Finance Minister Nirmala Sitharaman presented the Union Budget 2021-22, the third budget in Parliament on February 1, 2021. The Finance Minister started the announcement by mentioning the challenges faced during the pandemic and the vision of the ‘Pradhan Mantri Garib Kalyan Yojana.’ She also mentioned that India has two COVID-19 vaccines made available and two more will be made accessible soon. She reiterated that the government is fully prepared to support the economy's reset.
She marked that budget proposals for this financial year rest on six pillars - health and well-being, physical and financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D, and 'Minimum Government, Maximum Governance'.
PROVISIONS INTRODUCED IN THE BUDGET:
HEALTH AND SANITATION:
The minister said that investment on health in this budget has increased substantially, with a focus on strengthening preventive care, curative and well-being of the population.
- A new central healthcare scheme has been announced to strengthen the country’s healthcare infrastructure over the next six years- The Pradhan Mantri Atma Nirbhar Swasthya Bharat Yojana. It has been launched to develop primary, secondary and tertiary healthcare. It will operate in addition to the existing National Health Mission and has been allocated around Rs 64,180 crore. The scheme will focus on developing capacities of healthcare systems, develop institutions for detection and cure of new and emerging diseases.
- She also announced Rs 27 lakh crores in COVID support measures, which amounts to almost 13 per cent of country's GDP, and lauded the success of the Aatmanirbhar Bharat initiative.
“We have announced 35,000 crore rupees for COVID vaccine, and, for the health sector, we have a budget outlay of Rs 2,23,846 crore, which up 137 per cent compared to Rs 94,452 crore in previous years,” she said.
- Mission POSHAN 2.0 to improve nutritional outcomes across 112 aspirational districts.
- Operationalisation of 17 new public health units at points of entry.
- Modernising of existing health units at 32 airports, 15 seaports and land ports.
- Jal Jeevan Mission Urban aimed at better water supply nationwide.
- Strengthening of Urban Swachh Bharat Mission.
INFRASTRUCTURE:
- To finance the government's infrastructure programme, a separate financial institution has been announced that will be used for financing big-ticket infrastructure projects without worries of asset-liability mismatch.
The dedicated bank will be a catalyst for infrastructure financing. - Pradhan Mantri Ujjwala Yojana (LPG scheme) will be extended to cover 1 crore more beneficiaries. The scheme will be extended further to provide clean cheap cooking fuel.
- Vehicle scrapping policy to phase out old and unfit vehicles – all vehicles to undergo fitness test in automated fitness centres every 20 years (personal vehicles), every 15 years (commercial vehicles)
- Highway and road works will be announced in Kerala, Tamil Nadu, West Bengal and Assam.
- National Asset Monetising Pipeline launched to monitor asset monetisation process.
- National Rail Plan to be
- created to bring a future ready Railway system by 2030.
- 100% electrification of Railways to be completed by 2023.
- Metro services announced in 27 cities, plus additional allocations for Kochi Metro, Chennai Metro Phase 2, Bengaluru Metro Phase 2A and B, Nashik and Nagpur Metros.
- National Hydrogen Mission to be launched to generate hydrogen from green power sources. An amount of Rs.1.47 lakh crores, over a 5-year-period, from 2021 has been assigned for initiatives such as wastewater treatment, reduction in plastic waster, reduction in pollution and the like.
- Focus on the National Highways Authority of India (NHAI) operational toll roads, airports in tier-2 and 3 cities, and sports stadiums.
- An Infra-National Rail plan to prepare a future rail system in India by 2030 has been proposed to bring down logistics cost.
- Recycling capacity of ports to be doubled by 2024.
- Gas pipeline project to be set up in Jammu and Kashmir.
Evidently, Health and infrastructure were the two main focal points of the budget.
EDUCATION
The Department of School Education and Literacy, Ministry of Education, will receive Rs 54,873.66 crores for the upcoming financial year– the lowest budget allotted to it in two years.
- 100 new Sainik Schools will be set up. Over 15,000 schools to implement National Education Policy and act as a model for rest schools. A Central University to come up in Ladakh.
- 50 Eklavya Model residential schools in tribal areas will be set-up. Increase unit cost for each school form Rs 20 crore to Rs 38 crore. Rs 35.
- Post-matric scheme revamped.
- The Apprenticeship Act, 1961 will be amended to increase opportunities for students; will be realigned for providing post education apprenticeship.
- National Research Foundation (NRF) to get an outlay of Rs 50,000 crore over five years to strengthen research and focus on the national priority trust area.
- National Language translation mission to translate policy-related information that will be available on the internet in regional languages.
- Setting up regional national institutes for virology.
TAX
- It was announced that the senior citizens (above 75 years) who get only pension and interest on income are not required to file ITR.
- Reopening of IT assessment:
- In normal cases: the time limit has been reduced to 3 years from 6 years.
