Overview on Budget 2021 in India

 Budget 2021 

As the Indian economy slowly recovers from the Kovid-19 epidemic that has affected countries around the world, the budget plays a much more important role for the upcoming fiscal year 2021-22. 

The budget is intended to promote growth, in addition to increased allocation of resources for the healthcare sector. 

To boost the vision of an Atmanabir India and increase foreign investment in India, the government has already launched a production-linked incentive (PLI) scheme to make India a global manufacturing hub and self-sufficient.

A few minutes after the presentation of the digital budget for FY 2021-22, the Sensex climbed 3.5% and the Nifty 50 index crossed the 14,000 benchmarks. 

The budget was divided into two parts, with Part A being an approach to cover the direct and indirect proposals for Atmanabir India and Part B.

Part A of the budget proposal for FY 2021-22 was based on 6 main pillars:

a) Health and welfare

b) Physical and financial capital, and infrastructure

c) Inclusive development for Aspirational India

d) Strengthening Human Capital

e) Innovation and R&D

f) Minimum Government and Maximum Governance

Some of the highlights can be seen as follows:

a) Health and welfare:

A 137% increase in health expenditure was announced for this year's budget (Rs 223,846 crore in FY 22-22 and Rs 94,452 crore in FY 20-21).

A new scheme with an outlay of Rs 64,180 crore for more than 6 years, the Pradhan Mantri Ammanbihar Swachh Bharat Yojana will be launched, aiming to have a better primary, secondary and tertiary health care system.

More than 17,000 urban and 11,000 rural health and welfare centers will be supported and integrated public health laboratories will be established in each district.

A new scheme for universal water supply, Jal Jeevan Mission (Urban) will be launched, with an outlay of Rs. 287,000 crores to be implemented in 5 years.

2,217 crore allocation for 42 urban centers to combat air pollution.

Allocation of Rs 1,41,678 crore for Urban Swachh Bharat Mission over a period of 5 years (2021-2026).

Introduction of voluntary vehicle scraping policy with fitness testing for private vehicles and commercial vehicles after 15 years.

Allocation of 35,000 crores for Kovid-19 vaccine in the budget estimate for FY 2021-22.

b) Physical and financial capital and infrastructure:

Infrastructure:

The total allocation of 5.54 lakh crores, 34.5% more than FY 2020-21

An amount of Rs 1.97 lakh crore over 5 years to increase the scale and size of manufacturing sectors and a push for job growth under the PLI scheme.

7 textile parks to be set up in next 3 years under Mega Investment Textiles Park (MITRA)

The project pipeline for the National Infrastructure Plan (NIP), which initially started with 6835 projects, has now expanded to 7,400 projects.

The government aims to achieve NIPs in the central and state budgets by an institutional framework, monetization of assets, and increasing capital expenditure.

The Bill to set up a Development Financial Institution (DFI) with a capitalization of 20,000 is intended to be introduced in 3 years' time with a lending portfolio of at least Rs 5 lakh crore.

Debt financing by Infrastructure Investment Funds (INVITs) and FPIs of REITs will be permitted by relevant amendments to the law.

Launch of a "national monetization pipeline" for potential brownfield infrastructure assets.

Operational roads with an enterprise value of Rs 5000 crore and transmission assets of Rs 7000 crore will be transferred to NHAI InvIT and PGCIL InitIT respectively.

Under the asset monetization program, railways, the next several airports, and core infrastructure assets will be considered.

Under the Bharatmala Pariyojana project, 3,800 km of roads have been constructed out of 13,000 km awarded with an amount of Rs 3.3,000 crore.

 An additional 8,500 km and 11,000 km of National Highway Corridors are to be completed by March 2022.

Of the 1,18,101 lakh crore allocated to the Ministry of Road Transport and Highways, 1,08,230 crore is for capital expenditure.

2. Railways:

The railway has to pay Rs. 1,10,055 crore Rs. 1,07,100 crore is for capital expenditure.

Western and Eastern dedicated freight corridors will be operational by June 2022.

Electrification of Broad Gauge Route Kilometer (RKM) by the end of 2021 by 72% and 100% by 2023.

The Electricity Distribution Sector Scheme has a cost of Rs. 3,05,984 crore over the next 5 years, to support DISCOMS for building infrastructure.

3. Port

In the financial year 21-22, 7 ports worth more than Rs 2,000 crore are to be available through public-private partnerships.

4. Petroleum and natural gas:

100 districts to be added to city gas distribution network in next 3 years

5. Financial Capital:

Government to establish Fin-Tech Hub at GIFT-IFSC.

A capital infusion of Rs 1,000 crore is to be provided for the Solar Energy Corporation of India and Rs 1,500 crore for the Renewable Energy Development Agency of India.

The permitted FDI limit for insurance companies increased from 49% to 74%.

Recapitalization of 20,000 for public sector banks proposed for the financial year 2021-22.

c) Inclusive development for Aspirational India:

1. Agriculture and Fisheries:

75,060 was paid to wheat farmers in the financial year 20-21.

The benefit of the SWAMITVA scheme is proposed to be extended to all the states / UTs in the financial year 21-22.

In the financial year 2012, agricultural credit to farmers increased to 14.5 lakh crores.

Rural Infrastructure Development Fund allocation increased to 40,000 crores.

Under NABARD, it is proposed to increase the existing Rs 5,000 crore micro-irrigation fund to Rs 5,000 crore.

Proposal of investment for the development of multi-purpose seawall park to be set up in Tamil Nadu as well as modern fishing harbor and fish landing centers.

2. Migrant workers, laborers, and financial inclusion:

Implementation of One Nation One Ration Card under implementation, covering 86% beneficiaries so far.

Portal for the gig, building, and construction workers to prepare housing, health, skills, insurance, loans, and food schemes for migrants

It is proposed to reduce the margin money requirement for SC, ST, and women from 25% to 15% with loans to SC, ST, and women for agriculture-related activities.

Rs 15,700 crore allocated to the MSME sector.

d) Strengthening Human Capital:

A Central University is to be established in Leh.

An allocation of 35,219 crores over six years by FY 2026, to benefit 4 crore SC students, led to the re-implementation of the Post Matric Scholarship Scheme.

750 Eklavya schools and 100 new Sainik schools will be set up in tribal areas.

Allocation of Rs 3,000 crore for apprenticeship opportunities with the existing National Apprenticeship Training Scheme for Graduate and Engineering Diploma hold

Partnership with both Japan and UAE for skill development and recognition.

e) Innovation and R&D:

Allocation of Rs 50,000 crore for National Research Foundation in 5 years.

4,000 crores in 5 years for the launch of Deep Ocean Mission.

1,500 crore for financial incentives to promote digital methods of payment.

f) Minimum Government, Maximum Governance:

The National Nursing and Midwifery Commission Bill is to be introduced for transparency, efficiency, and governance in the nursing profession.

Rs 3,768 crore allocated for the first digital census in 2021-2022.

Allocation of Rs 1,000 crore for the welfare of tea workers (women and children) in Assam and West Bengal.

300 million rupees were given to the Goa government to celebrate the Diamond Jubilee year of the state's liberation from Portuguese rule.

The total expenditure is estimated at 34.50 lakh crore, the fiscal deficit being 9.5% of GDP.

States expected to achieve a fiscal deficit of less than 3% of GSDP by 2023–24.

Part B of the Budget speech covers direct and indirect taxes:

a) Direct Taxes:

Senior citizens above the age of 75, who receive an only pension or interest income, will be exempted from filing income tax returns.

Proposal to reduce the time limit to reopen the assessment of serious fraud cases from 6 years to 3 years. In cases of fraud of 50 lakh or more, the assessment may be resumed for 10 years with the approval of the Principal Chief Officer Can be opened from Of the IT department.

Proposal for the constitution of the dispute resolution committee. (For taxable income 50 lakh and disputed income 10 lakh).

Proposal to notify regulations to overcome the difficulties of NRIs of double taxation.

Proposal to increase the tax audit limit from 5 crores to 10 crores.

Proposal to Exempt Dividend Payment from TDS / REIT.

An additional deduction of 1.5 lakhs will be provided for loans taken up to 31 March 2022 for the purchase of affordable homes.

Proposal to make the infrastructure loanable for raising funds by issuing tax-efficient zero-coupon bonds.

Before filing returns with details of capital gains from listed securities, dividend income, etc., to make return filing easier.

Proposal to extend eligibility to claim tax holiday for startups for one more year.

b) Indirect tax:

Custom duties to support MSMEs to be reduced by 7.5% to support recent reductions in iron and steel prices and copper recycle on copper scrap from 5% to 2.5%

Duty on gold and silver should be rationalized.