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Budget 2019: India on course to be $5-trillion economy

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By Sanjiv Singh

The Budget 2019 has kick-started the process of ushering in radical changes in various sectors, to make India a pollution-free, healthy and self-sufficient country as it charts its way to realise the aspiration of becoming a $5-trillion economy in the near future. The fiscal deficit in FY 19 has been pegged at 3.3% of the GDP.

The Budget is a reflection of the government’s plans to encourage India Inc to be a job-creator and wealth–creator, which is depicted in its emphasis on investment in infrastructure and digital economy.

A massive push has been given to all forms of physical connectivity through Pradhan Mantri Gram Sadak Yojana, industrial corridors, dedicated freight corridors, Bharatmala and Sagarmala projects, including Jal Marg Vikas and UDAN schemes, which will boost business activity, resulting in ease of living.

The above plans would yield rich dividends, considering the announcement of various measures to enhance sources of capital and infrastructure financing, including measures to deepen the bond markets, thus making capital easily available. Further, plans are afoot to make India a more attractive FDI destination leading to more capital inflows, especially in aviation, media, animation and insurance.

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The government’s resolve to enhance rural development as well as its determination to face the challenge of urbanisation is broadly reflected in its continued thrust on electricity and clean cooking fuels to all willing rural families by the year 2022. ‘Housing for All by 2022’ under the Pradhan Mantri Awas Yojana–Gramin (PMAY-G) and over 81 lakh houses with an investment of `4.83 lakh crore in PMAY–Urban, will fuel the overall economy. The Jal Jeevan mission to provide piped water supply to all rural households is a right step towards the country’s water security.

Measures outlined for MSMEs as well as the proposed roadmap in aviation will spur growth in the respective sectors. Plans to undertake labour reforms is a welcome sign for the industry. Sops to the housing sector, start-ups and electric vehicles, with reduction in corporate tax, is also likely to boost growth. The incentives for electric vehicles would promote adoption of electric mobility and contribute to a cleaner environment.

This will complement the efforts of Oil Marketing Companies (OMCs) who have planned BS-VI fuels rollout pan-India from 1st April, 2020. As regards the oil & gas sector, in view of the benign crude oil prices, there is an increase of `1 each in ‘Special Additional Excise Duty’ and ‘Road and Infrastructure Cess’ for both petrol and diesel. There is no change in taxes and duties for the rest of the products.

There was no mention regarding the inclusion of Petrol/Diesel/ATF under the ambit of GST, which, in any case, is to be considered by the GST Council separately. Further, upgradation of 1,25,000 kilometres of roads at a cost of `80,250 crore over the next five years would boost the demand for bitumen. Further, led by IOC, the three OMCs would continue the implementation of the scheme of LPG connectivity to households as targeted in the Budget.

(The author is Chairman, Indian Oil)