Union Budget 2020: What Changes Can We Expect?

It is that time of the year when almost everyone around us starts discussing the economic and financial status of the country. From the uncles at the road-side tea stalls to the corporate guys at Wall Street, everyone starts speculating about the forthcoming ‘budget’. 
The onus is on the Finance Ministry to maintain the balance between the ‘pro-poor’ schemes and ‘capitalistic’ measures. The finance minister, Nirmala Sitharaman has to face the real test of sailing the Indian Economy through these troubled waters of economic slowdown. 

Bull or Bear
This will be the first budget of the decade 2020 and eighth successive budget since BJP landslide victory in the year 2014. The Central government will try the best to put more money in the hands of taxpayers in order to boost demand and household savings. The same could be achieved by changes in the slabs of income tax and raise in the limit of standard deduction. Also, speculations are that there would be changes in the provisions in order to claim more deductions under Section 80C of the Income Tax Act. The ministry may consider no personal income tax applicable up to the income of Rs 5 lakhs for the individuals and income tax slabs should be rationalised to 10% for people earning up to Rs 10 lakh per year according to sources.

Schemes to make National Pension System (NPS) popular could be introduced to target young segment and salaried class. NPS is a voluntary defined contribution pension system in India. It is an EEE instrument in India where entire corpus escapes tax at maturity and entire pension withdrawal amount is tax-free. Also, the government may also consider doubling the tax benefit on National Pension System (NPS) contributions from Rs 50,000 to Rs 1 lakh. The PHD Chamber has suggested that the government should also bring petroleum products under the ambit of GST to reduce the cascading impact of indirect taxation.

From Industry Corner

Here are some expectations of the Budget from different industry bodies.
  • Society of Indian Automobile Manufacturers (SIAM)
SIAM is expecting the ministry to develop the Scrappage Policy to be incentives based. The suggestion to increase budget allocation for ICE bus procurement by state transport undertakings has also been made by the body along with reduction in GST rates for BSVI vehicles from 28% to 18%.
  • Federation of Indian Chambers of Commerce & Industry (FICCI)
The body FICCI wants more share of money to be given for PM-Kisan and MNREGA to spur the rural demand. The demand for better labour reforms and schemes to boost export sector has been made. The body suggests Asset quality review of NBFCs to help sustaining well-functioning financial institutions and allow the unwell ones to cease, if necessary.
  • Confederation of Indian Industry (CII)
CII weighs that public spending on agri-infrastructure must be stepped up, especially on irrigation, seeds, cold storage. Also, body expects increase in the budgetary provision for strengthening the National Agriculture Market (e-NAM). Provisions to promote Farmer Producer Organizations (FPOs), leverage remote sensing technology for efficient production planning, and encourage agri-exports by identifying potential products are also in the bucket-list of the organisation.

The present government has taken several steps to revive the economy, since last budget, signifying that India has far too dynamic economy for all the important decisions to be taken on a single day. The major steps include Corporation tax cut at valuation of 1.45 lakh crores and infusing 102 lakh crores in the infrastructure pipeline. The nation witnessed the merger of 10 PSB (Public Sector Banks) as well as the stake sale in 5 public sector companies, BPCL, Concor, Shipping Corporation at 85K crores.  
Whether this budget be able to please the expectations on personal and national front, we don’t know! Meanwhile, let’s wait what this budget has in store for all of us. Let’s wait for surprises coming straight from Mrs. Sitharaman’s briefcase tomorrow i.e. 1st February, 2020.

- Written by Prateek Bansal

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Union Budget 2020: What Changes Can We Expect? Union Budget 2020: What Changes Can We Expect? Reviewed by EMN on February 01, 2020 Rating: 5

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