Video Editor: Puneet Bhatia
Finance Minister (FM) Nirmala Sitharaman on Monday, 1 February, presented the Union Budget 2021-22.
The presentation of the Budget comes in the shadow of the coronavirus pandemic and its repercussion on the economy, which is facing its worst contraction since 1952.
The budget this year was based on six pillars, said the finance minister:
Ramped Up Healthcare Spending
The health budget witnessed a massive jump by nearly 137 percent at Rs 2,23,846 crore.
- PM Atmanirbhar Swasth Bharat Yojana will be launched with an outlay of over Rs 64,000 crore over six years to strengthen health infrastructure
- An additional vaccine fund of Rs 35,000 crore announced
- The finance minister said that the fight against COVID will continue well into 2021 and identified health and well-being as one of the six pillars of the budget.
Chants of 'repeal the farm laws' could be heard in the Parliament on Monday as Finance Minister Nirmala Sitharaman presented the Union Budget and said, “Our government is committed to the welfare of farmers.”
She further said:
- The MSP regime now assures price that is at least 1.5 times the cost of production across all commodities
- The agriculture credit target has been raised to Rs 16.5 lakh crore in 2021-22
- Allocation to rural infrastructure has been increased to Rs 40,000 crore in the next fiscal from Rs 30,000 crore in the current fiscal
- One thousand more mandis to be integrated with electronic national market
The defence budget has been increased marginally to Rs 4.78 lakh crore, including pensions, for 2021-22 from Rs 4.71 lakh crore last year.
- Rs 1.35 lakh crore has been set aside for capital outlay to purchase new weapons, aircraft, warships and other military hardware
- The total revenue expenditure, which includes expenses on payment of salaries and maintenance of establishments, has been pegged at Rs 3.37 lakh crore.
The fiscal deficit, which indicates the gap between total revenue and total expenditure, has been pegged at:
- 9.5 percent of the GDP for Financial Year 2021
- 6.8 percent for the Financial Year 2022
The finance minister said another Rs 80,000 crore would be necessary for which the government will be approaching the markets in these 2 months. She also said fiscal deficit will be brought down to 4.5 percent by FY26.
Senior Citizens Above 75 Exempted from Filing ITR
Finance Minister Nirmala Sitharaman proposed an exemption from filing Income Tax returns for senior citizens aged 75 years and above who rely on pension and interest income.
Meanwhile, the finance minister also proposed:
- To reduce time limit for reopening of tax records to three years from six years
- To set up faceless dispute resolution committee for individual taxpayers
- To make Income Tax Appellate Tribunal faceless
- To extend eligibility of provision for additional deduction of Rs 1.5 lakh for loans taken to purchase affordable housing by one more year
- Employers making late payment of employees’ contribution of retirement schemes will not be allowed tax deduction
- Exemption from tax audit limit doubled to Rs 10 crore turnover for companies doing their business through digital mode
The income tax slab however remain unchanged for the financial year 2021-22.
Rail and Road Infrastructure
Finance Minister Nirmala Sitharaman said that the Indian Railways has prepared a National Rail Plan for India 2030. She further informed:
- A record sum of Rs 1,10,055 crore is being provided for the Railways, out of which Rs 1,07,100 crore is for capital expenditure only
- The National Rail Plan aims to create a future-ready railways system by 2030
- Indian Railways will monetise dedicated freight corridors
- Metrolite and Metroneo technologies will be brought into tier-two cities and along the periphery of tier-one cities
- 100 percent electrification of broad gauge rail routes will take place by 2023
In her budget speech, Finance Minister Nirmala Sitharaman said 8,500 km of road and highway projects will be awarded by March 2022. She also informed:
- Outlay of Rs 1.18 lakh crore for Ministry Of Road Transport And Highways
- An additional 11,000 km of the National Highway Corridor will be completed to augment road infrastructure, with corridors in Tamil Nadu, Kerala, West Bengal and Assam.
FDI and Disinvestments
The FM has also shared plans of privatising two public sector banks (PSUs) and one general insurance company in the Financial Year 2022.
- Foreign Direct Investment in insurance to increase from 49% to 74%
- Initial public offering (IPO) of LIC will be brought in Financial Year 2022
- The Finance Ministry also plans to complete the divestments of BCL, CONCOR and SCI in 2021-22
- Except for four strategic areas, PSUs in other sectors to be divested
To further consolidate the financial capacity of PSBs, further recapitalisation of Rs 20,000 crore is proposed in 2021-22, the finance minister said.
Nirmala Sitharaman allocated Rs 93,224 crore to the education sector, outlining plans for expansion of schools and research centres with an emphasis on the National Education Policy.
- Central University in Leh, to provide “accessible higher education” for those in Ladakh
- Strengthening the foundation for early defence training, 100 new Sainik Schools will be established in partnership with NGOs and states
- Heavy focus on National Education Policy 2020, over 15,000 schools to be ‘qualitatively strengthened’ to imbibe all elements of NEP 2020
Women Allowed to Work Night Shifts in All Sectors
Finance Minister Nirmala Sitharaman announced that women will be allowed to work in all sectors and in night shifts, with adequate safety. She added that social security benefits will be extended to gig and platform workers.
However, women being allowed to work in night shifts was already notified by the Centre as a part of Occupational Safety, Health and Working Conditions Code (Central) Rules, 2020.
Further, Sitharaman, among other things, said:
- The consent of women employee shall be taken
- No women shall be employed against the maternity benefit provisions laid down under the Social Security Code, 2020 (36 f 2020)
- Adequate transportation facilities shall be provided to women employees – to pick-up and drop such employee at her residence
- The workplace including passage towards conveniences or facilities concerning toilet, washrooms, drinking water, entry and exit of women employee should be well-lit
- In case of below ground mine, not less than three women employees shall be on duty at any place
- A Rs 1,000 crore scheme has been put in place for tea workers – especially for women and children in Assam and West Bengal
Agriculture Infrastructure and Development Cess
The FM announced the imposition of Agriculture Infrastructure and Development Cess (AIDC) for multiple commodities. These include:
- Rs 2.5 per litre on petrol and Rs 4 per litre on diesel.
- 2.4% of gold, silver and dore bars
- 35% on apples
- 30% on Kabuli chana
- 10% on peas
- 50% on Bengal gram/chick peas
- 20% on lentil
- 5% on cotton
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