What Budget 2021 Have to Boost Economy?
Finance Minister Nirmala Sitharaman unveils her third Union Budget on 1st February 2021 at 11:00 hours in the parliament session. The Budget 2021 influenced by the Covid 19 crisis, has been aimed to get India back on track as the world’s fastest-growing major economy by boosting job creation and rural development.
Union Finance Minister Nirmala Sitharaman made several important announcements in budget 2021. The budget was aimed to emphasis more on healthcare to infrastructure this time. In the budget 2021, no particular relief has been provided to the middle class in terms of income tax exemption. As a piece of great news, she announced that Senior citizens above 75 years of age are exempted from filing tax returns, with a pension as a source of income. FM Sitharaman shared the plan of the central government to borrow around Rs 12 lakh crore in FY22. The government’s expenditure is pegged at Rs 34.83 lakh crore, including Rs 5.54 lakh cr of capital spending, she added. She said the fiscal deficit for FY21 has been pegged at 9.5 per cent of India’s GDP due to Covid-19, which is highest so far.
Whart are the six pillars of budget 2021?
FM Nirmala Sithraman lays the foundation of the budget 2021 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 Govt., Maximum Governance
How Budget 2021 Give Boost to Health Care Sector?
FM Nirmala Sitharaman said the investment on health infrastructure in Budget 2021 has increased substantially. She further added “three areas – preventive health, curative health and well-being – to be strengthened during the current year,” she adds.
Under this sector, ‘Atmanirbhar Swasth Bharat Yojana’ will be launched with an expense of 64,180 crores over 6 years. The budget 2021 proposes a sharp increase in Capital Expenditure at Rs 5.54 lakh crores which is 34.5% more than in Budget 2020-21. The government plan to provide an amount of Rs. 2 Lakh crore to states & other bodies, so that they could meet the capital requirements.
Further, the ‘Jal Jeevan Mission Urban’ will be launched in 2021 having an aggregate expenditure of Rs. 2.87 lakh crore over 5 years. This project will aim at Universal water supply in 4,378 urban local bodies including 2.86 crore household tap connection with liquid waste management in 500 AMrut cities.
Healthcare Budget Key Highlights
- ₹64,180 crore For Atmanirbhar Swasth Bharat Yojana over six years
- ₹35,000 crore For Covid-19 vaccine in FY22
- Rs. 2,34,846 crore for the health care sector
How Budget 2021 Effect Physical & Financial Capital Infrastructure in 2021?
Fm Nirmala Sitharaman announces a budget of over Rs. 1.1 Lakh crore to railways. The government plans to provide 8,500 km of road and highway projects by the end of March 2022 to further develop road infrastructure. FM Sitharaman allocates Rs 65,000 cr for road, highway projects in Kerala, Rs 3,400 cr for Assam, Rs 25,000 cr for Kolkata, Rs 18,000 cr for developing public transport in urban areas
Nirmala Sitharaman, Finance Minister of India further adds, “The central government plan to monetise the pipelines of GAIL (India) Ltd, Indian Oil Corp (IOC) and HPCL”.
Infrastructure Budget Key Highlights
- ₹1.41 lakh crore for Urban Clean India Mission
- Budget proposes voluntary Vehicle Scrappage Policy
- Outlay of ₹1.18 lakh crore for Ministry of Road Transport and Highways
- ₹1.1 lakh crore for Railways in FY22
Inclusive Development for Aspirational India- Budget 2021
FM announces the increase in the percentage of foreign direct investment (FDI) in insurance from 49 percent to 74 percent. FM also outlay a capital of Rs. 20,000 crore for further development of state-owned banks.
The government will work toward strengthening the NCLT framework. The finance minister added, the government will revise the definition of small companies by raising the capital base from Rs. 50 Lakh to Rs. 2 Crore. Asset reconstruction & management company will be built to help retrieve the stressed assets of banks.
FM announces the new disinvestment policy during budget 2021. NITI Aayog will be working on disinvestment for the list of central public sector companies.
Key Highlights for Inclusive Development of Aspirational India
- Government to set up a new Development Financial Institution
- NHAI and PGCIL to set up INVITs to attract global funds
- Proposal for New Rationalised Securities Markets Code
- ₹20,000 crore for Bank recapitalisation
How much budget allocate to agriculture sector in Budget 2021?
‘Government is committed to farmer’s welfare’ said FM Nirmala Sitharaman. Centre’s MSP procurement scheme will benefit over 43.36 lakh wheat-growing farmers, which was previously 35.57 lakh. Agriculture credit target has been increased to Rs. 16.5 lakh crore in 2021-22. A budget of Rs 40,000 crore is allocated for Rural Infra Development.
FM Niramal Sitharaman announces the development of the following:
- Operation Green Scheme will cover 22 more projects.
- 5 major fishing hubs will be developed
- Over 1000 Mandis will be digitized & integrated into the electronic national market.
