Speech of Piyush Goyal, Minister of Finance
1. I am deeply conscious of the absence of Shri Arun Jaitley today.
I am sure the House joins me in wishing Shri Jaitley speedy recovery, good
health and a long life in the service of the nation.
2. Madam Speaker, the people of India gave a strong mandate to our
Government. Under the visionary leadership of Hon’ble Prime Minister Shri
Narendra Modi, we have given the most decisive, stable and clean
Government and have undertaken transformational structural reforms. We
have reversed the policy paralysis engulfing the nation and have restored the
image of the country. The major achievement of this Government was that we
strived our utmost to change the mind-set and ignited the self-confidence of
3. I can proudly say that India is solidly back on track and marching
towards growth and prosperity. We have prepared the foundation for
sustainable growth, progress and better quality of life for all our people.
4. We are moving towards realising a ‘New India’ by 2022, when we
celebrate 75 years of India’s independence: an India which is clean and
healthy, where everybody would have a house with universal access to
toilets, water and electricity; where farmers’ income would have doubled;
youth and women would get ample opportunities to fulfil their dreams;
an India free from terrorism, communalism, casteism, corruption and
2. State of the Economy
5. Madam Speaker, the last five years have seen India being
universally recognised as a bright spot of the global economy. The country
witnessed its best phase of macro-economic stability during this period.
We are the fastest growing major economy in the world with an annual
average GDP growth during last five years higher than the growth achieved by
any Government since economic reforms began in 1991. From being the
11th largest economy in the world in 2013-14, we are today the 6th
largest in the world. Besides generating high growth rate, we contained
double-digit inflation and restored fiscal balance.
6. Inflation is a hidden and unfair tax on the poor and the middle
class. The average rate of inflation during 2009-2014 was a backbreaking
10.1%. The then Prime Minister admitted as much when he said, “We
have also not been as successful in controlling persistent inflation as we
would have wished. This is primarily because food inflation has increased.”
In contrast, our Govt. broke the back of back-breaking inflation. We brought
down average inflation to 4.6% which is lower than the inflation during
the tenure of any other Government. In fact inflation in December 2018
was down to 2.19% only. If we had not controlled inflation, our families
would have been spending around 35-40% more today on basic
necessities such as food, travel, consumer durables, housing etc.
7. From the high of almost 6% seven years ago, the fiscal deficit has
been brought down to 3.4% in 2018-19 RE. The current account deficit
(CAD), against a high of 5.6% six years ago, is likely to be only 2.5% of
GDP this year. We contained the fiscal deficit notwithstanding the Finance
Commission’s recommendations increasing the share of the States from
32% to 42% in central taxes, which we accepted in the true spirit of
cooperative federalism, thereby transferring significantly higher amounts to
8. Due to a stable and predictable regulatory regime, growing
economy and strong fundamentals, India could attract massive amount of
Foreign Direct Investment (FDI) during the last 5 years – as much as $239
billion. This period also witnessed a rapid liberalisation of the FDI policy,
allowing most FDI to come through the automatic route.
9. Madam Speaker, the last five years have witnessed a wave of next
generation structural reforms, which have set the stage for decades of
high growth. We have undertaken path breaking structural reforms by
introducing Goods and Services Tax (GST) and other taxation reforms.
Banking Reforms and Insolvency and Bankruptcy Code (IBC)
10. The period of 2008-14 will be remembered as a period of
aggressive credit growth and, as per RBI, the primary reason for spurt in
non-performing loans and stressed assets. Outstanding loans of public
sector banks ballooned from ` 18 lakh crore to ` 52 lakh crore during this
period. Many projects were started that could either not be completed or
had low capacity utilisation resulting in their inability to pay back their
loans. There were high stressed and non-performing assets (NPAs)
amounting to ` 5.4 lakh crore in 2014. Many more were hidden through
restructuring or otherwise which were discovered during Asset Quality
Reviews and inspections carried out since 2015.
11. We put a stop to such questionable practices and stopped the
culture of “phone banking”. The 4Rs approach of recognition, resolution,
re-capitalisation and reforms has been followed. A number of measures
have been implemented to ensure Clean Banking. Through a transparent
and accountable process, we recognised these NPAs. The Insolvency and
Bankruptcy Code has institutionalised a resolution-friendly mechanism,
which is helping in recovery of non-performing loans while preserving the
underlying businesses and jobs. Earlier, only small businessmen used to be
under pressure of repayment of loans while in the case of big businessmen, it
was the headache of banks. But now, defaulting managements are either
paying or exiting their businesses. An amount of close to ` 3 lakh crore
has already been recovered in favour of banks and creditors. To restore
the health of public sector banks, recapitalisation has been done with an
investment of ` 2.6 lakh crore. Amalgamation of banks has also been done
to reap the benefits of economies of scale, improved access to capital and
to cover a larger geographical spread.
Steps against corruption
12. We have ushered in a new era of transparency. We have given a
corruption free government. The Real Estate (Regulation and Development)
Act, 2016 (RERA) and Benami Transaction (Prohibition) Act, 1988 are
helping to bring transparency in the real estate sector. The Fugitive
Economic Offenders Act, 2018 will help confiscate and dispose off the
assets of economic offenders who escape the jurisdiction of the laws in
India. Additionally, we conducted transparent auction of natural resources
including coal and spectrum. We have walked the talk.
