#TILUnionBudget2021/ Finance Minister Nirmala Sitharaman’s announcements for Union Budget in her Union Budget 2021-22 speech in Parliament.
- Finance Minister Sitharaman begins her Budget 2021 speech by recounting the unprecedented circumstances through which the nation and the world had to go through and recognising the service rendered by Covid Warriors during the crucial months of the pandemic.
- The PM Garib Kalyan Yojana, the three Aatma Nirbhar Bharat packages and subsequent announcements were like five mini-budgets in themselves. The total financial impact of all Aatma Nirbhar Bharat packages, including measures taken by RBI, was about 27.1 lakh crore, or more than 13% of GDP, says FM Sitharaman.
- The preparation of this Budget was undertaken in circumstances like never before, in view of calamities that have affected a country or a region within a country. But what we have endured with Covid-19 in 2020 is Sui generis: FM Sitharaman.
- Finance Minister Sitharaman recalls the words of Tagore in her speech: “Faith is the bird that feels the light and sings when the dawn is still dark,” she says, 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.
- Finance Minister Sitharaman has kept the Budget’s focus on health, and promised an outlay of Rs 35,000 for Covid vaccine development, saying more funds will be allocated as the need arises.
- The Budget 2021 proposals rest on six pillars Health and Well-Being; Physical and Financial capital and infrastructure; Inclusive Development for Aspirational India; Reinvigorating Human Capital; Innovation and R&D; Minimum government, maximum governance.
- Introduction of Aatmanirbhar health programme with an outlay of Rs 64,180 cr; this in addition to the national health mission. Swachh Bharat 2.0 will be implemented with outlay of Rs 1,41,678 cr over 5 years. Jal Jeevan mission with outlay of Rs 2.87 lakh crore for 4,378 urban local bodies.
- Finance Minister Nirmala Sitharaman has announced a capital expenditure of Rs 5.54 lakh crores for 2021-21, an increase of over 33% over the previous year’s allocation. Other allocations/announcements made by Finance Minister Sitharaman are:
- PLI scheme with outlay of Rs 1.97 lakh crore for 5 years starting this fiscal. A scheme of mega investment textiles park in addition to PLI scheme will be launched. Government to introduce bill to set up development financial institution with an outlay of Rs 20,000 cr. National monetisation pipeline for potential brownfield infrastructure assets will be launched.
- Pipelines of GAIL (India) Ltd, Indian Oil Corp (IOC) and HPCL will be monetised. Railway to monetise dedicated freight corridors. Voluntary vehicle scrapping policy to phase out old vehicles; fitness tests after 20 yrs for personal vehicles. Rs 2,217 crore has been allocated for 42 urban centres with million-plus population to tackle burgeoning problem of air pollution, announces FM Sitharaman.
- Over 13,000 km length of roads at a cost of Rs 3.3 lakh cr has already been awarded under Rs 5.35 lakh cr Bharatmala project of which 3,800 kms have been constructed. By March 2022 we’d be awarding another 8,500 km and complete an additional 11,000 km of National Highway Corridor, says FM Sitharaman.
- She allocates Rs 65,000 cr for road, highway projects in Kerala, and Rs 3,400 cr for Assam, and Rs 25,000 cr for road projects in poll-bound West Bengal.7 port projects worth more than Rs 2,000 cr via PPA mode. 100 pc electrification of broad gauge rail tracks by December 2023. Rs 18,000 cr scheme to augment public transport in urban areas.
- City gas distribution network of providing CNG to automobiles and piped cooking gas to households in 100 more districts. Framework will be put in place to allow electricity consumers to choose from more than one distribution company. Asset reconstruction and management company to be set up for stressed assets of banks. FDI in insurance increased to 74 pc from 49 pc.
- Government proposes further recapitalisation of State-owned banks; earmarks Rs 20,000 crore. Free cooking gas LPG scheme Ujjwala to be extended to 1 cr more beneficiaries. Scheme of Mega Investment Textile Parks to be launched, in addition to PLI scheme, to create world class infra in textile sector, with plug-and-play facilities, to create global export champions. 7 textile parks to be set up over 3 years Barring four strategic areas, PSUs in other sectors will be divested, says FM announcing the government’s new disinvestment policy.
- Two PSBs and one general insurance company to be divested, legislations amendments to be introduced in this session. FM says NITI Aayog to be asked to work on the next list of central public sector companies for disinvestment. Disinvestment receipts put at Rs 1.75 lakh cr for fiscal year beginning April 1, 2021. BPCL, Air India, Shipping Corp, Container Corp and other disinvestments will be completed in 2021-22, announces FM Sitharaman. Definition of small companies to be revised by raising capital base to Rs 2 cr from current limit of Rs 50 lakh.
- Agri infra fund would be made available to APMCs to augment infrastructure facilities. Agriculture credit target raised to Rs 16.5 lakh cr in 2021-22The finance minister announced that the fiscal deficit in pandemic-hit 2020-21 will be 9.5% of GDP. She estimated the fiscal deficit in 2021-22 at 6.8% of GDP, and expected it to return to normal range by 2023-24.Deep ocean mission with outlay of more than Rs 4,000 cr over five years proposed.
- Rs 3,726 cr allocated for forthcoming Census, which will be the first digital census. Conciliatory mechanism to be set up for quick resolution of contractual disputes. Government cuts timeline for reopening of tax cases to 3 yrs from 6 yrs. However, serious tax offences of concealment of income of over Rs 50 lakh can be reopened after 10 years, announces FM Sitharaman.
- Senior citizens above 75 years with only pension income exempted from filing income tax returns. Banks to deduct the tax on pension paid to them, announces FM Sitharaman. Finance Minister Nirmala Sitharaman concludes her budget speech. The highlights of the budget are increased allocation for health, capital expenditure. She also did not touch the direct tax slabs.
- Finance Minister Nirmala Sitharaman on Monday said the government estimates fiscal deficit of 6.8 per cent of the gross domestic product (GDP) in the next financial year beginning April 1. However, the fiscal deficit in 2020-21 is estimated to soar up to 9.5 per cent due to rise in expenditure on account of the outbreak of Covid-19 and moderation in revenue during this fiscal year. The lockdown to check the spread of virus adversely impacted the economic activities resulting in contraction in the economy by an estimated 7.7 per cent.
- For the current fiscal year, the government had earlier pegged the fiscal deficit of 3.5 per cent. While unveiling the Budget 2021-22 in the Lok Sabha, the finance minister said, the government proposes to bring down the fiscal deficit below 4.5 per cent of GDP by 2025-26.
- Fiscal deficit is an indication of the government’s borrowing to meet the shortfall between expenditure and receipts from taxes and other sources. The deficit had soared to a high of 4.6 per cent of the GDP in 2019-20, mainly due to poor revenue realisation. The finance minister said the government plans to borrow Rs 80,000 crore during the residual two months of the current fiscal year.
