Budget 2021- Rebuilding India

Union finance minister Nirmala Sitharaman presented the 

Union Budget

 2021 in Parliament on Monday.

The finance minister provided a major boost to healthcare and infrastructure in Union 

Budget

 2021. However, there was no change in Income Tax slabs this year.

In her speech, the finance minister mentioned that this year's budget proposals rest on 

six pillars

 — health and well-being, physical, financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D and minimum government and maximum governance.

Prime Minister Narendra Modi on Monday said that the Union 

Budget 2021

 has been presented amid unprecedented circumstances. He added that it is a proactive, not reactive budget and will boost India's self-confidence.

Breif Highlights

Education

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

A Central University will come up in Ladakh.

More than 15,000 schools will be strengthened under NEP 2020.

An 'umbrella' structure will be created for central higher education institutions in various cities such as Hyderabad.

Custom duty changes

Duty of copper scrap reduced to 2.5%.

We have calibrated customs duty rates on chemicals to encourage domestic value addition. We are now reducing duty on naphtha to 2.5%.

Custom duty on gold and silver to be rationalised.

We are raising duties on imported solar inverters from 5% to 20% and on solar lanterns from 5% to 15%.

All nylon products to have 5 % customs duty.

Tunnel boring machines will attract custom of 7%. Exemption on certain leather will be withdrawn.

To benefit farmers, we are raising customs duty on cotton from 0 to 10%.

GST, customs

We have seen record GST collections in the last two months. As chairperson of the GST council, I want to assure this House that we shall take every possible step to smoothen the GST structure further and remove anomalies like inverted duty structures.

A revised custom duty structure is on the annvil.

I now propose to review over 400 old exemptions this year. We will conduct this through extensive consultations and a revised customs duty structure free of distortions will be in place from October 1.

PF deductions

We have noticed that some employers deduct contributions from employees salaries towards provident fund, and other social security schemes, but do not remit them in time.

This means loss of interest and income for employees and trouble if the employer becomes unviable going forward.

To ensure that the contributions are remitted on time, I reiterate that late deposit of contributions will not be allowed as deductions to employers.

Now the Finance Minister presents Part B of the speech, which includes taxes and reforms.

Ms. Sitharaman quotes a Tamil couplet from Thirukkural on the quality of a good king. A good king is one who is able to acquire wealth, guard it and distribute it justly, the couplet says.

Relief for senior citizens - many of them, despite having foregone several basic necessities of their own, have strived to build our nation. We shall reduce compliance burden on those above 75 years.  This means people above 75 years, who get pension and earn interest from deposits need not file IT returns.

Presently an assessment can be reopened for six years. This time limit has been reduced to three years. In serious tax evasion cases, when the concealment of income is more than Rs.50 lakh per year, it can be opened for up to 10 years.

Affordable housing projects will get a tax holiday for one more year.

Compliance burden of small trusts whose annual receipts does not exceed ₹5 crore will be eased.

Minimum government and maximum governance

We have been taking a number of steps to bring reforms in tribunals, which I will further rationalise this year.

To have ease of doing business for those who deal with govt or central PSEs, I propose a system for swift resolution of contractual disputes.

The forthcoming census will be the first digital census ever. For it, I have allocated ₹3,758 crore in this year.

I propose to grant ₹300 crore to the Govt of Goa to celebrate 50 years of liberation.

₹1000 crore for welfare of tea workers, especially women and children, in Assam and West Bengal.

Sensex in green

Investors have welcomed the Union Budget with cheers as the benchmark stock indices rallied close to 2% by noon.

The market rally has helped increase the overall market capitalization of stocks by about 0.75% this morning.

The biggest gainers have been banks and non-bank financial companies, which have been boosted by the Finance Minister's announcement that the Centre will set up the equivalent of a 'bad bank' to help revive the banking sector from the bad loan crisis.

Here is a look at the detailed highlights of the budget.

Agriculture

• The MSP regime has undergone a change to assure price that is at least 1.5 times the cost of production across all commodities, the minister said.

• Around 43.36 lakh wheat growing farmers benefited from the government procurement under MSP as against 35.57 lakh previously.

• One thousand more mandis to be integrated with electronic national market.

• The government raised the agriculture credit target to Rs 16.5 lakh cr in 2021-22.

