What could this Union Budget 2021 means to you?

Takeaways from finance budget 2021 India

Finance Minister spelt out the six pillars on which she rested the Budget 2021

1. Health and Well-Being
2. Physical and Financial capital and infrastructure
3. Inclusive Development for Aspirational India
4. Reinvigorating Human Capital
5. Innovation and R&D
6. Minimum government Maximum governance

Highlights of Union finance budget are everywhere in media, but what could it means to you as a general public. We have prepared this summary notes of FM speech with the help of our teammate Ravi Saini.

Nirmala Sitharaman identified eight areas of focus for the Union Budget 2021-22 as the “Sankalp of NATION FIRST”.

• Doubling farmers' income
• Strong Infrastructure
• Healthy India
• Good Governance
• Opportunities for Youth
• Education for All
• Women Empowerment, and
• Inclusive Development.

Health Sector

• The outlay for health increased to Rs 2,23,846 crore, an increase of 137 per cent relative to the previous year's Budget.

• Integrated public health labs will be set up in all districts of the country. Critical care hospital blocks would be established in 202 districts.

• A National Institution for One Health will be set up. Under this would come up nine bio-safety laboratories. She announced the Swachh Bharat Swashth Bharat programme with a capital of Rs 1.9 lakh crore.

• Main interventions under PM Aatmanirbhar Swasth Bharat Yojana also include support for health and wellness centres and strengthening of NCDC (National Centre for Disease Control).

• The pneumococcal vaccine that is currently limited to only five states will be rolled out across the country, Sitharaman said adding, “It will avert more than 50,000 child deaths annually”. She announced Rs 35,000 crore for Covid-19 vaccine in the next fiscal.

• To check pollution and its impact on health, Sitharaman announced as part of the government’s scrapping policy, to phase out old and unfit vehicles — after 20 years in case of personal vehicles, 15 years in case of commercial vehicles.

Taxes

• The government has proposed an agriculture cess of Rs 2.5 per litre on petrol and Rs 4 per litre on diesel. It will be known as the Agriculture Infrastructure and Development Cess (AIDC).

• Simplified, unbranded petrol and diesel will now attract basic excise duty of Rs 1.4, and Rs 1.8 per litre respectively. The SAED on unbranded petrol and diesel will be Rs 11 and Rs 8 per litre on petrol and diesel respectively.

• Relief to senior citizens above 75 years, who have only rent income and pension. They are now exempt from filing their Income Tax Returns.

• No change was proposed for general income taxpayers. Their tax slab structure remains the same.

• Proposal to reduce this time-limit for re-opening of assessment to three years. In serious tax evasion cases too, only where there is evidence of concealment of income of `Rs 50 lakh or more in a year, can the assessment be re-opened up to 10 years. This reopening can be done only after the approval of the principal chief commissioner, the highest level of the Income Tax Department.

Farmers

• The amount paid to farmers in 2013-14 in the case of wheat was Rs 33,874 crore which increased to Rs 62,822 crore in 2019-20 and to Rs 75,050 crore in 2020-21.

• In the case of pulses, the increase in the amount paid to the farmers increased 40 times in 2020-21 over 2013-14 — from Rs 236 crore to Rs 10530 crore.

• Under Swamitva Scheme saying 1.8 lakh property owners were provided cards under the Modi government. Finance minister announced that the agriculture infrastructure fund would now be available to mandis.

• Top-5 fishing hubs in the country would be developed as the hubs for economic activities for the all-round development of the coastal areas. She also proposed to set up a multi-purpose seaweed park in Tamil Nadu and encourage seaweed farming in coastal areas for greater employment generation.

Infrastructure and Industry

• Nirmala Sitharaman spoke about strengthening the manufacturing sector saying the Indian companies need to become the core of the global supply chain for an Atmanirbhar Bharat. The government had announced a Rs 1.97 lakh crore allocation for this in 2020 to be spent over the next five years. She said this would be further strengthened.

• A scheme of Mega Investment Textile Parks will be launched to create world-class infra in the textile sector, with plug-and-play facilities, to create global export champions. Seven textile parks to be set up for over three years.

• In the infrastructure sector, the National Infrastructure Pipeline, announced in December 2019 with 6,835 projects has been expanded to 7,400 projects Rs 102 lakh crore fund. To give further thrust to National Infrastructure Pipeline, three concrete actions will be taken:
  • Creating institutional structures
  • Monetizing assets
  • Increasing share of capital expenditure in central and state budgets

• Development Financial Institution will be set up with a capital of Rs 75,000 crore. A new bill will be introduced for the same. It will be a professionally managed body to provide, enable and catalyze infra financing with a capital of Rs 20,000 crore. The aim of the institution is to have a lending portfolio of at least Rs 5 lakh crore in three years.

Disinvestment

• A national monetisation pipeline will be launched, and an asset monetisation dashboard will be created for monitoring the progress.

• Besides the IDBI, two more PSBs will be disinvested. Initial Public Offer (IPO) of the LIC of India will be issued during the next fiscal year.

• Non-core assets such as surplus land with ministries and of the Public Sector Enterprises PSEs will be sold through a Special Purpose Vehicle (SPV) in the form of a company.

• The estimated target for disinvestment in 2021-22 is 1.75 lakh crore. In 2020-21, the target was of Rs 2.1 lakh core but less than 20,000 crore could be generated primarily due to the coronavirus pandemic that crippled the global economy.

Transport

• The railways would monetise freight corridor. “Indian Railways have prepared a National Rail Plan for India — 2030. The Plan is to create a ‘future-ready’ Railway system by 2030,” she said.

• More than 13,000 km length of roads, at a cost of 3.3 lakh crores, has already been awarded under the 5.35 lakh crores Bharatmala Pariyojana project of which 3,800 kms have been constructed. By March 2022, we would be awarding another 8,500 kms and complete an additional 11,000 kms of national highway corridors.

• Poll-bound states of West Bengal, Tamil Nadu, Kerala and Assam found special mention in her Union Budget speech. The states got highway construction allocations of Rs 25,000 crore, 1.03 lakh crore (investment proposal), Rs 65,000 crore (investment proposal) and Rs 19,000 crore respectively.

Urban Areas

• A new scheme will be launched at a cost of `18,000 crores to support augmentation of public bus transport services.

• Jal Jeevan Mission Urban will be launched with an outlay Rs 2.87 lakh crore over five years.

• The government aims to provide universal water supply in all 4,378 urban local bodies, with 2.86 crore household tap connections and liquid waste management in 500 AMRUT cities.

Power

• There is a need to provide choice to consumers through competition. “We have added 139 Giga Watts of installed capacity, connected an additional 2.8 crore households and added 1.41 lakh circuit km of transmission lines,” she said.

• A framework will be put in place to give consumers alternatives to choose from among more than one distribution companies.

• A Hydrogen Energy

Sources: Full script of budget speech can be downloaded here.

Disclaimer:

The information contained in this article is for general information purposes only and does not constitute legal advice, Whilst we endeavour to keep the information up-to-date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability for a particular purpose. We recommend that professional advise should be taken from a suitably qualified expert before undertaking any action.

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