Key Takeaways from the Union Budget 2019

This being an election year, the Union Government had only declared an interim budget in February. The final union budget 2019 was presented by the new finance minister, Nirmala Sitharaman, today in the parliament.

After the massive mandate that the NDA government received in May, people had been expecting big bang reforms from this budget. And Sitharaman does not seem to have disappointed. The budget, which was light on numbers and heavy on rhetoric, has promised a number of measures to boost the Indian economy.

Here are the key takeaways from the final Union Budget of 2019:

1. Deepening of equity markets: The government has enhanced the limit of FDI in insurance intermediaries along with enhancement of limits in other sectors like aviation, media, etc. Limit of FPI has also been raised from 24% to the sectoral caps. In addition, the government has asked SEBI to increase the minimum public shareholding in listed companies from 25% to 35%.
2. Deepening of bond markets: FIIs will be allowed to invest in debt securities via infrastructure debt funds. The budget also proposed to allow FPI in listed debt papers of REITs and NBFCs. Steps will also be taken to increase retail participation in government bonds.
3. PPP in Railways: Railways need an investment of ₹50 Lakh crores over the next 10-12 years. To unleash faster development, the government will allow a public-private partnership to build railway infrastructure.
4. Personal taxation: No changes in tax slabs for individual taxpayers. However, individuals earning above ₹2 crores will be liable to an additional surcharge. Two new deductions were also introduced for interest on loan taken for the purchase of affordable housing and electric vehicles. There is a proposal to include CPSE ETF under the ambit of ELSS, making it eligible for 80C deductions.
5. Bank recapitalisation: Additional ₹70,000 crore sanctioned for the recapitalisation of public sector banks.
6. Corporate taxation: Companies with turnover of up to ₹400 crore will be liable to pay tax at a reduced rate of 25%. This limit covers 99.3% of all companies in India.
7. Increase in RBI’s authority: RBI will have more authority to regulate NBFCs. RBI will also act as the regulator for housing finance companies, which earlier came under the ambit of National Housing Bank.