India unveils budget for financial year 2019-20


India's Finance Minister Nirmala Sitharaman (C) gestures during a photo opportunity as she leaves her office to present the federal budget in the parliament in New Delhi, India, July 5, 2019 (Photo: REUTERS/Anushree Fadnavis).
India's Finance Minister Nirmala Sitharaman (C) gestures during a photo opportunity as she leaves her office to present the federal budget in the parliament in New Delhi, India, July 5, 2019 (Photo: REUTERS/Anushree Fadnavis).

INDIA on Friday (5) unveiled a budget aimed at boosting infrastructure and foreign investment, the first since the Bharatiya Janata Party (BJP) led by prime minister Narendra Modi returned for a second term in power.

Here are the highlights of finance minister Nirmala Sitharaman’s budget for the 2019-20 fiscal year that began April 1.

Deficit
* Fiscal deficit for 2019-2020 seen at 3.3 per cent of GDP

Borrowing
* Government to borrow a gross Rs 7.1 trillion via bonds in 2019-20

* Government to borrow a net Rs 4.73 trillion via bonds in 2019-20

* Short term borrowing seen at Rs 250 billion in 2019-20

* Government to buy back Rs 500bn of bonds in 2019-20

Revenues/Receipts
* Dividends from state-owned firms seen at Rs 574.87bn in 2019-20

* Gross tax revenue seen at Rs 24.6 trillion in 2019-20

* Net tax revenues seen at Rs 16.49 trillion in 2019-20

Taxation
* Will levy tax deduction at source of 2 per cent for cash withdrawals exceeding Rs 10 million per year

* Proposes relief in securities transaction tax

* All companies with annual turnover of Rs 4bn will now be under the 25 per cent tax bracket

* Customs duty on steel raised to 7.5 per cent from 5 per cent

* To increase customs duty on gold and precious metals to 12.5 per cent

Expenditure
* Total government spending seen at Rs 27.86 trillion in 2019-20

* Government to spend Rs 1.74 trillion on pensions in 2019-20

* Government to spend Rs 6.6 trillion on interest payments in 2019-20

Economy
* India will become a $3trn economy in the current fiscal year, and a $5 trillion economy in the next few years

* India to invest heavily in infrastructure and job creation

* Government will raise part of its gross borrowing in external markets in foreign currencies

Investment
* India will ease foreign direct investment restrictions in single-brand retail

* Proposes further opening up of FDI in aviation, insurance, media and animation sectors

* Important to get retail investors to invest in treasury bills

* Will allow foreign investors to buy debt of listed real estate investment trusts

* Government aiming for $14.5bn target for disinvestment proceeds in financial year 2020

Banking
* State-owned banks proposed to be provided Rs 700bn of additional capital

* Will strengthen central bank’s authority over shadow banks

* There is a need to give tax parity to non-banking finance companies

Infrastructure
* The government will upgrade 125,000 kilometres of roads over the next five years at a cost of $11.6bn.

* Railway infrastructure will need an investment of $72bln between 2018 and 2030

* Government to encourage global companies to set up large manufacturing plants

* India will enter into aircraft financing and leasing activities.

(Reuters)