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India Union Budget 2019-20

India Union Budget 2019-20

Insights on the most critical issues and key changes.

Insights on the most critical issues and key changes.

With the Modi government coming into power with an overwhelming majority, the nation expected a public-friendly and pro-growth Union Budget 2019. India’s first full-time lady Finance Minister presented the second term full-fledged Union Budget 2019 and aimed to boost infrastructure and foreign investment against the backdrop of a slowing economy, weak consumption demand, rural distress, high unemployment, and lack of private investment. The Union Budget 2019 aims to change gears and put India on a fast forward mode to spur growth and development.

The world economy is slowing down with anti-globalisation sentiment, protectionism, nativism and trade wars. India continues to take giant strides forward and has also managed to become the sixth largest economy by sustaining growth rates higher than China, and also one of the fastest growing economy in the world.

The Economic Survey 2018-19, imbued with the ‘blue sky thinking’ approach, forecasts a positive GDP growth rate of 7 per cent for FY19-20 while expecting general fiscal deficit to be at 5.8 per cent. The Survey also opined that India should accelerate and sustain a real GDP growth rate of 8 per cent to become a USD 5 trillion economy by 2025.

The public sector banks are now proposed to be provided INR70,000 crore capital to boost credit for a strong impetus to the economy. In order to harness the prowess of India as a more attractive FDI destination, the government will invite suggestions for further opening up of FDI in aviation, media, and animation and insurance sectors in consultation with all stakeholders. 100 per cent FDI will be permitted for insurance intermediaries.

The Union Budget 2019 has also laid emphasis on closure of existing litigation. To liquidate past disputes under Central Excise, Service tax and Cesses “Legacy Dispute Resolution Scheme” is proposed which grants waiver from 40 per cent to 70 per cent of the disputed tax amount. Further, this scheme provides relief from payment of interest, penalty and protection from prosecution.

The budget provisions aim to balance priority and give directions to the economy. However, the proof of the pudding would be in the action that the government actually takes to ensure implementation such that people’s expectations and India’s objective of more inclusive growth is met.

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