13. As a tribute to Mahatma Gandhi’s 150th birth anniversary in 2019,
our Government initiated the world’s largest behavioural change
movement with the Swachh Bharat Mission. India has achieved 98% rural
sanitation coverage and as many as 5.45 lakh villages have been declared
“Open Defecation Free.” It is a holistic programme and has succeeded in
changing the mindset of our people. With the people participation, they
transformed it from a Government Scheme to a national movement. I thank
the 130 core people of the nation for the success of Swacch Bharat Abhiyan
who adopted it whole heartedly.
Poor and backward classes
14. The poor have the first right on the resources of the nation. The
Government while maintaining the existing reservation for SC/ST/Other
Backward Classes, have now ensured 10% reservation in educational
institutions and Government services for poors. In these institutions, around
25% extra seats (approximately 2 lakh) will be provided so that, there is no
shortfall of presently available/reserved seats for any class.
15. To provide food grains at affordable prices to the poor and middle
classes, about `1,70,000 crores were spent in the year 2018-19 which is almost
double the amount of ` 92,000 crores spent in the year 2013-14. We ensured
that everyone gets food and none goes to sleep hungry. `60,000 crores are
being allocated for MGNREGA in BE 2019-20. Additional amount would be
provided if required.
16. We have worked to bridge the urban-rural divide in the country.
Hon’ble Members in this August House, most of whom are from rural
areas, will agree that several times in the past, only empty promises have
been made to people living in our villages. During the last five years, we
have undertaken targeted expenditure to improve their quality of life in
all its dimensions. Our aim, is to provide urban facilities in villages while
keeping the soul of rural life intact.
17. Under the Pradhan Mantri Gram Sadak Yojana, construction of
rural roads has been tripled. 15.80 lakh habitations out of a total of 17.84
lakh habitations have already been connected with pucca roads and work
is going on to complete the rest very soon. Pradhan Mantri Gram Sadak
Yojana (PMGSY) is being allocated ` 19,000 crore in BE 2019-20 as against
` 15,500 crore in RE 2018-19. There was time when a child used to reach
school after walking on a foot trail, today the situation has changed and a bus
can reach her/his village During the period 2014-18, a total number of 1.53
crore houses have been built under the Pradhan Mantri Awas Yojana.
18. Till the year 2014, about 2.5 crore families were forced to live the life of
18th centuary without electricity. Under ‘Saubhagya Yojna’, we provided free
electricity connection to almost every household. By March, 2019, all willing
families will get electricity connection. In mission mode, we have provided 143
crore LED bulbs with the participation of private sector. This has resulted into a
savings of approximately ` 50,000 crore per year in electricity bills of poor and
middle class families.
19. Madam Speaker, past five years have seen massive scale up of
health care. Earlier, a poor man used to be in dilemma whether to fulfil daily
needs of the family or save the life of an ailing member. This situation has
deeply pained our Hon’ble Prime Minister. We launched the world’s largest
healthcare programme, Ayushman Bharat, to provide medical treatment to
nearly 50 crore people. Already close to 10 lakh patients have benefited
for medical treatment which would have cost them ` 3,000 crore through
free treatment made available under the scheme. Lakhs of poor and middle
class people are also benefiting from reduction in the prices of essential
medicines, cardiac stents and knee implants, and availability of medicines
at affordable prices through Pradhan Mantri Jan Aushadhi Kendras.
20. There are 21 AIIMS operating or being established in the country
presently. 14 of these 21 AIIIMS have been announced since 2014. I am
happy to announce setting up of new the 22nd AIIMS in Haryana.
21. The Aspirational Districts Programme is providing targeted
development to the 115 most backward districts of the country. The
programme has achieved notable results with improved performance on
all indicators – health and nutrition, education, agriculture and water
resources, financial inclusion and skill development.
Farmer’s progress and Increase in Income
22. Madam Speaker, our hard working farmers were not getting the full
value of their produce. With an aim to double the income of farmers, our
Government, for the first time in history has fixed the minimum support price
(MSP) of all 22 crops at minimum 50% more than the cost.
23. Agriculture continues to be the main driver of the rural economy.
Our hard-working farmers, supported by pro-farmer policies of our
Government in the past four and half years, have produced agriculture
commodities in record quantities. Declining prices of agricultural
commodities in the international market and fall in food inflation in India
since 2017-18, relative to non-food sector, have however, reduced the
returns from farming. Small and fragmented land holding on account of
repeated divisions has also contributed in decline in the income of the
farmer family. Hence, there is a need for providing structured income
support to the poor land-holder farmer families in the country for
procuring inputs such as seeds, fertilizers, equipment, labour etc. and to
meet other needs. Such support will help them in avoiding indebtedness
as well and falling into clutches of money lenders.
24. To provide an assured income support to the small and marginal
farmers, our Government is launching a historic programme namely
“Pradhan Mantri KIsan SAmman Nidhi (PM-KISAN)”. Under this
programme, vulnerable landholding farmer families, having cultivable land
upto 2 hectares, will be provided direct income support at the rate of
`6,000 per year. This income support will be transferred directly into the
bank accounts of beneficiary farmers, in three equal instalments of ` 2,000
each. This programme will be funded by Government of India. Around 12
crore small and marginal farmer families are expected to benefit from
this. The programme would be made effective from 1st December 2018
and the first instalment for the period upto 31st March 2019 would be
paid during this year itself. This programme will entail an annual
expenditure of ` 75,000 crore.
