Union budget 2020 will release an additional Rs 3 lakh crore into the economy in sectors such as rural development, agriculture, health and education and that can directly spur consumption and growth of the economy, said Nirmala Sitharaman, Union Minister of Finance.
Interacting with the industry and media in Mumbai today, the FM, along with the Finance Secretary Rajiv Kumar and Revenue Secretary Ajay Bhushan Pandey and Economic Affairs secretary Atanu Chakraborty, said about Rs 2.83 lakh crore is going to be spent alone in the rural development sector. "Credit provisions are to the tune of Rs 15 lakh crore and the capital expenditure will be higher by 21 per cent, besides a disinvestment target of Rs 2.1 lakh crore will help spur growth," said Rajiv Kumar.
The Economic Affairs secretary said the Rs 2.1 lakh crore disinvestment target is easily achievable and further funds to the tune of Rs 65,000 crore will come from telecom spectrum sales.
FM Sitharaman said additional Rs 40,000 crore will reach the people for spending through the new Income Tax reforms.
Kumar said as per an assessment done by the Income-Tax department based on the returns filed during the previous years, at least 59 per cent of the total income taxpayers will be benefited and each taxpayer will be benefited to the tune of Rs 74,000 in the new tax regime.
The budget this year has introduced a new tax regime with revised slabs and by removing at least 70 exemptions. Moving to the new regime is optional, though.
"Our government's policy is to allow each of the individual to choose where to invest beneficially, than forcing or directing them to invest in certain instruments," said FM Sitharaman.
She said the policy of the government is to ensure benefits of all schemes should reach the needy people in any district, than allocating and focussing on select aspirational districts. "There are many districts where medical infrastructure is weak to rope in the Ayushman Scheme. That is why we have decided to charge a health cess on imported medical equipment, which will be used to build this infrastructure," she said.
Replying to concerns of the industry that the government's decision to tax dividends at the hands of investors would lead to some promoter-investors paying over 50 per cent in taxes in certain cases, Sitharaman said that the government had put in a lot of thought into the matter, but decided to burden the retail investor less. "I am trying to understand from the industry as to what will be the best way to tax dividend. The idea was to benefit the small investor. Are you saying I should go back to the old system?" she asked businessmen who raised the issue with her.