LIVE UPDATES : UNION BUDGET 2020
CATCH LIVE NEWS UPDATES ON BUDGET 2020 By NIRMALA SITHARAMAN On 1st FEB 2020
Budget 2020 Expectations
When will the Union Budget 2020 be announced?
Union Budget 2020 will be presented on the 1st February, 2020.
Who will present the Budget 2020 in the Parliament?
Budget 2020 will be presented by the Finance Minister Nirmala Sitharaman in the Parliament.
What is making Budget 2020 challenging?
The government has been continuously trying to aid sectors facing challenges for revenue growth and cost reduction. One of the key reforms introduced last year was the corporate tax rate cut. However, the experts and industrialists feel more reforms should be made to lift the economic growth to its potential as the government has planned to reach the $5 trillion mark by the year 2024.
Since the economic growth has stalled to just 5% in the current FY, all eyes will be on Nirmala Sitharaman on the day of the Union Budget 2020. The new upcoming Budget 2020 is expected to create jobs and raise consumption and demand in the economy.
Where do you fit in this budget?
All individuals, corporates, banks, MSMEs, and other organisations are looking at demand revival to steer the economy back in progress. There might be a reduction in the tax rates for individuals, an increase in the limit for tax benefit under section 80C, and so on.
What are the expectations from the Union Budget 2020?
Here are some of the expectations from the upcoming Union Budget 2020:
- Relaxation of the income tax rate for individuals: Presently, there is a significant tax outgo of 20% for an individual earning between Rs 5 lakh and Rs 10 lakh. A tax rate cut from 20% to 10% would increase the disposable surplus in the hands of the middle-class.
- Boost to tax-saving for individuals: The government could increase the limit under section 80C to give a much-needed boost for public savings.
- Lower tax rate for partnership and LLPs: There are MSMEs consisting of partnership firms and LLPs who pay a tax of 30%. While the government has recently conferred a tax cut on corporates and manufacturing companies, the other forms of business enterprises still pay a high tax of 30%. The government could reduce the tax rate for these businesses to create a level playing field among MSMEs.
- Re-introduction of LTCG exemption: The government might re-introduce the exemption on the long-term capital gains earned from the transfer of equity shares.
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Who prepares the Union Budget?Budget is prepared using a consultative method involving the ministry of finance, and spending ministries. Finance ministry issues guidelines for expenditure based on which ministries present their demands. The Budget Division of the Department of Economic Affairs in the finance ministry is the nodal body responsible for preparing the Budget. The full budget is then presented by the finance minister of India in the parliament.
What are the three types of government budgets?
- Balanced budget: A government budget where the estimated expenditure is equal to expected revenue/receipts for a particular financial year is said to be a balanced budget.
- Surplus budget: A government budget is said to be a surplus budget if the expected government revenue/receipt is more than the estimated government expenditure in a particular financial year.
- Deficit budget: A government budget is said to be a deficit if the estimated government expenditure is more than the estimated government revenue/receipts in a particular financial year.
What is the Central Plan Outlay?Central Plan Outlay is the division of the monetary resources among various sectors of the economy and ministries of the government.
What are direct taxes and indirect taxes?Direct taxes are the taxes which are directly levied on the income of the individuals and corporates — for example, income tax, corporate tax, etc. Indirect Taxes are taxes which are levied on the goods and services supplied. The final consumer pays it at the time of sale. For example, GST, Customs Duty, etc.
What is fiscal policy?Fiscal policy is the decision taken by the government for adjusting its expenditure level and revenue collection (through taxation) to monitor and accomplish the nation’s economic goals.
What is a capital budget?Capital Budget is the estimated amount of capital receipts and payments. It includes investments in shares, loans and advances granted by the Central Government to State Governments, Government companies, corporations and other parties.
What is the finance bill?When the Central Government proposes to introduce or amend taxes or the current tax structure (or continue with the same), the proposal is forwarded to the Parliament for approval in the form of finance bill. It can only be presented in Lok Sabha.
What is a plan and non-plan expenditure?Plan expenditures are calculated after discussing with concerned ministries and the planning commission. Example, expenses needed for programmes under the five-year plan of the Central Government.
Non-plan expenditure is any expense incurred by the government other than plan expenditure (like the five-year plan). Examples include interest payments, grants, and govt employees’ salary among many others.
What impact does the budget have on the market and economy?Whether money is spent or saved by the finance minister, it influences the fiscal deficit. The extent of the deficit and the means of financing it affects the money supply and the economic interest rate. High-interest rates mean higher capital costs, lower profits and hence lower stock prices for the industry. The fiscal measures that the government takes through the budget affect public spending. A rise in direct taxes, for example, would reduce disposable income, thereby reducing demand for goods. This decrease in demand will lead to a decrease in output, thus affecting economic growth.