25. PM-KISAN would not only provide assured supplemental income to
the most vulnerable farmer families, but would also meet their emergent
needs especially before the harvest season. PM-KISAN would pave the
way for the farmers to earn and live a respectable living.
26. I propose an outlay of ` 75,000 crore for PM-KISAN for the
FY 2019-20. I am also providing ` 20,000 crore in the Revised Estimates of
27. During the last five years, for providing affordable loans to farmers, the
amount of interest subvention has been doubled. The crop loan to farmers
increased to ` 11.68 lakh crore in year 2018-19. We have made genuine efforts
to remove the hardships of farmers by providing them Soil Health Cards,
quality seeds, irrigation scheme and Neem Coated Urea to remove shortage of
28. Animal Husbandry and Fisheries sector also needs considerable
support. I have increased the allocation for Rashtriya Gokul Mission to `750
crore in the current year itself. I announce setting up of “Rashtriya Kamdhenu
Aayog” to upscale sustainable genetic up-gradation of cow resources and
to enhance production and productivity of cows. The Aayog will also look
after effective implementation of laws and welfare schemes for cows.
29. India is the second largest fish producing nation in the world
accounting for 6.3% of global production, registering an average annual
growth of more than 7% in recent years. The sector provides livelihood to
about 1.45 crore people at the primary level. To provide sustained and
focused attention towards development of this sector, our Government
has decided to create a separate Department of Fisheries.
30. In the last Budget, our Government announced the facility of
extension of Kisan Credit Card scheme (KCC) to Animal Husbandry and
Fisheries farmers. Now, I propose to provide the benefit of 2% interest
subvention to the farmers pursuing the activities of animal husbandry and
fisheries, who avail loan through Kisan Credit Card. Further, in case of
timely repayment of loan, they will also get an additional 3% interest
31. To ensure provision of easy and concessional credit and to bring all
farmers under KCC fold, our Government has decided to initiate a
comprehensive drive with a simplified application form.
32. When natural calamities strike, farmers are generally unable to
repay their crop loans. Presently, the crop loans are rescheduled for such
affected farmers and they get benefit of interest subvention of 2% only
for the first year of the rescheduled loan. Our Government has now
decided that all farmers affected by severe natural calamities, where
assistance is provided from National Disaster Relief Fund (NDRF), will be
provided the benefit of interest subvention of 2% and prompt repayment
incentive of 3% for the entire period of reschedulement of their loans.
Labour and Workers Dignity
33. Madam Speaker, our Government firmly believes that workmen and all
the people working in Government services should get benefit of the fast
growing economy. During the last five years India has witnessed industrial
34. High growth and formalistation of the economy has led to the
expansion of employment opportunities as shown in EPFO membership,
which has increased by nearly 2 crore in two years reflecting formalisation
of the economy and job creations.
35. After submission of the 7th Central Pay Commission Report, the
recommendations were implemented immediately. The New Pension Scheme
(NPS) has been liberalized. Keeping the contribution of the employee at 10%,
we have increased the Government contribution by 4% making it 14%.
Maximum ceiling of the bonus given to the labourers has been increased from
` 3,500 pm to ` 7,000 pm and the maximum ceiling of the pay has been
increased from ` 10,000 pm to ` 21,000 pm. The ceiling of payment of gratuity
has been enhanced from ` 10 lakhs to ` 20 lakhs. During the last five years the
minimum wages of labourers of the all categories have been increased by 42%,
which is the highest ever. The ceiling of ESI’s eligibility cover has been
increased from ` 15,000 pm to ` 21,000 pm. Minimum pension for every
labourer has been fixed at ` 1,000 per month. In the event of death of a
labourer during service, the amount to be paid by EPFO has been enhanced
from ` 2.5 lakh to ` 6 lakh. Under Anganwadi and Asha Yojana honorarium has
been enhanced by about 50% for all categories of workers.
36. Half of India’s GDP comes from the sweat and toil of 42 crore
workers in the unorganised sector working as street vendors, rickshaw
pullers, construction workers, rag pickers, agricultural workers, beedi
workers, handloom, leather and in numerous other similar occupations.
Domestic workers are also engaged in big numbers. We must provide them
comprehensive social security coverage for their old age. Therefore, in
addition to the health coverage provided under ‘Ayushman Bharat’ and
life & disability coverage provided under ‘Pradhan Mantri Jeevan Jyoti
Bima Yojana’ and ‘Pradhan Mantri Suraksha Bima Yojana’, our Government
proposes to launch a mega pension yojana namely ‘Pradhan Mantri
Shram-Yogi Maandhan’ for the unorganised sector workers with monthly
income upto ` 15,000. This pension yojana shall provide them an assured
monthly pension of ` 3,000 from the age of 60 years on a monthly
contribution of a small affordable amount during their working age. An
unorganised sector worker joining pension yojana at the age of 29 years
will have to contribute only ` 100 per month till the age of 60 years. A
worker joining the pension yojana at 18 years, will have to contribute as
little as ` 55 per month only. The Government will deposit equal matching
share in the pension account of the worker every month. It is expected
that at least 10 crore labourers and workers in the unorganised sector
will avail the benefit of ‘Pradhan Mantri Shram-Yogi Maandhan’ within
next five years making it one of the largest pension schemes of the
world. A sum of `500 crore has been allocated for the Scheme. Additional
funds will be provided as needed. The scheme will also be implemented from
the current year.
37. Our Government is committed to reach the most deprived citizens of
this country. To this end, the condition of the De-notified, Nomadic and Semi-
Nomadic communities merits special attention. These communities are hard to
reach, less visible, and therefore, frequently left out. The Nomadic and Semi-
Nomadic communities move from place to place in search of a livelihood. The
Renke Commission and the Idate Commission have done commendable work
to identify and list these communities. A Committee under NITI Aayog will be
set up to complete the task of identifying De-notified, Nomadic and Semi-
Nomadic communities not yet formally classified. Our Government will also set
up a Welfare Development Board under the Ministry of Social Justice and
Empowerment specifically for the purpose of implementing welfare and
development programmes for De-notified, Nomadic and Semi-Nomadic
communities. The Board shall ensure that special strategies are designed and
implemented to serve these hard-to-reach communities.
Women’s development to women led development
38. Madam Speaker, in our Election Manifesto, we had promised that
we will transform the quality of life of women in rural India by providing
cleaner fuel. For securing the health of every home-maker in rural areas
and to ensure that she does not have to shed tears for cooking food to
nourish her family, our Government embarked upon a programme to
deliver 8 crore free LPG connections under the Ujjwala Yojana. More than
6 crore connections have already been given and the remaining will get
free gas connections by next year. Ujjwala is a remarkable success story of
our Government programme, defined by a bold yet practical Vision of a
responsible and compassionate leadership.
39. More than 70% of the beneficiaries of Pradhan Mantri MUDRA
Yojana are women who are getting affordable and collateral-free loans to
start their own businesses. Amongst many measures, benefits of Maternity
leave of 26 weeks and Pradhan Mantri Matru Vandana Yojana for
pregnant women have provided financial support to women while
empowering them to participate in work.
Empowering Youth to fulfil their potential
40. India is amongst the most youthful nations in the world. Through
Pradhan Mantri Kaushal Vikas Yojana, over 1 crore youth are being
trained to help them earn a livelihood. We have harnessed through self-employment schemes including MUDRA, Start-up India and
Stand-up India. Under MUDRA Yojana 15.56 crore loans have been disbursed
amounting to `7,23,000 crore. The concept of employment is changing all over
the world, now the employment generation is not confined merely to
Government services or factories. With job seekers becoming job creators,
India has become the world’s second largest start-up hub. We are proud of
the hard work and innovative ideas of our youth.
41. In order to take the benefits of Artificial Intelligence and related
technologies to the people, a National Programme on ‘Artificial Intelligence’
has been envisaged by our Government. This would be catalysed by the
establishment of the National Centre on Artificial Intelligence as a hub along
with Centres of Excellence. Nine priority areas have been identified. A National
Artificial Intelligence portal will also be developed soon.
Empowering MSMEs and Traders
42. Government has undertaken many effective steps to strengthen MSME
sector, which provides employment to crores of people. Recently, a scheme of
sanctioning loans upto ` 1 crore in 59 minutes has been launched. GSTregistered
SME units will get 2% interest rebate on incremental loan of ` 1
Crore. The requirement of sourcing from SMEs by Government enterprises has
been increased to 25%. Of this, the material to the extent of at least 3% will be
sourced from women owned SMEs.
43. Government e-Marketplace (GeM), created by our Government two
years ago, has transformed public procurement by making it fully
transparent, inclusive and efficient. MSMEs have an opportunity to sell
their products through GeM. Transactions of over ` 17,500 crore have
taken place, resulting in average savings of 25-28%. The GeM platform is
now being extended to all CPSEs.
44. We have focussed on supporting domestic trade and services. Our
Government has recently assigned the subject of “promotion of internal
trade including retail trading and welfare of traders, and their employees”
to the Department of Industrial Policy and Promotion, which will now be
renamed as the Department for Promotion of Industries and Internal
Strengthening Defence and National Security
45. Madam Speaker, our soldiers protect our borders in tough
conditions. They are our pride and honour. We also respected their dignity.
In our Election Manifesto, we had promised to implement One Rank One
Pension (OROP). This was pending for the last 40 years and has been
resolved by us. The previous Governments announced it in three budgets
but sanctioned a mere ` 500 crore in 2014-15 Interim Budget; in contrast
we have already disbursed over ` 35,000 crore after implementing the
Scheme in its’ true spirit. The Government also announced substantial hike
in the Military Service Pay (MSP) of all service personnel and special
allowances given to Naval and Air Force personnel deployed in high risk
46. Our Defence Budget will be crossing ` 3,00,000 crore for the first time
in 2019-20. For securing our borders and to maintain preparedness of the
highest order, if necessary, additional funds would be provided.
Supporting Indians across the world
47. Today, all persons of Indian origin feel secure that their
motherland Bharat cares for them and at times of need will support
them. India’s transformation has inculcated a sense of pride and respect
for Indians and persons of Indian origin across the globe. We have taken
several initiatives to strengthen their connect with India, facilitate their
investment in India and ease their travel.
48. Infrastructure is the backbone of any nation’s development and
quality of life. Whether it is highways or railways or airways or even digi
ways, we have gone beyond incremental growth to attain transformative
49. Because of ‘UDAAN Scheme’, today an ordinary citizen is also travelling
by air. The number of operational airports has crossed 100 with the
commissioning of the Pakyong airport in Sikkim. Domestic passenger traffic
has doubled during the last five years leading to large number of jobs
being created also. Today, India is the fastest highway developer in the
world with 27 kms of highways built each day. Projects stuck for decades
like the Eastern Peripheral Highway around Delhi or the Bogibeel rail-cumroad
bridge in Assam and Arunachal Pradesh have been completed. The
flagship programme of Sagarmala along the coastal areas of the country
will develop ports for faster handling of import and export cargo. For the
first time, container freight movement has started on inland waterways
from Kolkata to Varanasi. Our Government will introduce container cargo
movement to the North East as well, by improving the navigation capacity
of the Brahmaputra river.
50. Indian Railways has experienced the safest year in its history. All
Unmanned Level Crossings on broad gauge network have been eliminated.
Introduction of the first indigenously developed and manufactured semi
high-speed “Vande Bharat Express” will give the Indian passengers world
class experience with speed, service and safety. This major leap in wholly
developed technology by our engineers will give an impetus to the Make
in India programme and create jobs. Capital support from the budget for
railways is proposed at ` 64,587 crore in 2019-20 (BE). The Railways’
overall capital expenditure programme is of ` 1,58,658 crore. The
Operating Ratio is expected to improve from 98.4% in 2017-18 to 96.2%
in 2018-19 (RE) and further to 95% in 2019-20 (BE).
51. India provided leadership to the global effort to address the
problem of climate change. Our commitment to promote renewable
energy is reflected in setting up the International Solar Alliance, the first
treaty based international inter-governmental organisation headquartered
in India. India’s installed solar generation capacity has grown over ten
times in last five years. This sector is now creating lakhs of new age
52. India’s import dependence on crude oil and natural gas has been a
source of big concern to our Government. While we have taken a large number
of measures to moderate the increasing demand through usage of bio fuel and
alternate technologies, urgent action is needed to increase hydrocarbon
production to reduce imports. A high level Inter-Ministerial Committee,
constituted by our Government, has made several specific recommendations,
including transforming the system of bidding for exploration, changing from
revenue sharing to exploration programme for Category II and III basins. The
Government is in the process of implementing these recommendations.
53. The people of North East have also received significant benefits of
infrastructure development. Arunachal Pradesh came on the air map
recently and Meghalaya, Tripura and Mizoram have come on India’s rail
map for the first time. Allocation for the North Eastern Areas is being
proposed to be increased by 21% to ` 58,166 crore in 2019-20 BE over
Digital India Revolution
54. Madam Speaker, India is now leading the world in the
consumption of mobile data. Monthly consumption of mobile data
increased by over 50 times in the last five years. The cost of data and
voice calls in India is now possibly the lowest in the world. Today, under
Make in India, mobile and parts manufacturing companies have increased
from 2 to more than 268 providing huge job opportunities. More than 3
lakh Common Service Centres (CSCs) employing about 12 lakh people, are
digitally delivering several services to the citizens. The Common Service
Centres are expanding their services and also creating digital infrastructure in
the villages, including connectivity, to convert the villages into Digital Villages.
The Government will make 1 lakh villages into Digital Villages over next five
55. Jan Dhan-Aadhaar-Mobile (JAM) and Direct Benefit Transfer have
been game changers. Bank nationalisation was first done 50 years ago,
but a large part of the country was still left out of the economic
mainstream with no access to formal banking. In the last five years,
nearly 34 crore Jan Dhan bank accounts were opened. Aadhaar is now
near universally implemented. This has helped ensure the poor and
middle class receive the benefits of Government schemes directly in their
bank accounts by eliminating middlemen.
56. Entertainment industry is a major employment generator. To
promote entertainment industry – Single window clearance for ease of
shooting films, available only to foreigners, is now going to be made
available to Indian filmmakers as well. Regulatory provisions will rely more
on self-declaration. We will also introduce anti-camcording provisions in
the Cinematograph Act to control the menace of piracy.
Simplification of Direct Tax System to benefit Tax-payers
57. Madam Speaker, for making the life of our direct tax-payers easy,
we reduced tax rates, more for the common man and middle class, and
made the interface with the tax department much simpler and largely
faceless. Due to this, the tax collections increased significantly from ` 6.38
Lakh crore in 2013-14 to almost ` 12 lakh crore this year. The number
of returns filed have also increased from 3.79 crore to 6.85 crore showing
80% growth in tax base. I thank the honest taxpayers of India for
reposing faith in our Government. Let me assure them that we have used
their contribution to serve the poor and create better infrastructure.
58. The Income Tax Department now functions online. Returns,
assessments, refunds and queries are all undertaken online. Last year,
99.54% of the income-tax returns were accepted as they were filed. Our
Government has now approved a path breaking, technology intensive
project to transform the Income-tax Department into a more assesseefriendly
one. All returns will be processed in twenty-four hours and
refunds issued simultaneously. Within the next two years, almost all
verification and assessment of returns selected for scrutiny will be done
electronically through anonymised back office, manned by tax experts and
officials, without any personal interface between taxpayers and tax officers.
