PUBLIC FINANCE

ASSIGNMENT

SUBMITTED BY:
JAGRATI SENGAR
B.COM APPLIED ECONOMICS ‘E’
3RD YEAR
 CONTENTS
1. INTRORODUCTION: AN FRBM ACT
2. OBJECTIVES OF FRBM ACT
3. KEY FEATURES OF FRBM ACT
4. RECENT NEWS
5. LATEST TRENDS
6. INTRODUCTION: AN BUDGET
7. IMPORTANCE OF BUDGET
8. TAX PRPOPSALS
9. HIGHLIGHTS OF UNION BUGDET
2020
FISCAL RESPONSIBILITY AND
BUDGET MANAGEMENT ACT
(FRBM ACT) 2003
INTORDUCTION: AN FRBM ACT
• FRBM Act is all about maintaining a balance between Government
revenue and government expenditure.
• The intention of the Fiscal Responsibility and Budget Management Act
was to bring –fiscal discipline.
• Efficient management of expenditure, revenue and debt.
• Macroeconomic stability.
• Better coordination between fiscal and monetary policy.
• Transparency in the fiscal operation of the Government.
• Achieving a balanced budget.
OBJECTIVES OF FRBM ACT

The main objectives of the act were:

• To introduce transparent fiscal management systems in the
country.
• To introduce a more equitable and manageable distribution of the
country’s debts over the years.
• To aim for fiscal stability for India in the long run
• Additionally, the act was expected to give the necessary flexibility
to Reserve Bank of India (RBI) for managing inflation in India.
KEY FEATURES OF FRBM ACT

The FRBM Act made it mandatory for the government to place the
following along with the Union Budget documents in Parliament
annually:
1. Medium Term Fiscal Policy Statement
2. Macroeconomic Framework Statement
3. Fiscal Policy Strategy Statement
The FRBM Act proposed that revenue deficit, fiscal deficit, tax
revenue and the total outstanding liabilities be projected as a
percentage of gross domestic product (GDP) in the medium-term fiscal
policy statement.
RECENT NEWS

Budget 2020: Fiscal deficit target raised to 3.8% from 3.3% for FY20 on
revenue shortfall; banks on escape clause to overcome FRBM Act

The government has utilised 'escape clause' under the FRBM Act which
provides it leeway for relaxation of fiscal deficit roadmap during time
of stress.

"Section 4 (2) of the FRBM Act provides for a trigger mechanism for a
deviation from the estimated fiscal deficit on account of structural
reforms in the economy with unanticipated fiscal implications.
Therefore, I have taken a deviation of 0.5%, consistent with Section
4(3) of FRBM Act, both for RE 2019-20 and BE 2020-21,"
LATEST FRBM TARGETS
• The latest provisions of the FRBM act requires the government to
limit the fiscal deficit to 3% of the GDP by March 31, 2021, and the
debt of the central government to 40% of the GDP by 2024-25, among
others.
• The Act provides room for deviation from the annual fiscal deficit
target under certain conditions.
 UNION
BUDGET
2020
INTRODUCTION: UNION BUGDET
• A budget is a financial plan for a defined period, often one year.
• It include planned sales volumes and revenues, resource
quantities, costs and expenses, assets, liabilities and cash flows.
• Companies, governments, families and other organizations use it to
express strategic plans of activities or events in measurable terms.
• A budget is the sum of money allocated for a particular purpose and
expenditures along with proposals for how to meet them.
• It may include a budget surplus, providing money for use at
a future time, or a deficit in which expenses exceed income.
IMPORTANCE OF UNION BUDGET
• It helps in identifying areas of weakness so that the government can
allocate resources sustainable manner.
• A budget allows the government to regulate the imposition of taxes in
various sectors like investment and expenditure.
• Business and enterprises look forward to the government budget as
resources being allocated to various sectors are revealed.
• Economic disparity and inequality can be overcome by introducing
economic welfare policies for the underprivileged society through
budget.
• A budget helps the government focus on the companies in public
sector by introducing policies to aid their growth.
HIGHLIGHTS
OF UNION
BUDGET
2020
 TAX PROPOSALS
• Concessional corporate tax rate of 15% to new domestic companies in
manufacturing and power sector.
• Tax concession for sovereign wealth fund of foreign governments and
other foreign investments.
• Tax benefits to Start-ups by way of deduction of 100 per cent of their
profits are enhanced by increasing turnover limit and period of
eligibility.
• Concessional tax rate for cooperatives proposed.
• Turnover threshold for audit of MSMEs increased. Extension of time
limits pertaining to the tax benefits for affordable housing.
• Issuance of Unique Registration Number to all charity institutions for
easy tax compliance.
• Health cess to be imposed on imports of medical equipment given
these are made significantly in India.
• Dividend Distribution Tax removed and classical system of dividend
taxation adopted.
• Simplified GST return shall be implemented from 1st April 2020.
Refund process to be fully automated.
• Simplified and New Income Tax Regime as an option to the old
regime the old regime.
• Around 70 of more than 100 income tax deductions and exemptions
have been removed.
INCOME TAX
New optional tax slabs : new income tax slabs will be available for those
who forgo exemptions.
Taxable income slabs Up to Rs. Rs. 5 lakh Rs. 7.5 lakh Rs. 10 lakh Rs. 12.5 Rs. 15 lakh
5 lakh to 7.5 lakh to 10 lakh to 12.5 lakh lakh to 15 and above
lakh
Tax rate Nil 10% 15% 20% 25% 30%
AGRICULTURE, IRRIGATION AND RURAL DEVELOPMENT
• A budget allocation of ₹2.83 lakh crore for the sector comprising agriculture and
irrigation activities.
• Agri-credit availability set at ₹15 lakh crore for 2020-21.
• Comprehensive measures for 100 water stressed districts.
• Provide 20 lakh farmers to set up standalone solar pumps.
• Help another 15 lakh farmers to solarise their power grid.
• Village storage scheme proposed to be run by women SHGs.
• Indian Railways to have refrigerated coaches capability in ‘kisan trains’ to carry
perishables and milk.
• Krishi UDAN on international and national routes.
• Rural Development and Panchayati Raj have been allotted Rs. 1.23 lakh cr.
• Fish production to be raised to 200 lakh tonnes by 2022-2023.
• By 2025, milk processing capacity to be doubled to 108 Mt.
• Government to focus on Zero Budget farming.
WATER AND SANATATION
• The government has proposed Rs. 11,500 crore for its Jal Jeevan Mission.
• Rs. 3.6 lakh crore has been approved to provide piped water supply to every
housrehold in FY21.
• Swachh Bharat Abhiyan Allocation of Rs. 12,300 Cr.

