The Union Budget for FY 2020-21 has been presented on 1 February amid economic turbulence that has been challenging India for the past five quarters. With the new budget in line, questions arise – will the recent economic headwinds bottom out or linger longer? The Economic Survey 2020 is predicting growth to recover in H2 of the financial year 2021 with an annual growth ranging from 6-6.5%.
In this Union Budget 2020 Analysis, we have highlighted the key points laid down by our finance minister Smt. Nirmala Sitharaman.
· Agriculture: Intending to transform India’s agricultural sector, the Union Budget has laid down a 16-point agenda to encourage the State Governments’ who have implemented various agriculture-based model laws issued by the Central Government earlier. This will help streamline the process of agricultural produce procurement and bring more efficiency in the supply chain, providing better prices to farmers and end consumers.
Increasing allocation for the agriculture sector to 1.6 lakh crores is expected to further lay the roadmap for agricultural growth.
· Healthcare: Under Union Budget 2020-21, the healthcare budget allocation is proposed to increase from INR 626.59 billion to INR 690 billion. This is expected to have a positive impact on the healthcare sector, addressing the constraints of the supply side. The Budget also proposed to establish new hospitals in Tier 2 and Tier 3 cities which will help in providing improved aidto all andsetting up new medical colleges which is expected to enhance the supply of clinicians.
· Education: As per the Union Budget 2020 analysis, new education policy will be announced soon which is expected to bring significant changes in this sector. Measures will also be taken to attract funding through FDI and foreign currency loans. Establishing top-notch education institutions is another goal that the Government wants to achieve this year.
· Infrastructure: Budget allocation of INR 1.7 lakh crores for transportation infrastructure, establishing 100 new airports, running 150 more trains, and setting up five new smart cities are expected to foster infrastructure growth.
· Taxes: The tax proposals laid in the budget are expected to build trust, attract investments, establish certainty, and minimise litigations.
The budget also focuses on MSME empowerment and promoting start-up entrepreneurship. We hope this Union Budget 2020 Analysis will help throw light on the future that our government is planning to build.