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The good and the bad of the Union Budget 2019

Iqbal Khan
Finance Minister Nirmala Sitharaman.
Finance Minister Nirmala Sitharaman

Finance Minister Nirmala Sitharaman presented her maiden Budget for 2019-20 on July 5, and it mostly got a thumbs up from the common man, the industry, and the markets.

For the most part, the Budget was rated as ‘good’. However, there are a few parts of the Budget that we do think are ‘bad’.

Here’s a breakdown of the ‘good’ and the ‘bad’ of the Union Budget 2019:

THE GOOD

  • Finance Minister Nirmala Sitharaman proposed to make Pan Card and Aadhaar card interchangeable to file tax returns.

  • Import of defence equipment exempted from basic customs duty

  • Every single household to have electricity by 2022

  • Additional Rs 1.50 lakh deduction on affordable housing loans

  • Corporate tax of 25 per cent for all companies with over Rs 400 crore turnover

  • Angel tax scrutiny norms to be relaxed for startups

  • Rs 100 lakh crore to be set aside for infrastructure over five years

  • An expert committee to recommend the structure of financing

  • NPAs reduced by over Rs 1 lakh crore in the past 4 years

  • Rs 70,000 crore capital to be infused in PSU Banks

  • Governments to focus on introducing women-led initiatives

  • New entrepreneurial scheme to support women self-help groups

  • To provide NRIs seamless access to Indian equity markets

  • NRI portfolio investment route to be merged with foreign portfolio investment route

  • A National Research Foundation to be set up to promote R&D operations

  • National Education Policy to soon transform India’s higher education system to global standards

  • Rs 80,250 crore dedicated to building 125,00 km of roads in the next 5 years
    Buyers will be incentivised on purchase of electric vehicles and government will offer a tax deduction of Rs 1.50 lakh on EV loan interest, and no custom duty on auto parts of EVs. Also, GST Council has been moved to cut rate for EVs To 5% from 12%.

  • One nation, one card: This transport card, which runs on RuPay card, will let people pay for metro services, bus travel, toll taxes, parking charges, retail shopping, etc. It can also help them withdraw money.

  • NRIs to get Aadhar on arrival and they will not have to wait for 180 days.

  • A nominal basic excise duty imposed on tobacco

  • Lower 25 percent corporate tax will apply on companies with up to Rs 400 crore turnover, covering 99.3 percent of corporate India

  • Simplified return form for GST registered businesses in the offing

  • Customs duty exempted on components of specified electronic goods

  • Govt to streamline multiple labour laws into a set of four labour codes

  • To focus on training new age skills like AI, robotics, 3D printing

  • ​To liberalise FDI in aviation, media, animation and insurance intermediaries

  • To initiate steps for electronic fund raising programme for listing of social enterprises, voluntary organisations

  • Expert committee to be set up to make recommendations on infrastructure finance

  • Govt to invest widely in agriculture infrastructure

  • Support private entrepreneurship in value addition in agriculture

  • Proposes Pradhan Mantri Matsya Sampada Yojana to address critical infrastructure gap in fisheries sector

  • ​Time right for India to enter into aircraft financing and leasing

  • To harness India's space ability commercially, New Space India has been incorporated to tap the benefits of ISRO

  • Will re-initiate privatisation of Air India

  • ​Package for power sector tariff and structural reforms to be unveiled soon

  • ​NPS Trust will be separated from Pension Fund Regulatory and Development Authority

  • PAN and Aadhaar made interchangeable, allowing those who do not have PAN to file return

  • Pre-filled tax returns to contain information from salaries, bank interest, capital gain and dividend income to be made available

  • Surcharge on individuals having taxable income of Rs 2 crore to Rs 5 crore, and Rs 5 crore and more raised

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THE BAD

  • Basic customs duty on auto parts, optical fibres, digital camera, cashew, certain synthetic rubber, vinyl flooring hiked.

  • Enhanced surcharge on taxable income of Rs 2-5 crore

  • No increase in defence budget allocation for modernisation

  • Railway requires at least Rs 50 lakh crore investment for modernisation

  • Customs duty on certain parts of electric vehicles removed

  • Cess on petrol, diesel raised by Re 1 per litre; customs duty on gold raised to 12.5 percent from 10 percent

  • The government may raise minimum public shareholding in the listed firms to 35% from 25% at present. This could lead to many MNCs delisting.

  • Standard deduction and TDS threshold was overlooked in the Budget.