Union Budget 2019 is a crucial one for the entire nation. In the budget, newly appointed Finance Minister, Nirmala Sitharaman proclaimed the governments plans for the second term. The Finance Minister compared Indias current growth with its past growth rate.
Our economy was at approx $1.85 trillion in 2014, within 5 years, it has reached $2.7 trillion, said Sitharaman in her address to the Parliament.
Indian economy will become $3 trillion economy in this year itself. It is now the 5th largest in the world and in purchasing power parity terms, it is the third largest, behind only the US and China, she added.
Following this, the Finance Minister talked about spheres that Modi government is focusing on in its second term. Among those spheres, the Indian business ecosystem was one of the focus areas.
According to the Union Budget 2019, the Modi government will make moves to bring ease to MSMEs(Micro, Small and Medium Enterprises), reinforce the investment sector, recapitalise the banking sector and increment taxation for the affluent classes.
Easing Loan Conditions for MSMEs
In the recent budget, Modi government has proclaimed to grant INR 1 crore to MSMEs (Micro, Small and Medium Enterprises). More so, a separate payment platform will be created for MSMEs to pay bills faster and save their time.
The government has decided to give pension benefits to small and medium-sized traders in its second term.
Government will create a payment platform for MSMEs to enable them to pay bills, and save time. The government will extend pension benefits to INR 3 crore retail traders and shopkeepers who have a revenue of less than INR 1.5 crore. This will be called the PM Karam Yogi Maan Dhan scheme, Finance Minister, Nirmala Sitharaman, announced.
Creating Positive Changes in the Investment Sector
In its new term, the Modi government is all set to bring about positive changes in the investment segment.
It has permitted FII and FDI to make investments in debt securities in infrastructure debt funds. Further, it has increased minimal public stakeholding in listed firms to 35 per cent.
A proposition for a separate platform was made for supporting social and voluntary companies in raising debt, capital and equity.
Since FDI participation has not slowed down in India, a surge of 6 per cent is witnessed with 100 per cent FDI for insurance intermediaries. Local sourcing norms to be eased for FDI in single-brand retail, as announced by the Finance Minister.
Shoring up the Banking Sector
Seeing the monetary dearth in the banking sector, the Modi government has decided to recapitalise public banks by INR 70,000 crore.
Further, the government encouraged banks and mutual funds to invest in monetarily secure NBFCs (Non Banking Financial Companies). In the Union Budget, the government said that it will offer a one-time 6 months partial credit guarantee, which will mainly be targeted for public banks so that they can purchase assets in NBFCs.
Bringing Relief to Startups and Stress to the Wealthier Classes
Addressing the issue of Angel Tax, the government said that startup companies would not be inspected for raising funds by the IT department (Income Tax department).
Alongside this, the government will put its focus on affluent classes and thus heralded that income tax will increase for businessmen and professionals who come in the categories, INR 2 to 5 crore and INR 5 crore by 3 per cent and 7 per cent respectively.