
Under the PM Kisan Credit Card, Rs 2 lakh crore of concessional credit to boost farming activities and it will benefit 2.5 crore farmers. Those in animal husbandry and fisheries will also be included.
THIRD TRANCHE
For framers, and such sectors as food processing and allied activities.
For Upgrading Infrastructure
One lakh crore fund for strengthening the farm gate infrastructure like cold chains, post harvest storage infrastructures etc.
Rs 10,000 crore fund for micro food scheme will be executed with cluster based approach. Will benefit 2 lakh Micro Food Enterprises. For instance, Bihar can have Makhana cluster, Kashmir can have Kesar cluster, Telangana can have Turmeric cluster, Andhra can have chilli cluster.
Govt will launch Pradhan Mantri Matsya Sampada Yojana for development of marine and inland fisheries. Rs 20,000 crore will be spent to fill the gaps in value chains. This will lead to an additional fish production of 70 lakh tons in next five years and provide employment to 55 lakh people.
Rs 13,343 crore for vaccination of livestock in India to eradicate foot and mouth disease.
Rs 15,000 crore will be spent on ramping up the dairy infrastructure. Also, investments will be made in cattle feed.
Rs 4,000 crore for growing of herbal and medicinal plants. Ten lakh hectares of land will be used for growing medicinal and herbal plants and will provide income of nearly Rs 5,000 crore for farmers.
Rs 500 crore have been allocated for beekeeping. This will help 2 lakh beekeepers.
TOP to TOTAL: Rs 500 crore for Operation Greens that will be extended beyond tomatoes, potatoes and onion and will applicable to all vegetables.
Proposes amendment to Essential Commodities Act to enable better price realisation for farmers. Food stuffs including edible oils, oilseeds, pulses, onions and potato will be deregulated. And stock limits will be imposed only under exceptional circumstances like famine and surge in prices.
Agriculture Marketing Reforms
32. A central law will be formulated to provide (a) Adequate choices to sell produce at attractive price, (b) Barrier free inter-state trade, and (c) Framework for e-trading of agriculture produce.
Agriculture Produce Price and Quality Assurance
33. Facilitative legal framework will be created to enable farmers for engaging with processors, aggregators, large retailers, exporters etc. in a fair and transparent manner. Risk mitigation for farmers, assured returns and quality standardisation shall form integral part of the framework.
FOURTH TRANCHE
For Upgrading Infrastructure
Included structural reforms in 8 critical sectors- Coal, Minerals Defence Production, Airspace management, Social Infrastructure Projects, Power distribution companies, Space sectors and Atomic Energy.
Coal Sector
Government is introducing the commercial mining of coal. India needs to reduce import of substitutable cal and increase self-reliance in coal production.
34. The investment of Rs. 50,000 crores is for the evacuation of enhanced CIL’s (Coal India Limited) target of 1 billion tons of coal production by 2023-24 plus coal production from private blocks.
Minerals
35. Enhancing private investment in mineral sector.
36. FMalso explained the rationalisation of stamp duty payable at the time of award of mining leases.
37. 500 mining blocks would be offered through an open and transparent auction process, a joint auction of Bauxite & Coal mineral blocks will be introduced to enhance Aluminum industry’s competitiveness.
Defence Production
38. Indigenization of imported spares, separate budget provisioning for domestic capital procurement.
39. FDI limit in defence manufacturing under automatic route is being raised from 49% to 74%.
40. Corporatisation of Ordnance factory board was also announced.
Civil Aviation (Airspace Management, World Class Airports Through PPP, MRO HUB)
41. Restrictions on the utilisation of Indian Air Space will be eased so that civilian flying becomes more efficient.
42. Government is working hard to make India a global hub for for aircraft maintenance, repair and overhaul.
43. Airports Authority of India has awarded 3 airports out of 6 bid for operation & maintenance on (PPP) basis. Additional investment by private players in 12 airports in first & second rounds expected around Rs 13,000 crores.
Power Sector Reforms
44. Power Distribution Companies in Union Territories to be privatised in line with the new tariff policies. This will enable to strengthen industries and bring in efficiency in the entire power sector. This will also enable stability in the sector, announced the FM.
Boosting Private Sector investment
45. Boosting private sector investment in Social Infrastructure through revamped Viability Gap Funding Scheme of Rs 8,100 crores.
Space Sector
46. Boosting private participation in space sectors. Government is working on a liberal geo-spatial policy. Private sector to be co-traveller in India’s space sector journey through launches, satellite services, commented the Finance Minister.
Atomic Energy
47. The government intends to link India’s robust start-up ecosystem to the nuclear sector – Technology Development cum Incubation Centres will be set up for fostering synergy between research facilities and tech entrepreneurs. Establishment of research reactor in PPP mode for production of medical isotopes.
Fifth Tranche
48. MGNREGS: Additional funding of Rs 40,000 crore to the scheme over and above the Budgetary Estimate.
49. Health: All districts will have infectious disease hospitals while at the block-level, public health labs will be set up.
50. Education: PM eVidya programme to be launched immediately. Each Classroom from 1 to 12 will have one TV channel. Special e-content for visually & hearing impaired. Top 100 universities will be permitted to start online courses by May 30, 2020.
51. IBC reforms: Covid-related debt to be excluded from definition of default under the IBC. No fresh insolvency for next one year. Minimum threshold to initiate insolvency raised to Rs one crore from Rs one lakh earlier.
52. Decriminalising Companies Act: Violations under most of the Companies Act to be decriminalised. This will ease the burden on courts and tribunals. Seven compoundable offences under Companies Act being dropped, 5 offences to be dealt under alternative framework.
53. Listing norms: Companies can now list securities directly in foreign jurisdictions
54. New Public Sector Policy: Public sector enterprise policy: All sectors are open to the private sector while public sector enterprises will play an important role in defined areas. Govt will notify strategic areas and in them at least one PSE will remain but private sector will be allowed. In other sectors, PSEs will be privatised.
55. Additional resources to States: Centre has decided to increase borrowing limit of states from 3% to 5% for FY21. This will give extra resources of Rs 4.28 lakh crore to states. This despite, states having borrowed only 14% of the limit authorised to them. 86% remains unutilised. The additional borrowing limit has been linked with initiating reforms.
The finance minister also gave a break up of how the Rs 20 lakh crore was allocated among the five tranches and the previous schemes as well as the RBI measures.
