Highlights: India unveils budget aimed at boosting infrastructure and foreign investment

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NEW DELHI: India on Friday unveiled a budget aimed at boosting infrastructure and foreign investment, the first since the Bharatiya Janata Party led by Prime Minister Narendra Modi returned for a second term in power.

Here are the highlights of Finance Minister Nirmala Sitharaman’s budget for the 2019/20 fiscal year that began April 1:

INVESTMENT

-India will ease foreign direct investment restrictions in single-brand retail

-Proposes further opening up of FDI in aviation, insurance, media and animation sectors

-Important to get retail investors to invest in treasury bills

-Will allow foreign investors to buy debt of listed real estate investment trusts

-Government aiming for $14.5 bln target for disinvestment proceeds in FY20

TAXATION

-Will levy tax deduction at source of 2% for cash withdrawals exceeding $146,000 per year

-Proposes relief in securities transaction tax

BANKING

-State-owned banks proposed to be provided $10.2 bln of additional capital

-Will strengthen central bank’s authority over shadow banks

-There is a need to give tax parity to non-banking finance companies

ECONOMY

-India will become a $3trn economy in the current fiscal year, and a $5trn economy in the next few years

-India to invest heavily in infrastructure and job creation

-Government will raise part of its gross borrowing in external markets in foreign currencies

-Fiscal deficit for 2019/2020 seen at 3.3% of GDP – Bloomberg

INFRASTRUCTURE

-The government will upgrade 125,000 kilometres of roads over the next five years at a cost of $11.6 bln

-Railway infrastructure will need an investment of $72bln between 2018 and 2030

-Govt to encourage global companies to set up large manufacturing plants

-India will enter into aircraft financing and leasing activities