Union Budget 2019: Key Provisions and Important Updates

This article outlines the significant announcements and changes introduced in the Union Budget of 2019. It covers various sectors, including taxation, infrastructure, education, and social welfare, providing a concise overview of the government's financial plan for the year.

Direct Taxation - 2019 Budget Overview

Several important amendments were made concerning direct taxation:

• The interest deduction for housing loans under Section 80EEA was increased by 1.5 lakh rupees. This applies to home loans taken by March 31, 2020, for self-occupied properties valued up to Rs 45 lakhs.
• Taxpayers can now use their Aadhaar number interchangeably with PAN for convenience, including for filing income tax returns.
• To curb cash transactions, a 2% TDS (Tax Deducted at Source) will be levied on cash withdrawals exceeding Rs 1 crore annually from bank accounts, under the new Section 194N.
• A surcharge increase was introduced for individuals with higher taxable incomes:
  • For incomes between Rs 2 crores and Rs 5 crores, the surcharge increased to 25% for FY 2019-20.
  • For incomes between Rs 5 crores and Rs 10 crores, the surcharge increased to 37% for FY 2019-20.
• A proposal was made to offer relief regarding the levy of Securities Transaction Tax.
• The 25% corporate tax rate, previously applicable to companies with an annual turnover of up to Rs 250 crore, was extended to those with an annual turnover of up to Rs 400 crore.
• The deduction under Section 35AD was expanded to include industries manufacturing Li-Ion batteries, semiconductors, laptops, and photovoltaic cells.
• An additional income tax deduction of up to Rs 1.5 lakhs was proposed under Section 80EEB for interest paid on loans specifically for purchasing electric vehicles.
• A faceless and anonymous income tax assessment system began its phased rollout during the year.

Infrastructure Sector - Budget 2019 Highlights

The budget placed significant emphasis on developing India's infrastructure:

• Increased investment was targeted towards infrastructure projects, national highways, and the aviation sector.
• The second phase of the Bharat Mala project was announced to enhance state highways.
• A comprehensive restructuring plan for national highways was slated for implementation.

Education Sector - Budget 2019 Focus

Key initiatives for education included:

• A new national education policy was proposed, aiming for substantial reforms in both secondary and higher education.
• Digital education was to be promoted through the Swayam Initiative.
• Greater focus was placed on research and development, with the National Research Foundation established to fund and promote research, consolidate grants from various ministries, and prevent duplication of projects.
• The new national educational policy was also designed to transform the Indian education system for the youth.

Startup Development - Budget 2019 Initiatives

The government revealed plans for specific programs aimed at supporting startups, to be broadcast on DD News.

Household Welfare - Budget 2019 Provisions

Provisions for households focused on basic amenities and environmental sustainability:

• The budget aimed to provide housing, electricity, clean cooking facilities, and safe drinking water to all rural Indian households.
• Rainwater harvesting, groundwater recharge, and the management of household wastewater for agricultural reuse were encouraged.
• The "Har Ghar Jal" initiative was set to ensure piped water supply to all rural households by 2024.
• Seven crore LPG connections had already been provided to rural households.

Pension Scheme - Budget 2019 Announcement

A pension benefit was proposed for approximately 3 crore retail traders and shopkeepers with an annual turnover up to Rs 1.5 crore.

MSME Sector - Budget 2019 Support

Significant reforms and support were planned for Micro, Small, and Medium Enterprises:

• An allocation of 350 crore rupees was made for a 2% interest subvention scheme for all GST-registered MSMEs on fresh or incremental loans.
• Large-scale reforms were planned, including the creation of a government platform to facilitate MSME payments.
• MSMEs were able to secure loans up to 1 crore rupees within 59 minutes, with Rs 350 crore already disbursed.

Women Empowerment - Budget 2019 Measures

Initiatives for women's empowerment included:

• A committee involving public and private stakeholders was to be formed to address gender equality.
• Women operating Self-Help Group (SHG) Jan Dhan Accounts would be eligible for a Rs 5,000 overdraft facility.
• Loans up to Rs 1 lakh were offered to women entrepreneurs under the Mudra Scheme.

NRI Provisions - Budget 2019

Proposals for Non-Resident Indians (NRIs) included:

• The issuance of Aadhaar cards upon arrival for NRIs holding Indian passports.
• To boost NRI investment in the Indian capital market, the NRI portfolio scheme route and FPI (Foreign Portfolio Investment) route were proposed to be merged.

Railway Budget - 2019 Highlights

The railway sector also saw important announcements:

• An estimated investment of 50 lakh crore rupees was deemed necessary for railway infrastructure between 2018 and 2030.
• Public-Private Partnerships (PPP) were to be utilized for accelerating the development and delivery of passenger and freight services.
• A railway station modernization program was scheduled to commence during the year.
• Indian Railways was encouraged to increase investment in urban and suburban regions.
• At the time, 657 KM of Metro Rail was operational across the country.

Banking and Financial Sector - Budget 2019 Reforms

Reforms aimed at strengthening the financial system were outlined:

• Measures were planned to enhance governance in Public Sector Banks.
• Non-Performing Assets (NPAs) of commercial banks had decreased by over 1 lakh crore rupees in the preceding year.
• A record recovery of over 4 lakh crore rupees was achieved through the Insolvency and Bankruptcy Code (IBC).
• Following the consolidation of Public Sector Banks, a capital injection of 70,000 crore rupees was provided to improve credit.
• The government successfully consolidated PSBs, reducing their total number by eight.
• Fundamentally sound Non-Banking Financial Companies (NBFCs) were to receive up to 1 lakh crore rupees in funding from the government during the current financial year.
• Proposals were made to enhance the regulatory authority of the Reserve Bank of India (RBI) over NBFCs, including the requirement to maintain Debenture Redemption Reserve.
• The regulatory authority for housing finance was proposed to be transferred from the National Housing Bank (NHB) back to the RBI.

Electric Vehicles - Budget 2019 Incentives

Incentives were introduced to promote electric vehicles:

• The GST rate on electric vehicles was reduced from 12% to 5%.
• An additional income tax deduction of up to Rs 1.5 lakhs was provided on interest paid for loans taken to purchase electric vehicles. This deduction aims to make electric vehicles more affordable.

Technology Sector - Budget 2019 Emphasis

The budget highlighted advancements in technology:

• Solar storage batteries and chargers were included in the Section 35AD deduction.
• A mass-scaling program for LED bulbs resulted in the distribution of approximately 35 crore LED bulbs.
• Machines and robots were planned for deployment in sanitation services.
• India aimed to align with global technological trends by focusing on training youth in Virtual Reality (VR), Artificial Intelligence (AI), and Robotics.