59. Reducing the tax burden on middle class has always been our
priority ever since our Government took over in 2014. We increased the
basic exemption limit from ` 2 lakh to ` 2.5 Lakh and gave tax rebate so
that no tax was payable by persons having income up to ` 3 lakh. We
also reduced the tax rate from 10% to 5% for the tax slab of ` 2.5 lakh to
` 5 lakh and introduced Standard Deduction of ` 40,000 for the salaried
class. Deduction of savings under section 80C was increased from
` 1 lakh to ` 1.5 lakh. Deduction of interest for self-occupied house
property was raised from ` 1.5 lakh to ` 2 lakh.
60. Special benefits and incentives were also given to small businesses
and start-ups. Overall compliance processes were simplified. Threshold
limit for presumptive taxation of business was raised from
` 1 crore to ` 2 crore. The benefit of presumptive taxation was extended
for the first time to small professionals fixing threshold limit at ` 50 lakh.
In order to promote a less cash economy, the presumptive profit rate has
been reduced from 8% to 6%. The tax rate for companies with turnover
of up to ` 250 crore, covering almost 99% of the companies, was reduced
to 25% which was also applicable to new manufacturing companies
without any turnover limits.
GST Reform for benefit to consumers and businesses
61. The Goods and Services Tax (GST) reforms lingered on during the
previous Government for almost a decade. Our Government implemented
the GST, which is undoubtedly the biggest taxation reform undertaken
since Independence. Seventeen different taxes levied by the Central and
State/UT Governments with cascading effect of tax on tax, were
consolidated into one GST. India became a common market. GST has
resulted in increased tax base, higher collections and ease of trade. This
will reduce the interface between the tax payer and the Government for
day-to-day operations and assessments. Now returns are fully online and
e-way bill system is in place. Inter-state movements have become faster,
more efficient, and hassle free with no Entry Tax, check posts, and truck
62. The high taxation levied on multiple commodities in the pre-GST
regime has been rationalised and the burden on the consumer, especially
the poor and the middle class, has been significantly reduced. The GST
Council, comprising the Centre and States/UTs, finalised the GST rates
collectively mostly lower than pre-GST rates. Since then, GST has been
continuously reduced providing relief of about ` 80,000 crore annually to
consumers. Most items of daily use of the poor and middle class are now
in the 0% or 5% tax slab. Cinema goers who were subjected to multiple
taxes up to 50% are mostly paying much lower tax at 12% now. Our
Government wants the GST burden on home buyers to be reduced and
accordingly we have moved the GST Council to appoint a Group of
Ministers to examine and make recommendations in this regard at the
63. GST aims to benefit small traders, manufacturers and service
providers. Exemptions from GST for small businesses has been doubled
from ` 20 lakh to ` 40 lakh. Further, small businesses having turnover up
to ` 1.5 crore have been given an attractive composition scheme wherein
they pay only 1% flat rate and have to file one annual return only.
Similarly, small service providers with turnover upto `50 lakhs can now opt
for composition scheme and pay GST at 6% instead of 18%. More than 35
lakh small traders, manufacturers and service providers will benefit from
these trader friendly measures. Soon, businesses comprising over 90% of
GST payers will be allowed to file quarterly return.
64. In spite of such major rate reductions and relaxations, revenue
trends are encouraging. The average monthly tax collection in the current
year is ` 97,100 crore per month as compared to ` 89,700 crore per
month in the first year. The State revenues are improving with
guaranteed 14% annual revenue increase for the first five years.
Customs and Trading Across Border Reforms
65. To promote the “Make in India” initiative, we have undertaken
rationalization of customs duties and procedures. Our Government has
abolished duties on 36 capital goods. A revised system of importing dutyfree
capital goods and inputs for manufacture and export has been
introduced, along with introduction of single point of approval under
section 65 of the Customs Act. Indian Customs is introducing full and
comprehensive digitalization of export/import transactions and leveraging
RFID technology to improve export logistics.
Demonetisation and Drive against Black Money
66. Our Government is committed to eliminating the ills of black
money from our country. The anti-black money measures taken by us
during the last four and half years in the form of Black Money Law, the
Fugitive Criminal Offenders Act, and Demonetisation, have brought
undisclosed income of about ` 1,30,000 crore to tax, led to seizure and
attachment of assets worth approximately ` 50,000 crore, and compelled
holders of large cash currency to disclose their source of earnings. During
this period, Benami assets worth ` 6,900 crore and foreign assets worth
`1,600 crore have been attached. As many as 3,38,000 shell companies
have been detected and de-registered, and their directors disqualified.
Growth of 18% in direct tax collection in 2017-18 and increase in tax
base by as many as 1.06 crore people filing income tax returns for the
first time in FY 2017-18 is mainly on account of demonetization.
Vision for the next Decade
67. Madam Speaker, the NDA Government headed by Hon’ble Prime
Minister Shri Narendra Modi has laid the foundation for India’s growth
and development for times to come. We have resolved many problems
which were coming in the way of realising our full potential as a society
and an economy. We are poised to become a Five Trillion Dollar Economy
in the next five years and aspire to become a Ten Trillion Dollar Economy
in the next 8 years thereafter.
