Union Budget 2021-22 : Focus on Atma Nirbhar Bharat

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The Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman departs from North Block to Rashtrapati Bhavan and Parliament House, along with the Minister of State for Finance and Corporate Affairs, Shri Anurag Singh Thakur and the senior officials to present the General Budget 2021-22,
  • It is the first ever Union Budget, digitally presented; Focus on Atma Nirbhar Bharat
  • Capital expenditure steeply increased to provide Rs 5.54 lakh crore.
  • Budget outlay for health and well being hiked by 137 percent to our 2. 23 crore rupees.
  • PM Atma Nirbhar Swasth Bharat Yojana to be launched to develop capacities in the health care system over 6 years.
  • FDI limit increased from 49 to 74 percent in the insurance companies; Foreign ownership and control allowed with safeguards.
  • Agricultural credit target enhanced to 16.5 lakh crore rupees in the next fiscal. 
  • Jal Jeevan Mission (Urban) to be launched to provide 2.86 crores household tap connections over next 5 years.
  • Sensex surges by over 1700 points; Nifty goes up by 500 points.
  • Fiscal deficit pegged at 6.8 per cent of GDP.
  • Tax holiday for start up extended for another year till March 2022.

New Delhi :Finance Minister Nirmala Sitharaman today presented the Union Budget 2021-22 with a wish to lay a vision of Atmanirbhar Bharat. She said, AtmaNirbharta is not a new idea. Ancient India was largely self-reliant, and equally, a business epicenter of the world. AtmaNirbhar Bharat is an expression of 130 crore Indians who have full confidence in their capabilities and skills.

The proposals will further strengthen the Sankalp of Nation First, Doubling Farmer’s Income, Strong Infrastructure, Healthy India, Good Governance, Opportunities for Youth, Education for All, Women Empowerment, and Inclusive Development, among others.

Senior citizens of 75 years of age and having only pension income are exempted from filing their income tax returns.

The budget proposals rest on six pillars of 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 and Maximum Governance.

To promote affordable housing in the country, the government has extended till 31st of March 2022, the eligibility for additional deduction of interest amounting to 1.5 lakh rupees for loan taken to purchase an affordable house. To keep up the supply of affordable houses, the Minister said that affordable housing projects can avail a tax holiday for one more year – till 31st of March, 2022.

Government has also allowed tax exemption for notified Affordable Rental Housing Projects for migrant workers.

To provide adequate credit to farmers, government has enhanced the agricultural credit target to 16.5 lakh crore rupees in next fiscal with focus on ensuring increased credit flows to animal husbandry, dairy, and fisheries.

Government has also enhanced the allocation to the Rural Infrastructure Development Fund from 30,000 to 40,000 crore rupees.

It has enlarged the scope of Operation Green Scheme to include 22 perishable products besides tomatoes, onions, and potatoes.

Government has also decided to integrate 1,000 more mandis with e-NAM to ensure transparency and competitiveness in agricultural market.

Agriculture Infrastructure Fund will be made available to APMCs for augmenting their infrastructure facilities.

A new centrally sponsored scheme, PM Atma Nirbhar Swasth Bharat Yojana, will be launched with an outlay of about 64,180 crores over 6 years. This will be in addition to the National Health Mission. 

To strengthen nutritional content, delivery, outreach, and outcome, the Supplementary Nutrition Programme and the Poshan Abhiyan will be merged and Mission Poshan 2.0 will be launched to improve nutritional outcomes across 112 Aspirational Districts.

Jal Jeevan Mission (Urban) will be launched to provide universal water supply in all 4,378 Urban Local Bodies with 2.86 crore household tap connections to be implemented over 5 years, with an outlay of Rs 2 lakh 87 thousand crore.

Urban Swachh Bharat Mission 2.0 to be implemented with a total financial allocation of over 1.41 lakh crores over a period of 5 years from 2021 to 2026.

To tackle the problem of air pollution Rs 2,217 crore will be provided for 42 urban centres.

Rs 35,000 crore rupee was already allotted for Covid-19 vaccine in budget estimate 2021-22; further funds to be provided, if required.

An increase of 137 percent provided from the Budget outlay for Health and Well being i.e. over Rs 2.23 lakh crore rupee as against this year’s budget estimate of Rs 94,452 crore.

To make the nation a 5 trillion US dollar economy, the government has committed nearly Rs 1.97 lakh crore, over 5 years starting Financial year 2021-22.

Mega Investment Textiles Parks (MITRA) will be launched in addition to the Production Linked Incentive scheme to create world class infrastructure in exports. Seven Textile Parks to be established over 3 years.

A professionally managed Development Financial Institution will be set up to provide, enable and to act as catalyst for infrastructure financing. A sum of Rs 20,000 crore rupee to be provided to capitalise this institution.

A “National Monetization Pipeline” of potential brown field infrastructure assets will be launched to provide visibility to investors.

Capital expenditure steeply increased to provide Rs 5.54 lakh crores which is 34.5 per cent more than the Budget Estimate of 2020-21. Over and above this expenditure, more than Rs 2 lakh crore is to be provided to States and Autonomous Bodies for their Capital Expenditure. 

By March 2022, another 8,500 kms will be awarded to complete an additional 11,000 kms of national highway corridors.

An enhanced outlay of over Rs 1.18 lakh crores for Ministry of Road Transport and Highways is provided of which over Rs 1.08 lakh crore is for capital, the highest ever. 

Indian Railways have prepared a National Rail Plan for India – 2030 to create a ‘future ready’ Railway system by 2030; It is expected that Western Dedicated Freight Corridor (DFC) and Eastern DFC will be commissioned by June 2022.

A record sum of over Rs 1.10 lakh crore rupee is provided for Railways of which over Rs 1.07 lakh crore is for capital expenditure.

A new scheme will be launched at a cost of Rs 18,000 crore rupee to support augmentation of public bus transport services.

Two new technologies – ‘MetroLite’ and ‘MetroNeo’ will be deployed to provide metro rail systems in Tier-2 cities and peripheral areas of Tier-1 cities. 

A revamped power distribution sector scheme will also be launched with an outlay of over 3.05 lakh crores over 5 years.

A Hydrogen Energy Mission will be launched in 2021-22 for generating hydrogen from green power sources as announced by the Prime Minister Narendra Modi in November 2020.

Seven projects worth more than Rs 2,000 crore will be offered by the Major Ports on Public Private Partnership mode in Financial Year 21-22 to move major ports from managing their operational services on their own to a model where a private partner will manage it for them.

To generate an additional 1.5 lakh jobs, efforts will be made to bring more ships to India from Europe and Japan for recycling with a capacity of around 4.5 Million Light Displacement Tonne (LDT) which will be doubled by 2024.

An additional deduction of interest amounting to 1.5 lakh for loan taken to purchase an affordable house to be extended for one more year.

Time-limit for re-opening of assessment of income tax proposed to be reduced to 3 years from the present 6 years.

To further reduce litigation for small taxpayers, it is proposed to constitute a Dispute Resolution Committee which will be faceless. Anyone with a taxable income up to 50 lakh and disputed income up to  10 lakh shall be eligible to approach the Committee.

A National Faceless Income Tax Appellate Tribunal Centre to be set up. Communication between the Tribunal and the appellant shall be electronic and personal hearing if needed, it is proposed to be done through video-conferencing.

Rules for removing hardship of double taxation of NRIs will be notified. To incentivise digital transactions and reduce compliance burden, it is proposed to increase the limit for tax audit from Rs 5 crore to  Rs 10 crore.

In order to incentivise start-ups in the country, Government has extended the eligibility for claiming tax holiday for start-ups by one more year – till 31stof March, 2022. The Government has also extended the capital gains exemption for investment in start-ups by one more year – till 31stof March, 2022 to incentivise funding of the start-ups.

Government has increased FDI limit from 49 to 74 per cent in Insurance Companies and allowed foreign ownership and control with safeguards. Under the new structure, the majority of Directors on the Board and key management persons would be resident Indians, with at least 50% of Directors being Independent Directors, and specified percentage of profits being retained as general reserve.

Government has proposed to infused 20 thousand crore rupees to re-capitalized Public Sector Banks. 

To tackle the stressed asset of Public Sector Banks, an Asset Reconstruction Company and Asset Management Company will be set up to consolidate and take over the existing stressed debt and then manage and dispose of the assets to Alternate Investment Funds.

Government plans to complete strategic disinvestment in BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam limited among others in the next fiscal. Other than IDBI Bank, government will also take up the privatization of two Public Sector Banks and one General Insurance company in the year 2021-22. A Bill in this regard will be introduced in the Budget session of Parliament itself.

To fast forward its disinvestment policy, Government has asked NITI Aayog to work out on the next list of Central Public Sector companies that would be taken up for strategic disinvestment. Government will also bring the IPO of LIC.

To give a boost to fisheries in the country, government has proposed substantial investments in the development of modern fishing harbours and fish landing centres. To start with, 5 major fishing harbours – Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat – will be developed as hubs of economic activity. It will also develop inland fishing harbours and fish-landing centres along the banks of rivers and waterways.

The Finance Minister informed that One Nation One Ration Card plan is under implementation by 32 states and UTs, reaching about 69 crore beneficiaries, covering 86 per cent of total beneficiaries. She said the remaining 4 states and UTs will be brought under One Nation One Ration Card plan in next few months.

