Major Announcements Of The Budget 2019

On July 5^th, 2019, Modi 2.0 launched its first union budget, presented by Finance Minister Nirmala Sitharaman, the first ever woman Finance Minister to present the Budget. In it, she detailed how she plans on making India a $5 trillion Economy through various expenditures & policies. Let us have a look at some of the major policies announced and how they are going their cascading effects on the citizens.

1) Tax Changes

While there was no major tax change announced for the current tax slabs, much to the disappointment of citizens in the lower tax slabs who were expecting a tax cut, in order to keep in line with Modi’s initiative of keeping this budget focused on the “Gareeb” a tax hike has been introduced in surcharges of 3 % from those with income of 2.5cr – 5cr and 7% for those with Income above 5cr. A cut in corporate tax to 25% has also been introduced however it only applies to companies with an annual turnover of up to 400 cr.

2) Fiscal Concerns

Coming up to the Budget, concerns were expressed regarding the Fiscal Deficit, with India already meeting around half of the expected allocation within 2 months. Finance Minister Sitharaman claimed that Fiscal Discipline is a top Priority for the Government and that the 3.3% is completely on course with the Glide Path.

3) Easing up in Foreign Direct Investment

In a move to increase FDI, Sitharaman announced that there were plans in place to increased FDI limits in the aviation, insurance intermediaries and select media, hence encouraging FDI in an attempt to boost the Economy without worsening the Fiscal Position, and also maybe an attempt to find buyers for Air India & Jet Airways. Talk were also made of potential easing of rules for single brand retailers such as Apple, with regards to regulations governing companies to locally source 30% value of goods sold in India.

These were just some of the major policy announcements affecting the Economy. Including those above, policies were announced with regards to Disinvestments, with Governments willing to reduce their share to blow 51% of the PSUs, Startups, mainly regarding the Angel Tax Relief and many more sectors. With a budget being announced in such a controversial time, with ongoing Trade Wars and the Global Economy on the brink of a recession, all eyes must be focused on how the Government performs with this budget and how they plan on keeping track with their goals, particularly in regards to India’s ever climbing Fiscal Deficit.