68. In the Indian ethos, anything which is good is supposed to bestow,
cause, create and do good in all ten directions. I will, therefore, layout our
vision for ten most important dimensions in 2030.
69. The First Dimension of this Vision will be to build physical as well
as social infrastructure for a ten Trillion Dollar economy and to provide
ease of living. It will comprise next generation infrastructure of roads,
railways, seaports, airports, urban transport, gas and electric transmission
and inland waterways. On the social infrastructure side, every family will
have a roof on its head and will live in a healthy, clean and wholesome
environment. We will also build a quality, science oriented educational system
with Institutes of Excellence providing leadership at the top.
70 The Second dimension of our Vision is to create a Digital India
reaching every sector of the economy, every corner of the country and
impacting the life of all Indians. Digital Infrastructure and digital economy
of 2030 will be built upon the successes achieved in recent years in
digitisation of Government processes and private transactions. Our youth
will lead us in this endeavour with innumerable start-ups creating digital
India, and millions of jobs in this eco-system.
71. Making India a pollution free nation with green Mother Earth and
blue skies is the Third Dimension of our Vision. This India will drive on
Electric Vehicles with Renewables becoming a major source of energy
supply. India will lead the world in the transport revolution through
electric vehicles and energy storage devices, bringing down importdependence
and ensuring energy security for our people.
72. Expanding rural industrialisation using modern digital technologies
to generate massive employment is the Fourth Dimension of our Vision.
This will be built upon the Make in India approach to develop grass-roots
level clusters, structures and mechanisms encompassing the MSMEs,
village industries and start-ups spread in every nook and corner of the
country. India is now on the way to becoming a global manufacturing hub
in various sectors including automobiles and electronics, defence and
73. Our rivers and water bodies are our life supporting assets. Our
Government has worked vigorously for cleaning River Ganga. Fifth
Dimension of our Vision for India of 2030 is Clean Rivers, with safe
drinking water to all Indians, sustaining and nourishing life and efficient
use of water in irrigation using micro-irrigation techniques.
74. India’s long coastline has the potential of becoming the strength
of the economy, particularly through exploitation of the Blue Economy, to
ensure better standards and quality of life for a large number of people
living in the coastal areas. Our efforts in the Sagarmala programme will be
scaled up and we will develop other inland waterways faster. Our
coastline and our ocean waters powering India’s development and growth
is the Sixth Dimension of our Vision.
75. The Seventh Dimension of our Vision aims at the outer skies. Our
space programme – Gaganyaan, India becoming the launch-pad of
satellites for the World and placing an Indian astronaut into space by
2022 reflect this dimension of our vision.
76. Making India self-sufficient in food, exporting to the world to meet
their food needs and producing food in the most organic way is the
Eighth Dimension of our Vision. High farm production and productivity will
be achieved through modern agricultural practices and value addition. An
integrated approach towards agro and food processing, preservation,
packaging and maintenance of the cold chain will be our focus of
77. A healthy India is the Ninth Dimension of our Vision. We will be
aiming at healthy society with an environment of health assurance and the
support of necessary health infrastructure. Our Government has rolled out
the Ayushman Bharat scheme. By 2030, we will work towards a distress
free health care and a functional and comprehensive wellness system for
all. Such a healthy India built with the participation of women having equal
rights and concern for their safety and empowerment.
78. Our Vision can be delivered by Team India – our employees
working together with the elected Government, transforming India into a
Minimum Government Maximum Governance nation. This is the Tenth
Dimension. Our India of 2030 will have a proactive and responsible
bureaucracy which will be viewed as friendly to people.
79. With this comprehensive ten-dimensional Vision, we will create an
India where poverty, malnutrition, littering and illiteracy would be a
matter of the past. India would be a modern, technology driven, high
growth, equitable and transparent society.
The Fiscal Programme for 2019-20 and beyond
80. The estimate of incomes and expenditure which I am presenting
today, pegs the fiscal deficit of year 2019-20 at 3.4% of GDP. We would
have maintained fiscal deficit at 3.3% for year 2018-19 and taken further steps
to consolidate fiscal deficit in year 2019-20. However, considering the need for
income support to farmers we have provided ` 20,000 crore in 2018-19 RE and
` 75,000 crore in 2019-20 BE. If we exclude this, the fiscal deficit would have
been less than 3.3% for 2018-19 and less than 3.1% for year 2019-20.
81. Total expenditure rises from ` 24,57,235 crore in 2018-19 RE to
`27,84,200 crore in 2019-20 BE, a rise of `3,26,965 crore or
approximately 13.30%. This reflect a high increase considering low inflation.
Capital Expenditure for 2019-20 BE is estimated to be ` 3,36,292 crore.
Centrally Sponsored Schemes (CSS) are proposed to be allocated `3,27,679
crore in BE 2019-20 as against ` 3,04,849 crore in 2018-19 RE. Allocation
for National Education Mission is being increased from ` 32,334 crore in
RE 2018-19 to ` 38,572 crore in BE 2019-20. Allocation for Integrated
Child Development Scheme (ICDS) is being increased from ` 23,357 crore
in RE 2018-19 to ` 27,584 crore in BE 2019-20.
