What is Union Budget?
According to Article 112 of the Indian Constitution, the Union Budget of a year, also referred to as the annual financial statement, is a statement of the estimated receipts and expenditure of the government for that particular year.
Theme 1: ASPIRATIONAL INDIA
• Budget is aimed at doubling farmer income by 2022 by: State governments to implement national laws such as Contract Farming, 2018, APMC, 2017 and Model Agriculture Land Leasing Act, 2016; Comprehensive measures to be undertaken for 100 water-stressed districts; Provide stand-alone solar pumps to around 20 lakh farmers; Over 15 lakh farmers with barren lands will be allowed to solarise their farms and Balanced use of fertilisers to transform current incentive regime
• “Aathichudi by Auvaiyar. Bhoomi Thiruthi Unn”: It means to take care of your own land first
• Village Storage Scheme run by self-help groups: Women self-help groups can now get help from NABARD or Mudra.
• ‘One product, one district’ in horticulture
• Integrated Farming Systems to be developed in rain-fed areas
• Budget fixes the target of Agricultural Credit at Rs 15 lakh crore.
• MNREGA will be merged for creating fodder farms.
• Indian Railways to set up “Kisan Rail” so that farm goods can be quickly transported. It will also be used for cold storage of goods through PPP model.
• Ministry of Civil Aviation will launch Krishi UDAN on international and national routes.
Wellness, Water and Sanitation
• Budget talks about the “Fit India Movement” in the context of India’s fight against the NCDs – non-communicable diseases.
• Budget seeks to set up hospitals in Indian Tier-II and Tier-III cities under the PPP model.
• Budget allocates Rs 69,000 crore for the Health sector
• Foreign direct investment, FDI and External Commercial Borrowings (ECB) in education.
• Urban Local Bodies have been asked to provide internship opportunities for freshers and engineers for a period of one year.
• A degree level online education programme will be launched to provide quality education to deprived sections students.
• INDSAT exam will be conducted in Asian and African countries under the Study in India programme.
• Budget proposes to set up “National Police University” and “National Forensic Science University”.
• Budget proposes to attach a Medical College to every existing district hospitals under the PPP model.
• The Budget allocates Rs 99,300 crore for the Education sector and Rs 3000 crore for Skill development.
Theme 2: ECONOMIC DEVELOPMENT
• Union Budget 2020 proposes to set up an “Investment Clearance Cell” to offer services such as to be set free investment advisory, land banks and others. An online portal will be launched in this regard.
• National Technical Textiles Mission proposed.
• New scheme “NIRVIK” announced for fewer duties and taxes on exported products.
• Budget proposes to make each district an export hub.
• National Infrastructure Pipeline to offer employment opportunity
• Government to form a National Logistics Policy soon
• It proposes to build the Chennai-Bengaluru Expressway
• A large solar power capacity proposed for the Indian Railways. It will be built along the rail track on the Railways owned lands.
• Bengaluru Suburban Rail Project proposed; budget allocates Rs 18,600 crore for this project
• By 2024, the Government would monetize 12 lots of national highways
• With the help of UDAN scheme, 100 airports will be built by 2024
• Rs 1.7 lakh crore allocated for transport infrastructure
• Prepaid Smart Meters: States will have to replace existing energy meters with the prepaid smart meters.
• Budget allocates Rs 22,000 crore for the Power and Renewable Energy Sector.
• A new policy will be launched for the construction of data centre parks by the private sector.
• Bharat Net to link 1 lakh gram panchayats through Fibre to Home connections
• Budget allocates Rs 6000 crore for the Bharat Net programme
• It provides Rs.8,000 crore in the next 5 years for “National Mission on Quantum Technology and Applications”.
Theme 3: A CARING SOCIETY
• ‘Beti Bachao, Beti Padhao’: Enrollment of girls in schools is higher than the boys.
• Task Force will be constituted to look into the issue of girls of low age entering motherhood
• It allocates Rs 85,000 crore for development of SCs and OBCs
• It allocates Rs 53,700 crore for STs development
• It allocates Rs 9,000 crore for Senior citizens and persons with disabilities
Art & Culture
• The government will constitute “Indian Institute of Heritage and Conservation” as a deemed university.
• 5 archaeological sites to be developed as top-notch sites; these sites are
- Rakhigarhi, Haryana
- Hastinapur, Uttar Pradesh
- Sivasagar, Assam
- Dholavira, Gujarat
- Adichanallur, Tamil Nadu
• The government will build a Tribal Museum in Ranchi.
• The Coalition for Disaster Resilient Infrastructure will be implemented from January 2021.
• It allocates Rs 4,400 crore to promote clean air in cities with a population of over 1 million people.
• To avoid the case of citizen harassment, a taxpayer charter will be enshrined in the statutes.
• For recruitment in non-gazetted posts in banks, National Recruitment Agency will be constituted for both government and public sector banks.
• It proposes the creation of the New National Policy on Official Statistics.
• Deposit insurance cover has increased tremendously from Rs 1 lakh to Rs 5 lakh.
• Disinvestment in Banks: Government’s share in IDBI Bank will be sold to the private sector.
MSME & Corporate Sector
• The budget proposes a new scheme for MSMEs in the context of subordinate debt.
• The debt recast window of MSME is extended by one year to March 31, 2021.
• Certain categories of government securities will now be opened for Non-Resident Investors.
• The FPI Limit in Corporate bond has increased to 15%.
Strategic Disinvestment & Privatization
Finance Minister Sitharaman proposes to sell the Government’s stake in the Life Insurance Corporation of India (LIC). For this purpose, the LIC IPO will be launched.
Note: Budget calls for the overhaul of certain centrally sponsored schemes which includes central government debt which is not a part of market borrowings, however, is used for funding expenditure.
Terms Related to Union Budget:
Annual Financial Statement : It encompasses the receipt and expenditure of the Indian government. The information on the Consolidated Fund of India, Contingency Fund of India and Public Accounts is provided.
Revenue – Receipt & Expenditure
- The receipts received which cannot be recovered by the government.
- It comprises income amassed by the Government through taxes and non-tax sources like interest, dividends on investments.
- Expenditure incurred by the Union Government for purposes other than for the creation of physical or financial assets.
- It includes those expenditures incurred for the usual functioning of the government departments, grants given to state governments and interest payments on the debt of the Union Government etc.
Capital – Receipt & Expenditure
- Receipts which generate liability or decrease the financial assets of the government.
- It includes borrowings from the Reserve Bank of India and commercial banks and other financial institutions.
- It also consists of loans received from foreign governments and international organization and repayment of loans granted by the Union government.
- Spending incurred by the government which results in the formation of physical or financial possessions of the Union government or decrease in financial liabilities of the Union Government.
- It contains expenditure on procuring land, equipment, infrastructure, expenditure in shares.
- It also includes mortgages by the Union government to Public Sector Undertakings, state and union territories.