Union Budget 2021- Summary and Highlights

Union Budget Is A Ray Of Hope To Surf The Wave Of Crisis.

The Union Minister for Finance & Corporate Affairs, Smt Nirmala Sitharaman, presented the Union Budget 2021-22 in Parliament on 1st February 2021, the first Budget of this new decade and a digital one the backdrop unprecedented COVID-19 crisis. Setting a vision for AatmaNirbhar Bharat, she said this explains 130 crore Indians who have full confidence in their capabilities and skills.

Union Budget 2021- Summary & Highlights

She noted that Budget proposals would further increase the Sankalp of Nation First, Doubling Farmer’s Income including Strong Foundation, Healthy India, Good Governance, Opportunities for youth, Education for All, Women Empowerment, and Comprehensive Development amongst others. Furthermore, on the path to fast-implementation are the 13 encouragements of Budget 2015-16-which were to develop throughout the AmrutMahotsav of 2022, on our Sovereignty 75th year. They, too, resonate with this concept of AatmaNirbharta, she added.

Although the Budget is presented on 1st February but it is presented in two parts: Part A and Part B

Budget Proposal 2021 Part A

The foundation of Union Budget 2021 stands on 6 grounds, and they are as follows:

1.Health and Wellbeing

2. Physical & Financial Capital and Infrastructure

3. Inclusive Development for Aspirational India

4. Reinvigorating Human Capital

5. Innovation and R&D

6. Minimum Government and Maximum Governance.

Health and Wellbeing

There is a substantial increase in Health Infrastructure financing. The Budget expenditure for Health and well-being is Rs 2,23,846 crore in BE 2021-22 as corresponding this year’s BE of Rs 94,452 crore, an improvement of 137 percent.

The Finance Minister also declared that a new centrally sponsored scheme, PM AatmaNirbhar Swasth Bharat Yojana, will be started with an outlay of about Rs 64 180 crores over six years. This will develop primary, secondary, and tertiary care Health Systems functions; Strengthen existing national institutions and create new organizations to cater to the detection and cure of new and developing diseases. This will be of interest to the National Health Mission. The primary interventions under the scheme are

a. Support for 17,788 ranches and 11,024 urban Health and Wellness Centers.

b. Setting up integrated public well-being labs in all districts and 3382 block public health assemblies in 11 states.

c. Establishing significant care hospital blocks in 602 communities and 12 central establishments.

d. Strengthening of the National Centre for Disease Control (NCDC), its five regional branches, and 20 metropolitan health surveillance units.

e. Development of the Integrated Health Information Portal to all States/UTs to connect all public health labs.

f. Operationalisation of 17 different Public Health Units and strengthening 33 enduring Public Health Units at Points of Entry at 32 Airports, 11 Seaports, and seven land crossings.

g. Setting up of fifteen Health Emergency Operation Centers and two mobile hospitals.

h. Also, Setting up a national institution for One Health, a Regional Research Platform for WHO southeast Asia Region, 9 Bio-Safety Level III laboratories, and four regional National Institutes for Virology.

Vaccines

The stipulation of Rs 35,000 crore made for Covid-19 vaccine in BE 2021-22.
The Pneumococcal Vaccine, a Made in India commodity presently limited to only five states, will be rolled out across the nation to avoiding 50,000 child deaths annually.

Union Budget 2021- Summary & Highlights
COVID19 Vaccine

Nutrition

To strengthen nutritional content, outreach, delivery, and consequence, Government will merge the Supplementary Nutrition Programme and the PoshanAbhiyan; Including the Mission Poshan 2.0. However, The Government will adopt an enhanced strategy to improve nutritional products across 112 Aspirational Districts.

Universal Coverage of Water Supply and Swachch Bharat Mission

The Finance Minister proclaimed that the JalJeevan Mission (Urban) would be launched for general water supply in all 4,378 Urban Local Bodies with 2.86 crore household tap attachments and liquid waste management in 500 AMRUT cities. 

It will be completed over five years, with an outlay of Rs. 2,87,000 crore. Furthermore, the Urban Swachh Bharat Mission will be completed with a total financial allocation of Rs 1,41,678 crore over five years from 2021-2026. Also, to tackle air pollution’s burgeoning problem, the Government proposed contributing an amount of Rs. 2,217 crore for 42 urban centers with a million-plus population in this budget. 

At the same time, A voluntary vehicle-fighting policy to phase out old and unfit vehicles was also announced. 

2. Physical and Financial Capital and Infrastructure

AatmaNirbhar Bharat-Production Linked Incentive Scheme
Finance Minister said that for a USD 5 trillion marketplace, our construction sector has to grow in binary digits on a continued basis.

 Our construction companies need to become an integral part of global supply chains, possess core support and cutting-edge technology. To complete all of the above, PLI schemes to create international construction champions for an AatmaNirbhar Bharat have been announced for 13 sectors. For this, the Government has invested nearly Rs.1.97 lakh crore in the next five years, beginning FY 2021-22. Thus, This leadership will help bring scale and size in critical sectors, create and nurture global winners and provide jobs to our youth.

Textiles

Meanwhile, to facilitate the textile industry to become globally aggressive, attract large investments, and boost employment generation, a scheme of Mega Investment Textiles Parks (MITRA) will be started in addition to the PLI scheme. This will create a world-class foundation with plug and play facilities to enable create global champions in exports. Also, 7 Textile Parks will be established over three years.

Union Budget 2021- Summary & Highlights
Textile Industry.

Infrastructure

The National Infrastructure Pipeline (NIP), which the Finance Minister stated in December 2019, is the first-of-its-kind, whole-of-government exercise ever undertaken. 6835 projects are ongoing under NIP. The project pipeline has now grown to 7,400 projects. Around 217 projects worth Rs 1.10 lakh crore under some key infrastructure Ministries have been completed.

Infrastructure financing – Development Financial Institution (DFI)

Dwelling on the foundation sector, Smt Sitharaman said that infrastructure needs long term debt financing. A professionally Development Financial Institution management needs to act as a provider, enabler, and catalyst for infrastructure financing. 

Therefore, a Bill to set up a DFI will be introduced. The Government has provided a sum of Rs 20,000 crore to profit from this organization, and the purpose is to have a lending portfolio of at least Rs 5 lakh crore for this DFI in three years.

Asset Monetisation

Monetizing operating public infrastructure assets is an effective financing option for new infrastructure construction. A “National Monetization Pipeline” of potential Brownfield foundation assets will be originated. An Asset Monetization dashboard will also be designed for following the progress and to provide distinctness to investors.

Railway Infrastructure

Indian Railways have made a National Rail Plan for India – 2030. The Plan is to create a ‘future-ready’ Railway system by 2030. Taking down the logistic costs for our industry is at the core of our approach to enable ‘Make in India.’ The Western Dedicated Freight Corridor (DFC) and Eastern DFC will pass the approval by June 2022.

Union Budget 2021- Summary & Highlights
Indian Railways

Meanwhile, for Passenger convenience and safety, there are different reforms, and they are as follows:

a. Introduction of aesthetically created Vista Dome LHB coach on tourist routes to give customers a better travel experience.
b. The safety actions undertaken in the past few years have borne results. To further increase this effort, high-density network and highly employed network routes of Indian railways will be provided with an indigenously produced automatic train protection system that reduces train collision due to human error.
c. Budget also offered a recording sum of Rs. 1,10,055 crore, for Railways of which Rs. 1,07,100 crore is for capital expenditure.

Financial Capital

The Finance Minister suggested incorporating the requirements of Securities Contracts (Regulation) Act SEBI Act, 1992, Depositories Act, 1996, 1956, and Government Securities Act, 2007 into a rationalized single Securities Markets Code. The Government would encourage the development of a world-class Fin-Tech hub at the GIFT-IFSC.

Disinvestment and Strategic Sale

Besides  COVID-19, Government has kept working towards strategic disinvestment. The Finance Minister said several transactions: BPCL, Air India, Shipping Corporation of India, Container Corporation of India,BEML  IDBI Bank, Pawan Hans, NeelachalIspat Nigam restricted others would be created in 2021-22.

 Other than IDBI Bank, the Government proposes taking up the privatization of two Public Sector Banks and one General Insurance corporation in 2021-22. In 2021-22, the Government would also bring the LIC IPO, for which the requisite amendments will be made in this Session itself.

3. Inclusive Development for Aspirational India

Under the pillar of Inclusive Development for Aspirational India, the Finance Minister announced to cover Agriculture and Allied sectors, farmers’ welfare and rural India, migrant workers and labor, and financial inclusion.

Agriculture

Staying on agriculture, the Government promises the nation the welfare of farmers. The MSP regime has experienced a sea change to assure price that is at least 1.5 times the cost of making across all products. 

The acquisition has also continued to increase at a steady pace. This has increased payment to farmers considerably.

In wheat, the total amount paid to farmers in 2013-2014 was Rs. 33,874 crores. In 2019-2020 it was Rs. 62,802 crores, and even better, in 2020-2021, this amount, paid to farmers, was Rs. 75,060 crore.

Union Budget 2021- Summary & Highlights
Indian Agriculture.

On the other hand, the number of wheat growing farmers benefitted increased in 2020-21 to 43.36 lakhs than 35.57 lakhs in 2019-20.
For paddy, the price paid in 2013-14 was Rs. 63,928 crores. In 2019-2020, this developed to Rs.1,41,930 crore. Meanwhile, in 2020-2021, this is further expected to increase to Rs. 172,752 crore. The farmers helped increased from 1.24 crore in 2019-20 to 1.54 crore in 2020-21.

Although the agricultural reforms are currently in chaos, however, the Government is trying its best to sort it out.

Fisheries

Finance Minister stated substantial investments in the development of modern fishing piers and fish landing centers. The five principal fishing harbors – Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat – Thua it will be developing the marine economic activity.

Migrant Workers and Labourers

The Government has started the One Nation One Ration Card system through which recipients can claim their rations everywhere. One Nation, One Ration Card plan supports implementation by 32 states and UTs, reaching about 69 crore recipients. That’s’ a total of 86% beneficiaries covered. The living four states and UTs will be combined in the next few months.

Union Budget 2021- Summary & Highlights
Migrant Labourers During Lockdown

The Government aims to conclude a process that began 20 years ago, with the four labor codes’ implementation. For the first time globally, informative security benefits will extend to gig and platform workers. Minimum payments will apply to all workers’ categories, and they will all be treated by the Employees State Insurance Corporation. Women can work in all types and also in the night-shifts with sufficient protection. At the same time, the agreement burden on businesses will be at ease with a single certification and licensing, and online returns.

Financial Inclusion

To further facilitate confidence flow under the Stand Up India scheme for SCs, STs, and women, the Finance Minister suggested reducing the margin money requirement from 25% to 15% and including loans for agriculture activities. 

Besides, several steps are takne to strengthen the MSME sector, and in this Budget, Government has granted Rs. 15,700 crore to this sector – more than the substitute of this year’s BE.

4. Reinvigorating Human Capital

The Finance Minister said that the National Education Policy (NEP)  has had good reception. As more than 15,000 schools will opening this year to include all National Education Policy elements. She also said that 100 new Sainik Schools would be set up in conjunction with NGOs/private schools/states.

She also suggested setting up a Higher Education Commission of India as an umbrella body with four different standard-setting, accreditation, management, and funding vehicles. For accessible higher education in Ladakh, the Government proposed to set up a Central University in Leh.

Scheduled Castes and Scheduled Tribes Welfare

The Government has established 750 Eklavya model residential schools in tribal areas with an increase in each school’s unit cost from Rs. 20 crore to Rs. 38 crore.  At the same time, hilly and challenging locations, to Rs. 48 crore. Furthermore, under the  Post Matric Scholarship Scheme for Scheduled Castes’ welfare, the Central Assistance allocated  Rs. 35,219 crore for six years till 2025-2026, to benefit four crore SC students.

Union Budget 2021- Summary & Highlights
Budget 2021

Skilling

In partnership with the United Arab Emirates (UAE), an initiative is underway to benchmark skill requirements, assessment, and certification, conducted by a certified workforce’s deployment. Meanwhile the Government also has a joint Training Inter Training Programme (TITP) connecting India and Japan to promote Japanese technical and vocational skills, techniques, and knowledge. 

5. Innovation and R&D

In her Budget Speech of July 2019, the Finance Minister said that she had published the National Research Foundation. The NRF outlay would be Rs. 50,000 crore, over five years. Also, It will help the country’s overall research ecosystem to grow with a focus on identified national-priority thrust areas.

The Government will undertake a new initiative – National Language Translation Mission (NTLM). This will help the wealth of governance-and-policy-related knowledge on the Internet to be  available in major Indian languages.

6. Minimum Government, Maximum Governance

Settling on the last of the six pillars of the Budget, the Finance Minister proposed to take several steps to bring reforms in Tribunals in the previous few years for the speedy transfer of justice and offers to take further measures to rationalized the functioning of Tribunals.

 The Government has launched the National Commission for Allied Healthcare Professionals Bill in Parliament, intending to guarantee transparent and efficient regulation of the 56 allied healthcare professions.

 She also announced that the anticipated Census could be the first digital Census in India’s history, and for this impressive and milestone-marking task, Rs. 3,768 crore earmarked in the year 2021-2022.

On the Fiscal situation, she indicated that the pandemic’s impact on the economy appeared in a weak revenue inflow. Once the health condition is in pace, and the country in lockdown is slowly coming back on track, Government spending was ramped up to revive domestic demand.

 As a result against an original BE investment of Rs. 30.42 lakh crore for 2020-2021, RE measures are Rs. 34.50 lakh crore and quality of cost were reported. The capital expenditure, measured in RE, is Rs. 4.39 lakh crore in 2020-2021 as upon Rs. 4.12 lakh crore in BE 2020-21.

Union Budget 2021 Part B

The second part of the Union Budget 2021 includes taxes: direct taxes or indirect taxes:

Direct Tax Proposal

 

The Finance Minister presented relief to senior citizens in filing income tax returns, the reduced time limit for income tax measures, announced setting up of the Dispute Resolution Committee, faceless ITAT, leisure to NRIs, and an increase in the exemption limit from audit and relief for interest income.
She also announced steps to attract foreign financing into infrastructure, replacement to affordable housing and rental accommodations, tax incentives to IFSC, relief to small charitable trusts, and incentivizing startups.

Smt.Nirmala Sitharaman, in her Budget speech, said that post-pandemic, a new experience order appears to be improving, and India will have a leading role therein. In this scenario, she said our tax system has to be transparent, efficient and encourage investment and employment. On the other hand, the minister said that it should put the merest burden on our taxpayers.
She said that the Government had introduced a series of reforms to benefit taxpayers and the economy, including slashing the corporate tax rate, abolishing dividend distribution tax, and increasing allowance for small tax payers. The previous year, the income tax return filers saw an exciting increase to 6.48 crore from 3.31 crore in 2014.

Thus, The Budget suggests that details of capital gains from listed bonds, dividend income, and interest from the post office, bank, etc., will also be pre-filled to facilitate the filing of returns. Aspects of salary income, tax payment, TDS, etc., already come pre-filled in revenues.
Thus to reduce the agreement burden on the small charitable trust running educative institutions and hospitals, the Budget aims to increase the limit on annual receipts for these accounts from present Rs.1 Crore to Rs. 5 Crore for non-applicability of several agreements.

Indirect Tax Proposal

The Finance Minister presented relief to senior citizens in filing income tax returns, the reduced time limit for income tax measures, announced setting up of the Dispute Resolution Committee, faceless ITAT, leisure to NRIs, and an increase in the exemption limit from audit and relief for interest income.
She also announced steps to attract foreign financing into infrastructure, replacement to affordable housing and rental accommodations, tax incentives to IFSC, relief to small charitable trusts, and incentivizing startups.

Union Budget 2021- Summary & Highlights

Smt.Nirmala Sitharaman, in her Budget speech, said that post-pandemic, a new experience order appears to be improving, and India will have a leading role therein. In this scenario, she said our tax system has to be transparent, efficient and encourage investment and employment. On the other hand, the Minister said that it should put the merest burden on our taxpayers.

She said that the Government had introduced a series of reforms to benefit taxpayers and the economy, including slashing the corporate tax rate, abolishing dividend distribution tax, and increasing allowance for small tax payers. The previous year, the income tax return filers saw an exciting increase to 6.48 crore from 3.31 crore in 2014.

Also, The Budget suggests that details of capital gains from listed bonds, dividend income, and interest from the post office, bank, etc., will also be pre-filled to facilitate the filing of returns. Aspects of salary income, tax payment, TDS, etc., already come pre-filled in revenues.
Thus to reduce the agreement burden on the small charitable trust running educative institutions and hospitals, the Budget aims to increase the limit on annual receipts for these accounts from present Rs.1 Crore to Rs. 5 Crore for non-applicability of several agreements.

To sum up we can say Union Budget is a ray of hope to surf the wave of crisis.