Fiscal deficit target set for the Budget 2019 in all probability will be breached and to curb further increase in it, government has announced a cut in its expenditure by as much as Rs. 2 lakh crore across sectors. And while the budget 2020 slated to be announced on February 1, 2020 shall be challenging for the finance ministry, a much needed impetus is expected from it to push up the crawling economy.
In the first ever advanced estimate results for GDP, the government on January 7, 2020 estimates it to be at 5% for the FY20.
So, here are 5 must knows about the budget 2020 before it is finally unveiled:
When shall the Budget 2020 announced?
It shall be presented on the first working day of February i.e. it shall be presented on February 1, 2020 despite it being a Saturday. And the economic survey will be released on January 31. The earlier practice of announcing the budget on the last day was changed by Narendra Modi led BJP government when it first came to power and the idea behind was to complete all the budgetary process by March 31 of the year as then expenditure exercise for 12 months can be begun from April 1.
Why this should be a customer or taxpayer friendly budget?
Different industries in the slowdown have seen a fall in consumption which has been on the aggressive side from rural population. Also the private consumption has seen a sharp fall and this may be due to several factors such as slow increase in income, fewer jobs as well as decrease in credit on the back on NBFC crisis.
And to mitigate the only visible solution can be to increase the purchasing power of consumers by providing a cut back in personal income tax rates. But from the cut, there remains a catch as consumers citing uncertain times may be prompted to save and not actually spend.
Nonetheless, in the last few months there has been seen an increase of income in the hands of rural population because of a spike in various essentials including milk and vegetables such as potato, onion, garlic etc.
Steps taken so far to push the ailing economy
The Nirmala Sitharaman headed finance ministry just days after presenting the maiden budget took steps which are listed below:
1. Corporate tax cut from 30% to 22%
2. Cut in corporate tax for new manufacturing concerns , incorporated after October 1, 2019 and starting operations before March 31, 2023 to 15% from the earlier 25%
3. Rollback in surcharge announced on July 5 budget on FPIs
4. Surcharge on short and long term capital gain on account on transfer of equity shares was done away with
5. Angel tax withdrawn for start ups entities registered with the Department for Promotion of Industry and Internal Trade
6. The recent infrastructure push amounting in trillions
Different negatives that need to addressed
Unemployment status at its highest in 45 years
Consumer confidence at its lowest in 6 years
GDP that has dragged to 6 year low, for the first half of FY 2019-20, the GDP is 4.8% per annum