- In serious tax evasion case (Rs. 50 lakh or more) can be reopened till 10 years
- 'Faceless dispute resolution committee and mechanism' to be set up to reduce litigations for small taxpayers. Any taxpayer with taxable income up to 50 lakh and disputed income up to 10 lakh can approach the committee.
- A faceless Income Tax Appellate Tribunal (ITAT) for providing online resolution.
- The 'tax audit limit' under Section 44AB has been increased from Rs.10 crores to Rs.5 crores where 95% of business transactions are done in digital mode.
- 'Advance tax liability' on dividend income shall rise only after the declaration or payment of dividend.
- Deduction under section 80EEA is to be extended to loans taken up to 31st March 2022. Also, deduction under section 80IAC will be extended upto 31st March 2021.
- Affordable housing projects can avail tax holiday until 31 March 2022 (one year)
- Tax incentives for the IFSC and tax holiday for aircraft leasing and rental companies.
- Capital Gains, dividend incomes, and interest income will now be pre-filled.
- Under Indirect Taxation, 400 old exemptions to be reviewed this year through extensive consultations, after which a revised customs duty structure will be introduced.
CUSTOM DUTY
- Compliance burden of small trusts whose annual receipts does not exceed Rs. 5 crore to be eased.
- Duty of copper scrap reduced to 2.5% and custom duty on gold and silver to be rationalised.
- Duty on naphtha reduced to 2.5% whereas duty on solar inverters raised from 5% to 20%, and on solar lanterns from 5% to 15%.
- All nylon products charged with 5% customs duty and Tunnel boring machines to attract customs duty of 7%.
- Customs duty on cotton raised from 0 to 10%.
- Agriculture infrastructure and development cess proposed on certain items including urea, apples, crude soyabean and sunflower oil, crude palm oil, kabuli chana and peas.
The‘Turant Customs’ initiative is also proposed for faceless, paperless, and contactless customs measures.
ECONOMY AND FINANCE:
- The total fiscal deficit is pegged at 9.5 % of GDP, which is estimated to be 6.8% in 2021-22. It is funded through government borrowing.
- A Unified Securities Market Code to be created for consolidating the provisions of the Securities and Exchange Board of India (SEBI) Act,1992, Depositories Act, 1996, and two other laws. Also, SEBI will be notified to regulate the setting up and arrangement of the commodity market system.
- A new Asset Reconstruction Company is to be set up to provide resolution to stressed assets in PSUs.
- Amendment of the Insurance Act, 1948 to introduce additional Foreign Direct Investment (FDI) to insurance companies from the 49% to 74%.
- Proposal made to allow States to raise borrowings up to 4% of GSDP this year.
- Deposit insurance increased from Rs 1 lakh to Rs 5 lakh for bank depositors.
- Two Public Sector Undertaking or PSU banks and one general insurance firm to be dis invested this year.
- An IPO (Initial Public Offering) of LIC (Life Insurance Corporation) to debut the fiscal and Strategic sale of BPCL, IDBI Bank, Air India to be completed
- De-criminalization under the Companies Act, 2013 completed and now the decriminalization of the Limited Liability Partnership (LLP) Act, 2008 will be in force.
EMPLOYMENT:
- Social security benefits to be extended to gig and platform workers. '1 nation-1 ration card' plan has been implemented by 32 States and UTs.
- Suggestion made for the support of female workers in terms of providing protection at work in a bid to encourage more women in the workforce.
"Minimum wages will apply to all categories of workers and they all will be covered by the Employee State Insurance Corporation.Women will be allowed to work in all categories and also in the night shift with adequate protection,” the minister said in Budget presentations.
- Margin capital required for loans via Stand-up India scheme reduced from 25% to 15% for SCs, STs and women.
- In case the PF amount was deducted but not deposited by the employer, it will not be allowed as a deduction for the employer.
AGRICULTURE:
- Agriculture infrastructure fund to be made available for Agricultural Produce and Livestock Market Committee (APMCs) for augmenting their infrastructure.
- 1,000 more Mandis to be integrated into the National Agricultural Market or E-NAM market place.
- Five major fishing hubs, including Chennai, Kochi and Paradip, to be developed.
- A multipurpose seaweed park to be established in Tamil Nadu.
- Agricultural credit will be increased to 16.5 lac crores.
- Enhancement of the scope of the 'Operation Green Scheme' to include 22 perishable crops, and 1.68 crore farmers have registered. Also, 1,000 mundis to be integrated under the said scheme.
- Government to take up the development of fishing harbors and fish landing centers along the banks of rivers and waterways.
The hon’ble finance minister started her speech at 11:00 pm and concluded it at 12.50 pm. She spoke for nearly 1 hour and 49 minutes.
“We have spent, we have spent, we have spent,” she said in her concluding comments.
