Web Exclusive
What action did Modi government take on promises in its 2019-20 budget?

Union Budget. Photo: Shutterstock
Even as finance minister Nirmala Sitharaman brainstorms over Budget 2020-21, there are a host of promises made by the government in the Budget it presented in July 2019 after coming to power for a second term. Here is a look at the actions that were taken on the promises made by Sitharaman in her first budget:

1. In the second phase of PMAY-G, during 2019-20 to 2021-22, 1.95 crore houses are proposed to be provided to the eligible beneficiaries

ATR: Since the scheme was announced by the government in 2015, till date 91 lakh houses have been completed till the latest figures are available for 2019-20. The government has consistently fallen short of achieving its own target of providing 1.5 crore houses during this period. In 2019-20 alone just about 4.5 lakh houses have been completed. To construct and handover 1.95 crore houses in three years, the government would have to construct houses three times faster than it has over the last few years.

2. The Jal Shakti Ministry will work with states to ensure piped water supply to all rural households by 2024

ATR: Since independence, only 18 per cent or 3.28 crore rural households had access to piped water. Even though the finance minister had announced the scheme in July 2019, operational guidelines for the scheme were formulated only towards the end of December 2019 by the newly formed Ministry of Jal Shakti. To achieve its target, the government would have to provide one lakh rural households with piped water connection every single day till the end of 2024.

3. Prime Minister took the Sankalp of achieving Gandhiji’s resolve of Swachh Bharat to make India Open Defecation Free by 2nd October 2019. I am very satisfied and happy to report that this would be achieved by October 2. To mark this occasion, the Rashtriya Swachhta Kendra will be inaugurated at Gandhi Darshan, Rajghat on October 2, 2019.

ATR: Establishment of the Rashtriya Swachhta Kendra was first announced by the Modi government in 2017. An official of the Gandhi Smriti informed Business Standard that work on setting up the facility was still going on with no confirmation of the actual deadline. Also the government’s claim on open defecation free status of rural India needs a reality check. A National Statistical Office (NSO) survey had estimated that just about 71 per cent of rural households had access to toilets in 2018. In effect, almost a fourth of rural India was still defecating in the open. In poor states like Uttar Pradesh and Bihar, only half the rural households had access to toilets. Moreover, the Comptroller and Auditor General of India (CAG) has in the past picked holes in the claims of various state governments. For instance, Gujarat was declared ODF in 2017. The CAG surveyed the state between 2014 to 2017 and found 56 villages in eight districts which either did not have toilets or had toilets with no water connection which literally rendered them unusable.

4. We propose to establish a National Research Foundation (NRF) to fund, coordinate and promote research in the country.

ATR: Till date, no such foundation has been established by the Ministry of Human Resource Development. The work to prepare a detailed project report was completed in October 2019 but is believed to have been circulated among various ministries.

5. The Government is proposing to streamline multiple labour laws into a set of four labour codes.

ATR: The Ministry of Labour and Employment has prepared a draft of the four labour codes on wages, industrial relations, social security and welfare and occupational safety health and working conditions by subsuming existing codes under these four heads. The Industrial Relations Code 2019 was introduced in the Lok Sabha in November 2019 and was referred to a standing committee on December 23, 2019. The standing committee has to file a report before April 2020.

6. Having addressed legacy issues, Public Sector Banks are now proposed to be further provided Rs 70,000 crore capital to boost credit for a strong impetus to the economy.

ATR: Finance Minister Nirmala Sitharaman announced the upfront capital infusion of Rs 70,000 crore in various public sector banks. Of this Rs 16,000 crore was injected into Punjab National Bank (PNB) which received in the biggest setback in the Nirav Modi-Mehul Choksi scam.

7. Government is setting an enhanced target of Rs 1,05,000 crore of disinvestment receipts for the financial year 2019-20.

ATR: According to official government figures, only Rs 17,364 crore have been realised through disinvestments of central public sector enterprises in 2019-20. The sale of Air India too has progressed slowly. The government raised most of this money by selling a minority stake in some companies without executing any strategic sale during 2019-20.
8. The Government would start raising a part of its gross borrowing programme in external markets in external currencies.

ATR: Although this announcement had raised concerns from various quarters about the risks and benefits of the move, the government has yet announced borrowing in foreign currency overseas.

9. I propose to make PAN and Aadhaar interchangeable and allow those who do not have PAN to file Income Tax returns by simply quoting their Aadhaar number and also use it wherever they are required to quote PAN.

ATR: The government has decided to extend the deadline for linking PAN and Aadhaar from December 30, 2019, to March 31, 2020. The PAN would become inoperative if the individual fails to link it to Aadhaar by then.

10. I, propose that the business establishments with an annual turnover of more than Rs 50 crore shall offer low-cost digital modes of payment to their customers and no charges or Merchant Discount Rate shall be imposed on customers as well as merchants. Necessary amendments are being made in the Income Tax Act and the Payments and Settlement Systems Act, 2007 to give effect to these provisions.

ATR: In January the government announced that it would impose penalties of Rs 5000 a day on companies with an annual turnover of over Rs 50 crore if they do not provide digital payment options to their customers.  

11. More than Rs 3.75 lakh crore is blocked in litigations in service tax and excise. There is a need to unload this baggage and allow the business to move on. I, therefore, propose a Legacy Dispute Resolution Scheme that will allow quick closure of these litigations.

ATR: The government opened a three-month window in September 2019 in a scheme called Sabka Vishwas. In two of the three months, according to the finance ministry, 26,142 applications were received involving an amount of Rs 16,007 crore. Of these 2,828 applications were accepted by the government involving an amount of Rs 162 crore.

12. It is also proposed to move to an electronic invoice system wherein invoice details will be captured in a central system at the time of issuance.

ATR: The GST Council has approved the introduction of e-invoicing in phases for reporting of business-to-business (B2B) invoices to the GST System which has been introduced on a voluntary basis.

13. The government will offer an investment option in ETFs on the lines of the Equity Linked Savings Scheme (ELSS).

ATR: In December 2019, the Modi cabinet approved the launch of Bharat Bond ETF – the first-ever corporate bond to be launched in India. People could invest as low as Rs 1,000 in this ETF.

14. Government has announced its intention to invest Rs 100 trillion in infrastructure over the next five years. To this end, it is proposed to set up an expert committee to study the current situation relating to long term finance and our past experience with development finance institutions, and recommend the structure and required flow of funds through development finance institutions.

ATR: In December 2019, Nirmala Sitharaman announced a Rs 102 trillion investment over the next five years on infrastructure. It is not clear whether these include projects, which are currently in progress or represent fresh investments in infrastructure.

15. We propose to start a television programme within the DD bouquet of channels exclusively for start-ups.

ATR: Soon after the budget announcement, a programme named ‘Startup Ki Baat’ was launched on Doordarshan. The weekly programme is aired at 5 PM every Sunday.

16. A Credit Guarantee Enhancement Corporation for which, regulations have been notified by the RBI, will be set up in 2019- 20.

ATR: Till date, there has been no policy movement on setting up such a corporation.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel