As we all are aware that the Union Budget 2021 was declared yesterday. The Union Budget 2021 came up at a time when the Indian economy is reeling from the aftereffects of the COVID-19 crisis. Considering the backdrop of the farmers’ protest, there were a lot of expectations that Budget 2021 would consider the agriculture industry. There was a lot of talk about increasing the funding for the PM Kisan Yojana as well.
During her speech, our finance minister Nirmala Sitaraman declared the allotted amounts on different industrial sectors. An important aspect of Budget 2021 is this is the first paperless budget in the history of India. In short, the Government has allotted Rs. 2 crores for the healthcare sector, 35,000 crores on the COVID-19 vaccine, Rs. 1.10 lakh crore for the railways, and aims to complete 11,000 km of National Highway Infrastructure.
Apart from that, India has already approved two COVID vaccines – the Covaxin and Covishield. Soon, two more vaccines shall be launched. The good news is India has already initialized the nation-wide vaccination program. This is the largest in the world. The Budget 2021 also includes a new Aatmanirbhar Swstha Bharat Health Program of 64,180 crores. The intention is to reduce the use of single-use plastic, reduce air pollution and segregate the waste. This will come as an addition to the present National Health Mission.
The following are the 6 main pillars of the Union Budget 2021:
- Health & Well-Being
- Development of Aspirational India
- Innovation and R&D
- Improvement of Physical, Financial Capital, and Infrastructure
- India as a Human Capital
- Minimum Government & Maximum Governance
In the following section of the blog, we will share the key highlights of the Union Budget 2021-22.
Mission Poshan 2.0
The government will launch Mission Poshan 2.0, the Jal Jeevan Mission Urban. They will also deploy the Urban Swachh Bharat Scheme. The Budget 2021 includes Rs 1.4 lakh crore for this scheme.
The New Vehicle Scrapping Policy
The government launched a new vehicle scrapping policy. It is a voluntary scrapping policy where the outdated/unfit vehicles will be removed from the streets. The passenger vehicles which are beyond 20 years and also commercial vehicles which are beyond 15 years need to go through a vehicle fitness test.
Rs. 95,000 crore allotted for Road Development in Bengal
Finance Minister Nirmala Sitharaman announced that Rs. 95,000 crores has been allocated for the development of roads in Bengal. There is a lot of talks that this will have an impact on the upcoming election in 2021 in Bengal.
11,000 kms of National Highway Infrastructure
The government is aiming to complete 11,000 km of national highway infrastructure in 2021. Tamil Nadu will get a corridor of 3,500 km, Kerala gets 1,100 km, and also an investment of Rs. 65,000 crore. West Bengal will get 675 km which will also cost Rs. 95,000 crores. Assam has been promised 1,300 km in the next three years.
Indian Railways gets Rs. 1.10 Lakh Crore
Our Finance Minister mentioned that the Indian Railways will have Rs. 1010 lakh crore for infrastructure development. Rs. 1.7 lakh crore is the capital expenditure for the allotment. Also, she announced the central fiscal funding for Bangalore Metro, Kochi Metro, Chennai Metro, Nagpur Metro, and Nasik Metro projects throughout the nation.
The Power Sector gets Rs. 3.05 lakh crore
Rs. 3.05 lakh crore is allocated to the power sector of India. Finance Minister also said that Budget 2021 includes 100 more cities in the gas distribution network in the next three years.
Gas Pipeline Project in Jammu & Kashmir
Finance Minister announced a brand new gas pipeline project for developing Jammu & Kashmir.
Rs. 20,000 crore is alloted for the Public Sector Banks and the Launch of LIC IPO
The Public Sector Banks will have an additional amount of Rs. 20,000 crore funding. Also, the government is planning to sell a part of the holding from the Life Insurance Corporation of India (LIC) through an initial public offering (IPO) in 2021. There will also be an amendment of the present act to ease out the public offer.
Government commits to the Farmers Welfare
This is one of the most expected elements of the Union Budget 2021 because of the ongoing farmers’ protest. According to Finance Minister Nirmala Sitharaman, “the government is committed to the welfare of the farmers”. Also, the MSP has been changed. More than 75,000 crores were paid to the wheat farmers in 2020-21. 43.36 lakh farmers benefitted from this.
Ujjwala Scheme
The government is also extending its helping hand to the Ujjwala scheme for an additional 1 crore people. The Ujjwala scheme offers LPG connections along with a financial subsidy from the central government. Thus, this scheme already benefits more than 12 crore households right now. Also, this benefit will be given to offering a clean and cheap cooking fuel.
Agriculture Fund Credited with Rs. 16.5 lakh crore
The GOI has also proposed an increase in the agriculture credit with a target of 16.5 lakh crore. With the change in the MSP regime, the assured price is at least 1.5 times the production cost throughout all commodities. The overall amount paid to the paddy farmers is Rs. 1.72 lakh crore in 2020-21.
Disinvest Target at Rs. 1.75 Lakh Crore for FY2022
According to our Finance Minister, the disinvestment receipt is at Rs. 1.75 lakh crore for the fiscal year 2021 starting from April 1st. Two public sector banks, one general insurance company will be disinvested. Also, the legislation and amendments will be introduced in this session.
National Education Policy
With the Union Budget 2021, the National Education Policy attained a good reception. More than 15,000 schools will be qualitatively strengthened in the National Education Policy.
1500 Crore Alloted for Promoting Digital Payments
Nirmala Sitharaman also announced that Rs. 1500 crore will be allotted for the promotion of digital payments. Also, an additional amount of Rs. 300 crore is allocated to Goa for celebrating the 60th anniversary of the liberation from Portuguese rule.
Bengal & Assam Tea Workers Alloted with Rs. 1000 crore
The center has created a special scheme for the welfare of women and children in Bengal and Assam. Also, the government allotted Rs. 1000 crore for the tea workers of Bengal and Assam.
Rs. 3768 Crore Allotted for Census
The Finance Minister announced Rs. 3768 for the census. The next census that happens in India will be the first digital census in Indian history.
Tax Exemption for Senior Citizens & Startups
Also, there is an exemption for filing taxes for the elderly. In the 75th year of Independence, the compliance burden on the senior citizens will be reduced. For the senior citizens that only have a pension and interest scheme, the government proposed an exemption of filing of income tax returns.
There are new rules for the removal of double taxation from NRIs. Startups will also get a tax extension in the tax holiday for one more year. Coming to the GST, Sitharaman said that the government is focused to ease out the process. Customs duty on copper scrap will reduce to 2.5%. Also, there will be an increase in the customs duty on auto parts by 15%.
The Budget 2021 also includes “Textile Parks” developed in the next three years. The Railways can also monetize dedicated fright corridor assets for multiple operations and maintenance after commissioning. The center also offered Rs. 18,000 crore for the public buses. Solar Energy Corporation got Rs. 1000 crore and the Renewable Energy Development Department got Rs. 1500 crore.
The GOI will also support the development of a world-class fintech hub at GIFT. The Fiscal deficit estimation was at 9.5% of the GDP for 2020-21. The Fiscal deficit is estimated at 6.8% of the GDP. During her speech, she also proposed a portal for collecting info on gig-workers, construction workers, and builders. They will also enjoy the social security benefits.
Women will also be allowed to work night shifts with proper protection. To increase help towards the unorganized labor force, the GOI will launch a portal for collecting information on gig workers, building, and construction. This will help in formulating health, housing skill, insurance credit and food schemes for the migrant workers.
In Conclusion
According to the economic survey of 2020-21, the Indian economy is seen growing at 11%. However, the GDP growth rate is at minus 7.7% for the current fiscal year. This is the third budget under the NDA government led by PM Narendra Modi. Last year, the Finance Minister used the “Bahi Khaata”, which is also the red handmade ledger book.
Finance Minister Nirmala Sitaraman mentioned that the Budget 2021 is prepared in “unprecedented times”. She also thanked the essential workers who have continued to serve the country during the lockdown. She mentioned that India couldn’t imagine the health crisis that unfolded in 2020 when she presented the budget last year.
The budget proposals will also strengthen the “Sankalp of Aatmanirbhar Bharat”. The focus, this time is on the 6 main pillars. Also, there are 217 projects worth Rs. 1 lakh crore, which will come under the National Infrastructure Pipeline. She also mentioned that she will soon table a bill on the DFI to fill up the gap in the long-term finance for the infrastructure sectors.