- Agri infra fund will be made available to APMCs
- Rs. 40,000 crore for Agri Infra Fund
- Rs. 10,000 cr for Micro Irrigation Corpus’
- One Nation One Ration Card plan will be implemented in 32 states & 1 UT
- Central University to be set up in Leh
Reinvigorating Human Capital Budget 2021
The centre plans to amend apprenticeship law to create more working opportunities for youth. Modalities have been worked out for national research foundation. The Centre has earmarked Rs 50,000 crore over five years.
FM Nirmala Sitharaman says in the RE 2020-21, 9.5 per cent of India’s GDP is the fiscal deficit that has been pegged, while the fiscal deficit in BE 2021-22 is pegged at 6.8 per cent. The central government is aiming to bring it down to less than 5 per cent of the GDP by 2025-26, says FM.
The upcoming census would be the first-ever digital census in India. “For this monumental task, I have allocated 3,768 crores in this year 2021-22,” says FM Sitharaman. Over Rs 3,726 crore allocated for this monumental task.
FM Nirmala Sitharaman announced the central government is to borrow Rs. 80,000 cr in next 2 months to meet FY 21 expenditures because the COVID-19 relief has spent Rs. 34.50 lakh crore. The government will borrow Rs. 12 lakh crore in FY 22.
Highlights of Tax Redemption
- The senior citizen above the 75 yr of age & getting only pension as income is exempted for filing a tax return.
- Govt will review over 400 old exemptions in indirect taxes
- In view of Covid, the Tax holiday for startups is extended by 1 year
- For startups, Exemption on capital gains on investment is extended by 1 year
- Tax exemption for aircraft leasing companies
- Tax exemption for notified affordable housing for migrant workers
- For affordable housing, Rs 1.5 lakh deduction on payment of interest is extended by 1 yr
- Government proposes to relax norms for foreign investments in the infrastructure sector to attract more foreign investment
- Advance tax liability on dividend income shall arise only after payment of dividend
- For companies doing business using digital modes, exemption from tax audit limit will be doubled to Rs 10 crore turnover
- 41 per cent tax share will be given to States as per 15th Finance Commission recommendation
Union Finance Minister Nirmala Sitharaman announced AIDC cess to be imposed on petrol & diesel. Agriculture Infrastructure and Development Cess of Rs 2.5 per litre on petrol and Rs 4 per litre on diesel are imposed to improve agricultural infrastructure in the country. But she assures that this imposing cess will not affect the end consumer. “An Agriculture Infrastructure and Development Cess (AIDC) of Rs 2.5 per litre has been imposed on petrol and Rs 4 per litre on diesel. Overall there would be no additional burden on the consumer,” she said.
What PM Narender Modi said on Union Budget 2021?
PM Narender Modi addressed, this Budget 2021 focuses on increasing farmers’ income, health care, several measures have been taken in this direction. Provision has been introduced for Farmers to get loans easily. “Provisions have been made to strengthen APMC markets with the help of Agriculture Infrastructure Fund,” says PM Modi.
- Budget will further strengthen APMC Mandis via AIF
- Budget is inclined to MSMEs to boost growth and create jobs for youth
- Budget focuses on empowering agriculture, enhancing farmers’ growth
- Overall budget for all-round development of India
- Budget aims to provide new growth opportunities for youth
- Budget boost to infra, structural reforms will create major growth
Union Budget 2021-22 PDF's
|Budget at a Glance|
|Transfer of Resources to States and Union Territories with Legislature|
|Outlay on Major Schemes|
|Statement I - Consolidated Fund of India|
|Revenue Account - Receipts|
|Revenue Account - Disbursements|
|Capital Account - Receipts|
|Capital Account - Disbursements|
|Statement IA - Disbursements 'Charged' on the Consolidated Fund of India|
|Statement II - Contingency Fund of India - Net|
|Statement III - Public Account of India|
|Receipts & Expenditure of Union Territories without Legislature|
|Budget Highlights (Key Features)|
|Abstract of Receipts|
|Summary of Estimates of Tax, Non-Tax Revenue and Capital Receipts|
|I. Tax Revenue|
|II. Non-Tax Revenue|
|III. Capital Receipts|
|1. Trends in Receipts|
|2. Analysis of Tax and Non-Tax Revenue Receipts included in Annexure 1|
|3. Reconciliation between estimates of Receipts shown in Annual Financial Statement and Receipts Budget|
|4. Statement showing State-wise Distribution of Net Proceeds of Union Taxes and Duties for BE 2020-2021|
|4A. Statement showing State-wise Distribution of Net Proceeds of Union Taxes and Duties for RE 2019-2020|
|4B. Statement showing State-wise Distribution of Net Proceeds of Union Taxes and Duties for Actual 2018-2019|
|5. Tax Revenues raised but not realised (Principal Taxes)|
|6. Arrears of Non-Tax Revenue|
|7. Revenue impact of Tax Incentive under the Central Tax System: Financial Years 2018-19 and 2019-20|
|8. Sources and Application of National Small Savings Fund as on 31st March, 2020|
|PART-B ASSET AND LIABILITY STATEMENTS|
|1. Debt position of the Government of India|
|Demands for Grants of Central Government||Link|
|D.O. Letter from JS(TRU-I)|
|The Macro Economic Framework Statement|
|The Macro Economic Framework Statement|
|Medium Term Fiscal Policy cum Fiscal Policy Strategy Statement|
|Medium Term Fiscal Policy cum Fiscal Policy Strategy Statement|
|Output Outcome Framework for Schemes 2020-2021|
|Output Outcome Framework for Schemes 2020-2021|
Key Takeaway on Budget 2021 Highlights
Finance Minister Nirmala Sitharaman presented her third Union Budget in 2021 which is aimed at building infrastructure, including roads, ports, power generations etc. The budget 2021 for the fiscal year 2021-22 aims at creating better health infrastructure, job opportunities for youth and boosting farmer’s income. Overall the thought behind presenting this budget was all about giving great impetus to the economy, especially after the COVID-19 crisis.
