Special Budget Edition 2019

FEFF TIMES #Issue: July 6, 2019

Union Budget
2019 Analysis
FM Nirmala Sitharaman
yesterday under Modi
cabinet 2.0 presented the
Union budget 2019. The
main challenge was how
to allocate funds for all
the new government
schemes and staying
within the fiscal deficit
target.

Rs. 249.96 crore has been allocated for

GOI bets big on One Nation & setting up Ayushman Bharat Health and
One Health scheme, additional Wellness Centres under the National
funds allocated for health Urban Health Mission to provide
schemes comprehensive primary care close to the
community, and Rs. 1,349.97 crore has
been allocated for setting up health and
Rs. 62,659.12 crore outlay was announced wellness centres under the National
for the health sector in the budget which Rural Health Mission. These centres will
is the highest in the last two financial be equipped to provide treatment for
years. The health outlay for this year saw diseases such as high blood pressure,
an increase of around 19% as compared to diabetes, cancer and old age-related
the previous when it was Rs. 52,800 illness.
crores.

Among the budgetary allocation Rs. 6,400

crores are earmarked for the centre's
flagship health insurance scheme
Ayushman Bharat - Pradhan Mantri Jan
Arogya Yojna (AB-PMJAY).

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 #Issue: July 6, 2019 FEFF TIMES

GOI is betting big through Bharatmala Project & other

Infrastructure schemes

 Proposal to invest 100 lakh crores

in the infrastructure sector over the
next five years
 Various steps were announced to
scale up infrastructure programmes
including augmenting 1,25,000 km of
rural roads under Pradhan Mantri
Gram Sadak yojana at a cost of Rs.
80,250 crore and creating a national
highways grid
 1.95 crore houses to be provided to
eligible beneficiaries during 2019-20 to 2021-22 under the Pradhan Mantri Gramin Awas Yojana
 Higher Investment in suburban railways through Special Purpose Vehicle (SPV) like Rapid regional
Transport System (RRTS)
 Proposal to encourage public private partnership (PPP model) to achieve faster development and
completion of tracks, rolling stock manufacturing and delivery of passenger freight services
 There are plans to make India a hub for aircraft financing and leasing activities utilizing existing
International Financial Service Centres and SEZs
 The Government will examine suggestions of further opening up of FDI in aviation sector in consultation
with all stakeholders
 Inland waterways for cargo transportation are planned to be developed, which in turn will help to
decongest roads and railways
 Gas grids, water grids, i-ways and regional airports blueprints will be made available

Photo Caption – Bharatmala Project (Connecting India)

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 FEFF TIMES #Issue: July 6, 2019

REFORM, PERFORM & TRANSFORM – New Motto of Modi 2.0

Banks
 Public Sector Banks reduced by 8; 6 Banks have come out of PCA
 70,000 crores will be provided as capital for PSU Banks
 PSBs to leverage technology, offering online personal loans and doorstep banking, and enabling customers of
one PSBs to access services across all PSBs
 Steps to be initiated to empower account holders to have control over deposit of cash by others in their
accounts

NBFCs
 NBFCs are playing important role in scaling consumption demands
 On purchase of high-rate pooled assets of NBFC amounting of Rs 1 lakh crore in this FY, govt will provide one-
time 6 month credit guarantee
 To allow FIIs & FPIs investment in debt securities issued by NBFCs
 Credit Guarantee Enhancement Corporation to be set up long-term bonds with specific focus on infra sector
 Regulation of HFCs (Housing Finance Cos) to move to RBI from National Housing Bank
 Govt. will take up measures to make RBI & SEBI depositories inter-operable
 Requirement of creating a Debenture Redemption Reserve will be done away with to allow NBFCs to raise
funds in public issues
 Rs. 100 lakh crore investment in infrastructure intended over the next five years. Committee proposed to
recommend the structure and required flow of funds through development finance institutions

Stock Market
 User friendliness of trading platforms for corporate bonds will be reviewed, including issues arising out of
capping of International Securities Identification Number
 To deepen corporate tri-party repo market in corporate debt securities. Plan to enable stock exchanges to allow
AA rated bonds as collateral
 SEBI to mull increasing minimum public shareholding to 35% from 25%
 SEBI to launch Social stock exchange for listing social organisations working for social welfare objective

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#Issue: July 6, 2019 FEFF TIMES

Railway Infrastructure to get strong support in terms

of cashflow through PPP Model

 Budgetary allocation of Rs 65,837 crore and the highest ever NEW GOVERNMENT
outlay for capital expenditure amounting to Rs 1.60 lakh crore for
railways SCHEMES
 Railways to be encouraged to invest more in suburban rail
network via SPVs

 Government to complete the dedicated freight corridor project by

2022

New Jal Shakti ministry will

work with states to ensure Har
Ghar Jal for all rural houses by
2024

Rs 10,000 crore for FAME II

scheme on April 1, 2019 to
encourage faster adoption of
electric vehicles by providing
right incentives and charging
infrastructure

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 FEFF TIMES #Issue: July 6, 2019

Demonetisation of Rich People Again, have to pay super rich tax

 No change in personal income tax rates

 Custom duty hike on fuel by 1 rupee, gold and precious items; Petrol & diesel to get costlier

 Surcharge on individuals having taxable income from Rs 2 crore to Rs 5 crore; and 5 crore and above will be

enhanced. The effective tax rate for them would be 3% and 7% respectively

 Additional income tax deduction of 1.5 lakh rupees on the interest paid on loans taken to purchase e-vehicles

 To boost affordable housing, additional deduction up to Rs. 1.5 lakh will be provided for interest paid on loans

borrowed up to 31st March, 2020 for purchase of house valued up to Rs. 45 lakhs

 Corporate tax with turnover of up to Rs 400 crore slashed to 25 per cent from a current rate of 30 per cent

 Advises GST Council to reduce tax rate on EVs from 12 per cent to 5 per cent

 Duty has been raised on: tiles, cashew kernels, vinyl flooring, auto parts, some synthetic rubber, digital and

video recorder and CCTV camera

 PAN and AADHAAR made interchangeable for convenience of tax payers; Income Tax returns can now on be

filed using AADHAAR number, if PAN card not available and vice-a-versa

 Faceless Income Tax Assessment in electronic mode to be launched in 2019 in a phased manner involving no

human interface, to reduce taxpayer trouble

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Breakdown of Government’s spending sector wise

With increase in spending it is important to see how government is planning to keep the spending in the target of
fiscal deficit of 3.3 % that is revised from 3.4 %.
To understand that, we spend to understand the cash flow in government’s treasury –

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 FEFF TIMES #Issue: July 6, 2019

Government is planning to manage the fiscal deficit by taking following measures –

 More Divestment in shareholding of government in PSUs
 Dividend Income from PSUs & RBI
 Borrowing in Foreign Currency
 Increased in Surcharge for people having income more than 2 crores
 Increase surcharge in Gold
 Increase in Tax on MNCs giving Dividends to get rid of excess cash reserves
The important thing to watch is will the government manage to keep its spending within the projected limits.

Government’s 10-point vision for the Decade

Source – GOI website

Source – GOI website

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