• The government raised the agriculture credit target to Rs 16.5 lakh cr in 2021-22.

Schemes

• New centrally sponsored scheme PM Aatmanirbhar Swasth Bharat Yojana to be launched with an outlay of Rs 64,180 crore over 6 years. Main interventions under PM Aatmanirbhar Swasth Bharat Yojana would include:

• Support for Health and Wellness Centres

• Setting up Integrated Public Health labs in all districts

• Critical care hospital blocks

• Strengthening of NCDC

• One Nation, One Ration Card scheme launched through which beneficiaries can claim their rations anywhere in the country. The migrant workers in particular benefit from scheme. One Nation, One Ration Card plan is under implementation by 32 states & UTs.

• Comprehensive National Hydrogen Energy Mission to be launched, as per PM Narendra Modi's announcement at third REINVEST conference in Nov 2020. The mission will help generate hydrogen from green power sources.

• Ujjwala scheme will be expanded to over one crore more beneficiaries. We will add 100 more districts in the next three years to the city gas distribution network. A gas pipeline project will be taken up in Jammu and Kashmir.

• MetroLite and Metro New Technologies to be deployed to provide metro rail systems in tier 2 cities and peripheral areas of tier 1 cities, at much lesser cost, with same experience, convenience and safety.

• A record sum of Rs 1,10,055 crore to be provided for Indian Railways, out of which Rs 1,07,100 has been reserved for capital expenditure.

• Allocation to rural infrastructure development increased from Rs 30,000 crore to Rs 40,000 cr in FY21.

• The government allocated Rs 3,726 cr for forthcoming Census which will be the first digital census.

• Allocation to rural infrastructure development increased from Rs 30,000 crore to Rs 40,000 cr in FY21.

• To further extend efforts towards unorganised labour force, I propose to launch a portal to collect relevant information on gig workers, building/construction workers among others. It'll help formulate health, housing, skill, insurance credit and food schemes for migrant workers, the minister said.

• The MSP regime has undergone a change to assure price that is at least 1.5 times the cost of production across all commodities, the minister said.

• Around 43.36 lakh wheat growing farmers benefited from the government procurement under MSP as against 35.57 lakh previously.

• 1,000 more mandis to be integrated with electronic national market.

• The government raised the agriculture credit target to Rs 16.5 lakh cr in 2021-22.

• New centrally sponsored scheme PM Aatmanirbhar Swasth Bharat Yojana to be launched with an outlay of Rs 64,180 crore over 6 years.

Main interventions under PM Aatmanirbhar Swasth Bharat Yojana would include:

• Support for Health and Wellness Centres

• - Setting up Integrated Public Health labs in all districts

• - Critical care hospital blocks

• - Strengthening of NCDC

The finance minister proposed to take concrete steps to increase funding for National Infrastructure Pipeline—

• - By creating institutional structures

• - By monetising assets

• - By enhancing share of capital expenditure in Central and State Budgets

  
  

• The definition of small companies to be revised by raising capital base to Rs 2 crore from current limit of Rs 50 lakh.

• The finance minister said Rs 35,000 crores have been sanctioned for Covid-19 vaccine this year 2021-22. I am committed to provide further funds if required, the minister added

• As part of the Gaganyaan mission activities, four Indian astronauts are being trained on Generic Space Flight aspects, in Russia. The first unmanned launch is slated for December 2021..

• Hundred new Sainik schools will be set up in partnership with NGOs, private schools, and states. We would be introducing the legislation this year to implement the setting-up of Higher Education Commission of India

• The minister said that for a $5-trillion dollar Indian economy, our manufacturing sector has to grow in double digits on a sustained basis. To make that possible the manufacturing companies need to become an integral part of global supply chains, she added.

• The government proposed further recapitalisation of state-owned banks and earmarked Rs 20,000 crore for the purpose.

• Road projects worth Rs 25,000 crore launched in poll-bound West Bengal. The government also allocated Rs 65,000 crore for roads and highway projects in Kerala and Rs 3,400 crore for Assam.

• To tackle the problem of air pollution in urban areas, the government sanctioned Rs 2,217 crore for 42 urban centres with million plus population.

• Finance Minister said that the government is aiming at 100% electrification of broad gauge rail tracks by December 2023.

• Over 13,000 km length of roads at a cost of Rs 3.3 lakh crore has already been awarded under Rs 5.35 lakh crore Bharatmala project of which 3,800 kms have been constructed. By March 2022, the government would be awarding another 8,500 and complete an additional 11,000 kms of National Highway Corridor.

• A framework to be put in place to give power consumer option to chose discoms.

• Jal Jeevan Mission Urban to be launched, outlay Rs 2.87 lakh crore over 5 years.

• Aimed at 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.

• For 2021-22, the minister proposed a sharp increase in capital expenditure and thus have provided Rs 5.54 lakh crores, which is 34.5% more than the budget estimate 2020-21.

• The finance minister announced voluntary vehicle scrapping policy to phase out old vehicles. The vehicles would be required to undergo fitness test in automated fitness centres after 20 years (personal vehicles) and 15 years (commercial vehicles).

• The minister laid out a vision for Aatmanirbhar Bharat in Part A of Budget 2021. This would include steps to strengthen the vision of Nation First by — doubling farmers' income, strong infra, women's empowerment, healthy India, good governance, education for all, inclusive development.

• The Covid-19 recovery has helped laid the foundation for the economic revival we see today.

• "Faith is the bird that feels the light and sings when the dawn is still dark," the finance minister quoted Rabindranath Tagore, adding that this moment in history is the dawn of a new era, where India is well-poised to be the land of promise and hope".

• Today, India has two vaccines, we have begun to safeguard both our citizens as well as 100 or more countries. Two or more more vaccines also expected soon.

• This year for the first time ever the budget was paperless. It was made public online.

• Sitharaman presented and read out the budget through a tab, instead of the traditional 'bahi khata'.

• The finance minister was seen carrying a tablet kept inside a red coloured cover with a golden coloured national emblem embossed on it.

• In 2019, Sitharaman ditched the long-standing tradition of carrying budget documents in a leather briefcase and went swadeshi with a 'bahi-khata'.

• Finance minister had launched the "Union Budget Mobile App" for hassle-free access of Budget documents by MPs and the general public using the simplest form of digital convenience.

• Consequent to imposition of Agriculture Infrastructure and Development Cess (AIDC) on petrol and diesel, the Basic excise duty (BED) and Special Additional Excise Duty (SAED) rates have been reduced on them so that overall consumer does not bear any additional burden. Consequently, unbranded petrol and diesel will attract basic excise duty of Rs 1.4, and Rs 1.8 per litre respectively. The SAED on unbranded petrol and diesel shall be Rs 11 and Rs 8 per litre respectively. Similar changes have also been made for branded petrol and diesel.

• Fiscal deficit pegged at 9.5% of GDP during current fiscal ending March 31. It is pegged at 6.8% in the next financial year.

• The minister said that the government would need another Rs 80,000 crore for which we would be approaching the market in these two months.

• Finance Minister Nirmala Sitharaman on Monday said the government is rationalising custom duties on gold and silver.

Taxes




• The number of Income Tax return filers has increased from 3.31 cr in 2014 to 6.48 cr in 2020.

• We shall reduce the compliance burden on our senior citizens who are 75 years of age and above. For senior citizens who only have pension and interest income, I propose exemption from filing their Income Tax return, the minister announced.

• Serious tax offences of concealment of income of over Rs 50 lakh can be reopened after 10 years.

• Exemption from tax audit limit doubled to Rs 10 crore turnover for companies doing most of their business through digital modes.

FDI and disinvestments




• Barring four strategic areas, PSUs in other sectors will be divested, the finance minister saidannouncing the new disinvestment policy.

• Two PSBs and one general insurance company to be divested, legislations amendments to be introduced in this session, the finance minister said. The finance minister puts disinvestment receipts at Rs 1.75 lakh crore for fiscal year beginning April 1, 2021.

• The FDI in insurance increased to 74% from 49%. In 2021-22 we would also bring the IPO of LIC for which I am bringing the requisite amendments in this session itself, the finance minister said.

• The states to get 41% share of taxes as per recommendations of the 15th Finance Commission. The govt, the minister said, has accepted the recommendation.

• Credit:- Times of India, The Hindu.
• Published in public intrest.