Union Budget 2021-22 Announcements

Union Budget 2021-22 Announcements

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Prime Minister Narendra Modi has gone on record praising the Union budget 2021-22 introduced by the FM Nirmala Sitharaman and has called it a budget which shows India’s confidence and also instils self-confidence. While introducing the Union Budget for 2021-22, Finance Minister Nirmala Sitharaman said that the Budget proposals for this financial year stand 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, and ‘Minimum Government, Maximum Governance’.FM Nirmala Sitharaman introduced her first paperless union budget and announced a slew of plans on healthcare and infrastructure to give an impetus to the Covid-hit economy.

Many important announcements included cut down of hikes in custom duty to benefit Make in India, proposal to divest two more PSBs and a general insurance company and various infrastructure pledges to poll-bound states. Personal income tax slabs will remain as they are, and Fiscal deficit stands at 9.5% of the GDP and is estimated to be 6.8% in 2021-22.

Some major Highlights of the Budget 2021-22 is as follows :

Health and Sanitation :
  • Existing health units at 32 airports, 15 seaports and land ports to be modernized
  • Operationalization of 17 new public health units at points of entry
  • A new scheme, termed as the PM Atma Nirbhar Swasthya Bharat Yojana, to be launched to develop the status of primary, secondary, and tertiary healthcare
  • Jal Jeevan Mission Urban will be aimed at better water supply nationwide
  • Urban Swachh Bharat Mission to be strengthened

Education:

  • 100 new Sainik Schools will be set up
  • 750 Eklavya schools will be set up in tribal areas
  • A Central University will beset up in Ladakh

Economy and Finance:

  • Fiscal deficit stands at 9.5% of the GDP; estimated to be 6.8% in 2021-22
  • Proposal to allow States to raise borrowings up to 4% of GSDP this year
  • A Unified Securities Market Code to be created, consolidating provisions of the Sebi Act, Depositories Act, and two other laws
  • Proposal to increase FDI limit from 49% to 74%
  • An asset reconstruction company to be set up to take over stressed loans
  • Deposit insurance increased from Rs 1 lakh to Rs 5 lakh for bank depositors
  • Proposal to decriminalise Limited Liability Partnership Act of 2008
  • Two PSU bank and one general insurance firm to be disinvested this year
  • An IPO of LIC to debut this fiscal
  • Strategic sale of BPCL, IDBI Bank, Air India will be completed

Tax :

  • There will be no IT filing for people above 75 years who get pension and earn interest from deposits
  • There will be reopening window for IT assessment cases reduced from 6 to 3 years. However, in case of serious tax evasion cases (Rs. 50 lakh or more), it can go up to 10 years
  • Affordable housing projects to get a tax holiday for 365 days
  • Compliance burden of small trusts whose annual receipts does not exceed Rs. 5 crore will be eased
  • Duty of copper scrap to be reduced to 2.5%
  • Custom duty on gold and silver to be rationalized
  • Duty on naphtha to be reduced to 2.5%.
  • Duty on solar inverters to be raised from 5% to 20%, and on solar lanterns from 5% to 15%
  • All nylon products to be charged with 5% customs duty
  • Tunnel boring machines to attract customs duty of 7%
  • Customs duty on cotton to be raised from 0 to 10%
  • Agriculture infrastructure and development cess has been proposed on certain items including urea, apples, crude soyabean and sunflower oil, crude palm oil, kabuli chana and peas

Agriculture:

  • Agriculture infrastructure fund  will now be made available for APMCs for augmenting their infrastructure
  • 1,000 more Mandis will be integrated into the E-NAM marketplace
  • Five major fishing hubs, including Chennai, Kochi and Paradip, will be developed
  • A multipurpose seaweed park will be established in Tamil Nadu

Employment:

  • A portal will be launched to maintain information on gig workers and construction workers
  • Social security will be extended to gig and platform workers
  • Margin capital required for loans via Stand-up India scheme will now be reduced from 25% to 15% for SCs, STs and women

Infrastructure:

  • Vehicle scrapping policy to phase out old and unfit vehicles –  all vehicles to undergo fitness test in automated fitness centers every 20 years (personal vehicles), every 15 years (commercial vehicles)
  • Highway and road works announced in Kerala, Tamil Nadu, West Bengal and Assam
  • National Asset Monetising Pipeline launched to monitor asset monetisation process
  • National Rail Plan created to bring a future ready Railway system by 2030
  • 100% electrification of Railways to be completed by 2023
  • Metro services announced in 27 cities, plus additional allocations for Kochi Metro, Chennai Metro Phase 2, Bengaluru Metro Phase 2A and B, Nashik, and Nagpur Metros
  • National Hydrogen Mission to be launched to generate hydrogen from green power sources
  • Recycling capacity of ports to be doubled by 2024
  • Gas pipeline project to be set up in Jammu and Kashmir
  • Pradhan Mantri Ujjwala Yojana (LPG scheme) to be extended to cover 1 crore more beneficiaries 

These were the major highlights of the budget that came out on 1st Feb 2021. Many decisions will have major implications on the economic development of the nation while others might turn out to be crucial in spinning the country’s growth wheel. Let us know what you make of the Union Budget 2021-22 in the comments section below. Also, let us know what is missing from the current budget and what could have been done differently.

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