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In the wake of recent slowdown in the economy and the existing challenges, the Hon’ble Finance Minister Nirmala Sitharaman has endeavored to steer the economy through slew of expenditure plans and investment schemes. Riding over the three themes of the budget viz., Aspirational India, Economic Development and Caring Society, the Hon’ble Minister has allocated funds and proposed new schemes in various sectors particularly for the agriculture, healthcare and infrastructure.
With billions of dollars on expenditure offerings, the Government expects that the economy will grow up to 6.5% in the next fiscal year and hopes to follow China's example in developing labor-intensive industries and exports. Accordingly, it has focused on generation of employment and inclusive growth through increased expenditure on rural economy, infrastructure, digital governance, MSME and healthcare.
Further, abolition of DDT, tax relief to middle class and lower middle-class segments along with simplification of the tax regime appears to be a sincere effort on part of the Government to provide the necessary impetus to improve the public sentiment and augur well for the economy.
Moreover, the proposed easing of tax payments for startups with a view to promote growth of budding entrepreneurs ‘by deferring the tax payment by five years or till they leave the company or when they sell, whichever is earliest’ would potentially encourage and promote the startups ecosystem in the country.
It goes without saying that the Government intends to make-up the short fall arising due to the aforesaid expenditures through various divestment plans including the listing of LIC, the Vivaad se Vishwas amnesty Scheme under the Income tax, and increase in Custom duties on various products etc.
Overall, the Government looks rich on intent and have been able to identify the sufficient strategic points to accelerate the growth. The same is evident in view of the extended support to MSME Sector by providing adequate Credit facility, investments in road and infrastructure construction activity. However, we will have to wait and analyze the real impact of the proposed measures in coming months. Even though the markets have fallen nearly 1000 points in the immediate aftermath of the Budget 2020, it is expected that matching with the Government’s intent, the measures would deliver results on expected lines
Attached herewith is a Budget booklet providing meaningful insights into the key amendments proposed in Union Budget for FY 2020-21.
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