Budget 2020: Nirmala Sitharaman introduced 2020-21 Budget

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Budget 2020, Nirmala Sitharaman presented the budget for the year 2020-2021: Finance Minister Nirmala Sitharamn, on Saturday, introduced the budget for the financial year 2020-21. The finance minister says the budget will provide a boost to India’s economy.

Details Budget 2020: Presented by Nirmala Sitharaman

Transport Infrastructure:

Rs 1.7 trillion proposed. In the 2019-2020 budget of Rs. 157000 crore had been allotted. The budget indicates investment in roads, railways, shipping, ports and civil aviation. The budget has risen by 8% from that of the previous year. The Finance Minister said that the Government wants to encourage the National Highway Authority of India, to commercialize the highways further, to raise finance. The Finance Minister proposed the sale of 6000 km of public roads before 2024. The government says it has pledged to build 9000 km of economic corridors and 2000 km of strategic highways. The government will also take up the Mumbai-Ahmedabad high-speed rail project.

Farm and Rural Sectors:

The farm sector has been allocated Rs 2.83 trillion, and the agricultural target credit for the next year is set at Rs 15 trillion. The government allocated Rs 122000 crore – a bit of an increase from the Rs 119000 crore allocated in the previous financial year.

Water: 

Piped water to reach Indian households by 2024 with Rs 3.6 trillion in funding. Nirmala Sitharam announced that the government is to identify 100 water-stressed districts and take measures. This announcement comes when the country is facing a major water shortage. The most water-stressed blocks have been identified in the states of Tamil Nadu(541), Rajasthan(218), Uttar Pradesh(139) and Telangana(137). The focus will be on rainwater harvesting and water conservation, as planned under Jal Shakti Abhiyan. Other attempts that the government plans to undertake, include the renovation of traditional water bodies and tanks, reuse of water and recharge structures, watershed development and intensive afforestation. 

Telcom sector:

Rs. 60 billion for the Bharat Net project in the next financial year. The telecom industry that is facing problems, is expecting the government to come up with measures for the revival. The industry expects the Centre to announce steps to expedite the tax litigation process. The telecom industry has also demanded a reduction in levies, both license fees, and Spectrum Usage Charges (SUC). Government data shows Bharti Airtel’s liabilities stand at Rs 35,586 crore, of which Rs 21,682 crore is license fee and another Rs 13,904.01 crore is the SUC dues. Vodafone Idea’s total dues amount to Rs 53,038 crore, including Rs 24,729 crore of SUC dues and Rs 28,309 crore in the license fee. 

IT Firms: 

The private sector is to be allowed to build data centre parks. The move could potentially benefit all IT firms, including, TCS, Wipro, HCL Technologies, Tech Mahindra. The government also said that the data centre parks would be built keeping in mind the usage of analytics and the internet of things among industries. Several large firms, such as Reliance Industries and Adnani Group, have already announced plans for investments to set up IT parks in different parts of the countries.

Gas Pipeline: 

National gas grid expansion to 27,000 kilometres from 16,200 kilometres. Currently, around 7000 km of the pipeline is under construction. The city gas distribution projects are to also add several thousand more kilometres of steel pipeline. The government aims to achieve reduction targets of the greenhouse gases taken at the twenty-first session of the Conference of Parties(COP) in Paris. India’s share of natural gas is 6.2% against 23.4% globally. The country aims to increase it to 15% over the next decade.

Insurance: 

The government plans to sell a part stake in LIC. The share prices in companies like HDFC Life Insurance, SBI Life Insurance, and ICICI Life Prudential Life Insurance were down 9-10% as the budget didn’t offer tax exemption for insurance policies. At 1328 hours, HDFC Life Insurance Company was quoting at Rs 570.55, down Rs 28.55, or 4.77 percent. SBI Life Insurance Company was trading at Rs 909.25, down 8.5 percent. ICICI Prudential Life Insurance Company slipped 9.87 percent at Rs 460.50 and ICICI Lombard General Insurance Company was down 2.36 percent at Rs 1,287.45.

State-Run Banks: 

No announcement about infusing new capital into state-run banks for 2020-21. Union Finance Minister Nirmala Sitharam, in her budget speech 2020 has proposed to hike the bank deposit insurance in scheduled commercial banks to Rs 5 lakh per depositor from the current Rs 1 lakh. DICGC covers all deposits such as savings, fixed, current, recurring and so on except for the following deposits:

  • Deposits of foreign governments;
  • Deposits of Central/State Governments;
  • Inter-bank deposits;
  • Deposits of the State Land Development Banks with the State co-operative bank;
  • Any amount due on account of and deposit received outside India
  • Any amount, which has been specifically exempted by the corporation with the previous approval of Reserve Bank of India. 

Currently, the insurance cover offered by the DICGC covers all different accounts of one depositor held with different branches of the same bank for a maximum of Rs 1 lakh. Therefore, if you have more than one account with the same bank (even if in different branches), then, too, you will be insured for Rs 1 lakh only. As per the RBI, both single and joint accounts will be separately covered under the DICGC scheme.

Real Estate:

No new measures have been announced by the Government in this field.

This was all Details on Budget 2020, Presented by Nirmala Sitharaman.

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