Click To Download UNION BUDGET 2021 MOBILE APP
Budget Expectations 2021 – What Indians Expected in Budget 2021?
Budget 2021 Expectations: Just 1 Day to go for the Union Budget 2021. The main concern of Budget 2021 is the severe impact of COVID-19 on the Indian Economy in the last year (2020). The Hon’ble Finance Minister Nirmala Sitharaman going to present her 3rd Union Budget on February 1, 2021.
Before presenting the annual budget of 2021, the finance minister will be launching the “union budget mobile app” today for creating ease of access to budget documents by MPs and as well as for the general public.
All market experts, economists, and financial experts, including the common people of the country, are keeping a close eye on the budget table in Lok Sabha today.
- From Budget 2021, the government is expected to make some special provisions in income tax to encourage eco-friendly electric vehicle (EV) unit operations.
- Logistics is currently one of the most important sectors for generating employment. Therefore, in Budget 2021, the government is expected to create a thriving ecosystem for logistics.
- The HPC- High-Performance Computing sector made a huge contribution during the epidemic, from education, agriculture, electronics to IT companies. It is expected that the government will provide an awesome plan and fund for the progress of the HPC sector.
- The covid -19 pandemic in 2020 caused a lot of damage to the economy, in 2021, the budget is expected to compensate for that loss and the economic growth will be on track with the ascending graph of growth. It’s expected that the government will try to revive the economy in 2021.
- It is also expected that a provision of a special exemption in tax will be made for the companies and their employees who make products under the make in India program, to encourage the ‘Make in India’ scheme.
Taxes and non revenue taxes are the primary source of income of government, which is collected in the form of direct and indirect taxes
Direct taxes are the taxes which we pay in the form of income tax, property tax, tax on assets etc. While indirect taxes includes GST, Custom Duty and TDS and on the other hand revenue tax is a income which is earned by the other source like interest on dividend and profit received by public sectors enterprises.
Union budget speech scheduled to start from 11 am in Lok Sabha and usually speech takes 90 min to 120 minutes.
FRBM stands for fiscal responsibility and budget management Act 2003. It’s meant to establish financial discipline in the economy and improving the management of the funds of public sectors and reduce the fiscal deficit.
There is no change in tax slabs, PPF limit, and Sec 80c exemption.
Our finance minister will present budget 2021 on 1st Feb 2021, and it’s expected that there is a main focused sector is health care and infra in budget 2021.
An interim budget is a complete financial statement made by the government for the entire year. It is similar to the main budget but it can be changed by the incoming government.
Our Hon'ble finance minister, Nirmala Sitharaman will present the union budget 2021 on 1st February 2021. Last year in 2020 also finance minister Nirmala Sitaraman has presented the budget in Lok sabha.
Following three types of budget we have:
Balanced budget- When the governments expenditure is equal to the revenues
Surplus Budget- when government revenue exceeds the estimated government expenditure
Deficit Budget- When the expenditure exceeds the expected government revenue.
Our honourable finance minister has allocated Rs 27.1 lakh to support the position of Kovid-19, which is Rs 35,000 crore more than the previous budget
FM Nirmala Sitharaman allocates Rs. 2,34,846 crore for the health care sector for the fiscal year 2021-22.
Finance Minister declares Atmanirbhar Health Yojana with an outlay of ₹64,180 crore over 6 years.
There are no changes in income tax slabs for FY 2021-22.
|Income||Old Tax Regime Rate||Old Tax Regime Rate|
|Up to ₹2.5 lakh||Nil||Nil|
|₹2.5 lakh to ₹5 lakh||5%||5%|
|₹5 lakh to ₹7.5 lakh||20%||10%|
|₹7.5 lakh to ₹10 lakh||20%||15%|
|₹10 lakh to ₹12.5 lakh||30%||20%|
|₹12.5 lakh to ₹15 lakh||30%||25%|
|Above ₹15 lakh||30%||30%|
You can download the union budget app from the play store for android and ios as well and see live updates of the union budget digitally anywhere.