HEALTH
• An allocation of ₹69,000 crore for the health sector.
• Inclusive of Rs. 6400 crore directed towards the PM Jan Arogya Yojana (PMJAY)
• ₹12,300 crore for Swachh Bharat this year.
• Proposal to set up hospitals in Tier-II and Tier-III cities with the private sector using
PPP.
• Expand Jan Aushadhi scheme to provide for all hospitals under Ayushman Bharat by
2025.
• TB Harega Desh Jeetega campaign launched to eliminate tuberculosis by 2025.
• Under Jal Jeevan Mission Rs. 11,500 Cr allocated for the year 2020-21.
EDUCATION AND SKILLS
• ₹99,300 crore for education sector in 2021 and about ₹3,000 crore for skill
development.
• Introducing Foreign Direct Investment (FDI) in the education sector.
• Urban local bodies to provide internship to young engineers for a year.
• Degree-level full fledged online education programmes by institutions ranked in
top 100 in NIRF rankings, especially to benefit underprivileged students.
• A degree level online education programme was also proposed. Offered by top
Indian institutes.
• A national police university and a national forensic science university is proposed
to be setup.
• IND SAT exam for students of Asia and Africa to promote “study in India”
programme.
INDUSTRY, COMMERCE AND INVESTMENT
• Rs. 27,300 crore would be allotted for the development and promotion of industry
and commerce
• Investment and clearance cell will be set up to provide “end to end” facilitation.
• A National Technical Textiles Mission would be set up with a four year
implementation period from 2020-21 to 2023-24 at an estimated outlay of Rs. 1480
crore to position India as a global leader in Technical Textiles.
• Turnover of GeM, to Rs. 3 lakh crores 3.24 lakh vendors are already on this
platform.
• Proposed to develop 5 new smart cities in collaboration with states in PPF mode.
INFRASTRUCTURE
• Budget proposes to provide ₹1.7 lakh crore for transport infrastructure in 2021.
• National Logistics Policy to be released soon.
• Chennai-Bengaluru Expressway to be started.
• Aim to achieve electrification of 27,000 km of lines.
• Plan to have a large solar power capacity for Indian Railways.
• The government also proposes a Bengaluru suburban rail project at a cost of
₹18,600 crore.
• Govt to monetise 12 lots of national highways by 2024.
• 100 more airports will be developed by 2024 to support UDAN.

POWER
• The Finance Ministry will allocate Rs 22,000 crore to power renewable energy
sector in this financial year. The govt proposes to expand national gas grid to reach
27,000 kms from the current reach of 6,000 km.
RAILWAY
• A large solar power capacity will be set up alongside the rail tracks on the land
owned by the Indian Railways.
• More station redevelopment programs. More Tejas like trains to connect major
tourist attractions.
• Bengaluru suburban rail will be provided the required boost.
• More high speed trains like the one between Ahmedabad and Mumbai will be
started.

AVIATION
100 more airports will be developed to provide support to the PM Udaan scheme BY
2024
NEW ECONOMY
• Proposed to provide Rs. 6000 crore to Bharatnet programme in 2020-21.
• Provided an outlay of Rs. 8000 crore over a period five years for the National
Mission on Quantum Technologies and Applications.
• Fibre to the home (FTTH)connections through Bharatnet will link 100,000 gram
panchayats this year.

WOMEN AND CHILD, SOCIAL WELFARE

• Rs. 35,600 crore proposed for nutrition programmes for the FY 2020-21.
• The Ministry of Finance is set to allocate Rs 28,600 crore for programs meant
especially for women.
• Rs. 85000 crore would be allocated towards the welfare of schedule castes and
other backward classes for 2020-21.
• Development and welfare of schedule tribes Rs. 53,700 crore is proposed.
• Enhance allocation of Rs 9500 crore is provided to senior citizens and Divyang.
ENVIRONMENT AND CLIMATE CHANGE
• India's commitment under the Paris Agreement action will kick-in from January 1,
2021.
• Power plants with higher emissions will have to be closed and the land will be
used for other purposes.
• The government will encourage plans to have clean air by the state governments
with allocation of Rs 4,400 crore.

BAHI KHATA
Last year, Finance Minister Nirmala Sitharaman broke an age-old tradition of
carrying a briefcase to Parliament to present the Union Budget. She carried a ‘bahi
khata’ instead. A bahi khata is a traditional Indian ledger typically used by
businesses in the country. It was symbolic for India’s first full-time female finance
minister to carry a bahi khata as it represented Indian culture while a briefcase may
be interpreted as a British colonial tradition.
THANK YOU