Government has decided to extend social security benefits to gig and platform workers for the first time. Minimum wages will apply to all categories of workers, and they will all be covered by the Employees State Insurance Corporation. Women will be allowed to work in all categories and also in night-shifts with adequate protection. At the same time, compliance burden on employers will be reduced with single registration and licensing, and online returns.

To further facilitate credit flow under the scheme of Stand Up India for SCs, STs, and women, Government has reduced the margin money requirement from 25 to 15 per cent, and to also include loans for activities allied to agriculture.

The government has also taken a number of steps to support the MSME sector. It has provided 15,700 crore rupees to this sector in the next fiscal, more than double of this year’s Budget Estimates.

In School Education, more than 15,000 schools will be qualitatively strengthened to include all components of the National Education Policy.

These schools will emerge as exemplar schools in their regions, handholding and mentoring other schools to achieve the ideals of the Policy.

Government will also set up 100 new Sainik Schools in partnership with NGOs, private schools and states.

Government will bring Legislation this year to set up Higher Education Commission of India. It will be an umbrella body having 4 separate vehicles for standard-setting, accreditation, regulation, and funding.

Government will also set up a Central University in Leh to ensure access to higher education in Ladakh.

Government has allocated Rs 35,219 crore for the Post Matric Scholarship Scheme till 2025-2026, to benefit 4 crore SC students.

It has also increased the unit cost of Eklavya Model Residential Schools in tribal areas from Rs 20 to Rs 38 crore and that of Rs 48 crore in hilly and difficult areas. This would help in creating robust infrastructure facilities for tribal students.

Government has decided to set up National Nursing and Midwifery Commission to ensure transparency, efficiency and governance reforms in the nursing profession. The Government will bring a Bill in this regard.

The Finance Minister has provided Rs 1,000 crore for the welfare of Tea workers especially women and their children in Assam and West Bengal. A special scheme will be devised for the same.

Government has allocated 3,768 crore rupees for the forthcoming Census, which will be the first digital census in the history of India.

To give a further boost to the non-conventional energy sector, Government has provided additional capital infusion of Rs 1,000 crore to Solar Energy Corporation of India and Rs 1,500 crore to Indian Renewable Energy Development Agency. 

Government has also decided to revise the definition under the Companies Act, 2013 for Small Companies by increasing their thresholds for Paid up capital from not exceeding Rs 50 Lakh rupee to not exceeding Rs 2 Crore and turnover from not exceeding Rs 2 Crore to not exceeding Rs 20 Crore . This will benefit more than two lakh companies in easing their compliance requirements.

Fiscal deficit for the financial year 2021-22 pegged at 6.8 percent. The Total resources being transferred to the states including the devolution of states share, grants, loans and releases under centrally sponsored scheme etc in budget estimate for the fiscal is 13 lakh 88 thousand 502 crore rupees which shows an increase of 74 thousand 565 crores over revised estimate of 2020-21.

3,500 km of National Highway works in the state of Tamil Nadu at an investment of Rs 1.03 lakh crore has been proposed. These include Madurai-Kollam corridor, Chittoor-Thatchur corridor. Construction will start next year.

1,100 km of National Highway works in the State of Kerala at an investment of Rs 65,000 crore has been proposed. This includes 600 km section of Mumbai-Kanyakumari corridor in Kerala. 675 km of highway works in the state of West Bengal also announced at a cost of Rs 25,000 crore including upgradation of existing road-Kolkata – Siliguri.

National Highway works of around RS 19,000 crore are currently in progress in the State of Assam. Further works of more than Rs 34,000 crore covering more than 1300 kms of National Highways will be undertaken in the State in the coming three years.

The Finance Minister said, the domestic electronic manufacturing has grown rapidly. We are now exporting items like mobiles and chargers. For greater domestic value addition, a few exemptions on parts of chargers and sub-parts of mobiles are being withdrawn. Further, some parts of mobiles will move from ‘nil’ rate to a moderate 2.5 per cent.

The customs duty rates on chemicals have been calibrated to encourage domestic value addition and to remove inversions. Apart from other items, customs duty on Naptha to 2.5 per cent is being reduced to correct inversion.

Gold and silver presently attract a basic customs duty of 12.5 per cent. Since the duty was raised from 10 per cent in July 2019, prices of precious metals have risen sharply. To bring it closer to previous levels, custom duty on gold and silver is being rationalized.

The Finance Minister narrated  Rabindranath Tagore’s quotation “Faith is the bird that feels the light and sings when the dawn is still dark,”.

SMART GOVERNANCE DESK

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