82. A substantial increase is proposed in the allocation for welfare of
the Scheduled Castes and Scheduled Tribes. The allocation of ` 56,619 crore
made in BE of 2018-19 for Scheduled Caste, further increased to ` 62,474
crore in RE is proposed to be enhanced to ` 76,801 crore in BE for 2019-
20, an increase of 35.6% over BE of 2018-19. For the Scheduled Tribes
also, proposed allocation in 2019-20 BE is ` 50,086 crore as against
`39,135 crore in BE 2018-19, an increase of 28%.
83. We have pursued the public enterprises asset management agenda
to make these enterprises accountable to the people. As many as 57
CPSEs are now listed with total market capitalisation of over ` 13 lakh
crore. The Government received over ` 1 lakh crore from disinvestment
proceeds during 2017-18. We are confident of crossing the target of
`80,000 crore this year.
84. We have maintained the glide path towards our target of 3% of
fiscal deficit to be achieved by 2020-21. India’s Debt to GDP ratio was
46.5% in year 2017-18. The FRBM Act prescribes that the Debt to GDP
ratio of the Government of India should be brought down to 40% by
2024-25. Along with completion of the fiscal deficit consolidation
programme, we will now focus on Debt consolidation.
85. Our Government had promised last year that we will carry out
reforms in stamp duty levied and collected on financial securities
transactions. I am proposing, through the Finance Bill, necessary
amendments in this regard. The amendments proposed would usher in a
very streamlined system. Stamp duties would be levied on one instrument
relating to one transaction and get collected at one place through the
Stock Exchanges. The duty so collected will be shared with the State
Governments seamlessly on the basis of domicile of buying client.
86. On behalf of all the people of India and our Government, I would first
like to thank all our taxpayers for their valuable contribution to nation building
and for providing a better life to the poor and marginalized sections of society.
Your tax helps provide dignity to our sisters and mothers with toilets and
cooking gas connections. Your tax pays for the electricity connections to the
poor who lived in darkness for generations. The tax you pay will provide health
care to 50 crore brothers and sisters, and children. It is you who is ensuring
respect, dignity, and a secure future to our retired jawans through One Rank
One Pension. Thank you, taxpayers.
87. Because of major tax reforms undertaken by us during the last four and
half years, both tax collections as well as the tax base have shown significant
increase and we have made progress towards achieving a moderate taxation–
high compliance regime. It is, therefore, just and fair that some benefits from
the tax reforms must also be passed on to the middle class taxpayers. Keeping
this in view, I propose to further reduce the tax burden on such taxpayers.
Though as per convention, the main tax proposals will be presented in the
regular budget, small taxpayers especially middle class, salary earners,
pensioners, and senior citizens need certainty in their minds at the beginning
of the year about their taxes. Therefore, proposals, particularly relating to such
class of persons should not wait. Hence, while for the present the existing
rates of income tax will continue for FY 2019-20, I propose the following:
88. Individual taxpayers having taxable annual income up to ` 5 lakhs will
get full tax rebate and therefore will not be required to pay any income tax. As
a result, even persons having gross income up to ` 6.50 lakhs may not be
required to pay any income tax if they make investments in provident funds,
specified savings, insurance etc. In fact, with additional deductions such as
interest on home loan up to ` 2 lakh, interest on education loans, National
Pension Scheme contributions, medical insurance, medical expenditure on
senior citizens etc, persons having even higher income will not have to pay any
tax. This will provide tax benefit of ` 18,500 crore to an estimated 3 crore
middle class taxpayers comprising self employed, small business, small
traders, salary earners, pensioners and senior citizens.
89. For salaried persons, Standard Deduction is being raised from the
current ` 40,000 to ` 50,000. This will provide additional tax benefit of
` 4,700 crore to more than 3 crore salary earners and pensioners.
90. Currently, income tax on notional rent is payable if one has more than
one self-occupied house. Considering the difficulty of the middle class having
to maintain families at two locations on account of their job, children’s
education, care of parents etc. I am proposing to exempt levy of income tax on
notional rent on a second self-occupied house.
91. TDS threshold on interest earned on bank/post office deposits is being
raised from ` 10,000 to ` 40,000. This will benefit small depositors and nonworking
spouses. Further, the TDS threshold for deduction of tax on rent is
proposed to be increased from ` 1,80,000 to ` 2,40,000 for providing relief to
92. The benefit of rollover of capital gains under section 54 of the Income
Tax Act will be increased from investment in one residential house to two
residential houses for a tax payer having capital gains up to ` 2 crore. This
benefit can be availed once in a life time.
93. For making more homes available under affordable housing, the
benefits under Section 80-IBA of the Income Tax Act is being extended for one
more year, i.e. to the housing projects approved till 31st March, 2020.
94. Also, for giving impetus to the real estate sector, I have proposed to
extend the period of exemption from levy of tax on notional rent, on unsold
inventories, from one year to two years, from the end of the year in which the
project is completed.
95. Madam Speaker, This is not merely an Interim Budget, but a medium of
the country’s development journey. All the transformation that we are
witnessing, is because of the passion of the people of our nation. The credit
goes to them only. Development has become a mass-movement during the
period of our Government.
96. We will transform India into a leading nation of the world with the help
of our people. We, along with them have laid the foundation. A grand edifice
will be erected with their support. We have given a decisive leadership, whose
intent is clear, policy is transparent and integrity is resolute.
97. With this, I commend the Budget to this august House.