Saturday, February 1, 2020

Budget 2020-21 Highlights related to industry

Indian Finance Minister Niramala Sitharaman today presented Union Budget 2020-21 in the Lok Sabha and introduced a new optional personal income tax system and announced multi-billion dollar farm, infra and healthcare package to revive growth in the country. Finance Minister, Nirmala Sitharaman said the budget is to boost the income and purchasing power of people. Finance Minister moots 16-point action plan to boost agriculture and farmers welfare.

The minister proposed raising customs duty on a variety of products ranging from tableware and kitchenware, electrical appliances to footwear, furniture, stationery and toys to give a level playing field to domestic companies and boost 'Make in India'. 

A scheme will be introduced to provide subordinate debt to MSME entrepreneurs. The government has also asked the Reserve Bank to extend the Debt Restructuring window for micro, small and medium enterprises by a year to 31st March 2021, in measures aimed at imparting a thrust to the MSME sector. Government plans to amend the Companies Act to decriminalise civil offences.

New income tax slabs proposed
-10% income tax between `.5-7.5 lakh
-15% income tax for income between
`.7.5-10 lakh vs 20% earlier
-20% income tax for income between
`.10-12.5 lakh vs 30% earlier
`.15 Lakh, continue to be 30%
The new tax regime shall be optional for taxpayers. 

A simplified GST return shall be implemented from the 1st April, 2020. It will make return filing simple with features like SMS based filing for nil return, return pre-filling, improved input tax credit flow and overall simplification. Dynamic QR-code is proposed for consumer invoices. GST parameters will be captured when payment for purchases is made through the QR-code.

Imports under Free Trade Agreements are on the rise. Undue claims of FTA benefits have posed threat to domestic industry. In the coming months, Rules of Origin requirements shall be reviewed, particularly for certain sensitive items, so as to ensure that FTAs are aligned to the conscious direction of our policy.

To boost the economic growth, higher spending on infrastructure, rural development and agri sector were announced. Finance Minister hiked the fiscal deficit target for current fiscal to 3.8% of GDP, from 3.3%. For 2020-21, fiscal target seen at 3.5% of GDP. Nominal GDP growth for 2020-21 estimated at 10%.

The benchmark RSS4 grade rubber closed at `.135 a kg at Kottayam, while RSS3 grade closed at `.109.18 a kg at Bangkok and Malaysian SMR20 closed at `.97.35 a kg. On ICEX February 2020 futures closed at `.132.14 a kg, March at `.133.95, April at `.137.50, May at `.140.24, June at `.141.64 and July closed at `.143.05 a kg. Tokyo Commodity Exchange February 2020 futures series closed at ¥161.9 a kg, March at ¥173.8, April at ¥179.3, May at ¥179.4, June at ¥180 and the contract for delivery in July 2020 closed at ¥181.2 a kg.

To read Rubber4U – 1st February 2020 issue:
For National Rubber Policy: