India Finance Minister Nirmala Sitharaman presented first-ever paperless Union Budget 2021 on 1 February. She presented the Union Budget 2021 with a significant focus on 6 pillars to energise the covid-19 hit economy.
India Finance Minister Nirmala Sitharaman announced the following six pillars in her Union Budget speech. Considering the growth of post-covid recovery, these pillars will define the spirit of economic recovery, where the central government will focus majorly on the healthcare industry. After all, India is a country FOR THE PEOPLE, OF THE PEOPLE, BY THE PEOPLE.
The six pillars are:
To break the taboo and welcome the era of digitalisation, Nirmala Sitharaman replaced the traditional ‘Swadeshi Bahi Khata’ with a ‘Made-in-India Tablet.’
The government proposed INR2.23 trillion budget overlay for the healthcare and well-being pillar for the fiscal year 2021-2022. The figures outlay an increase of 137% as compared to the current fiscal year budget of INR944.5 billion. She announced a new scheme ‘Prime Minister Atmanirbhar Swasthya Bharat Yojana’ that is centre-sponsored.
The scheme will have an outlay of INR641.8 billion, that will help in boosting healthcare infrastructure across the nation. The country will develop the capacity of primary, secondary, and tertiary care health systems. The scheme will support the main interventions of over 17,000 rural and 11,000 urban wellness centres in the country.
She also announced an outlay budget of INR350 billion for COVID-19 vaccines for the coming fiscal year, the outlay will commit to providing more necessary funds in the FY 2021-2022, if required. She confirmed that India is circulating two COVID-19 vaccines, adding that two more launches are likely on its way. She also welcomed the rollout of pneumococcal vaccines across the nation, to save over 50,000 annual deaths. This vaccine will be effective against infections like pneumonia, meningitis, and septicaemia.
Sitharaman announced that senior citizens above 75 years earning only pension and interest income have been exempted from filing tax returns. The bank will only be deducting the tax that is necessary from their respective incomes.Tax department will notify rules to all the non-resident Indians (NRIs) removing difficulties to double taxation.
However, she did not confirm any changes in the personal income tax slabs. She added that prefilled income tax returns that include details on capital gains from dividend income and interest income from banks, listed securities, and post offices will be available for the public soon.
In regards to reopening of the income tax assessment cases, the government reduced the time to three years from the present six years. The exemption of 10 years is listed to serious fraud cases where the income concealment is over INR5 million. However, for small taxpayers with an income of up to INR5 million, a dispute committee will be called in.
Sitharaman also hinted at a boost to the housing sector and relief for home buyers. Additional deduction in interest totalling INR150,000 for a loan has been extended by one year to 31st March 2022. In addition to the same, a housing project in the affordable amount can also avail tax holiday for an extra one year till 31st March 2022.
Central government proposed a surge in the insurance sector in foreign direct investment (FDI) limit to 74% as compared to the present 49%. The outlay will help in attracting greater overseas capital inflows, which will help in enhancing insurance penetration in India. Nirmala Sitharaman stated that the highway project of 8,500 km will be awarded by March 2022 developed on major four poll-bound states. West Bengal will be welcoming a highway project worth INR250 billion. Kerala and Assam will undertake highway projects worth INR650 billion and INR34 billion respectively.
Nirmala Sitharaman announced FDI limit in her Union Budget speech, to be escalated by 74% from the existing share of 49%. The Indian government will also be allowing foreign ownership in insurance with safeguards. During her speech, she also confirmed the launch of Securities Market Code that will include SEBI Act, Depositories Act, and Govt Sec Act.
SEBI will also be notified as the regulator for gold exchange in India. The Indian government is also proposing 2PSU banks and 1 general insurance company that will be strategically divested.
Indian government will also be taking major steps to incentivise one-person firms and companies registered in the nation. Fiscal year 2021-2022 will also bring the LIC IPO bringing the requisite amendments in this particular session itself, mentioned Sitharaman. Considering the digitalisation amid COVID-19 pandemic, e-Courts will be put under consideration including alternate adoptions of debt resolution.
Ahead of farmers’ protest amid recently passed new farm laws, Nirmala Sitharaman stated that the Modi government is committed to the welfare of the farmers. The MSP regime underwent ‘sea change’ that ensured a sharp increase in the procurement of foodgrains and payments to the farmers of India.
She also announced setting up of Asset reconstruction and management company for the under-pressure assets of Indian banks. The announcement includes an infusion of INR200 billion into public sector banks in the coming fiscal year, which will help in consolidating the financial health of the banks.
After the Union Budget 2021 was concluded, India Prime Minister Narendra Modi also shared remarks on ‘Proactive Budget’. lauding the budget, Modi stated that the country has presented a budget that will tackle all issues more pro-actively than a reactive approach. Paying regards to the Finance Minister Nirmala Sitharaman, Modi stated that the central government will ease the burden of a common man.
However, the budget was not taken healthily by the opposition leaders. West Bengal CM Mamata Banerjee slammed the Union Budget by saying that it does not include any relief for the unorganised sector of the country, claiming that the budget is not for development rather ‘sale’ of the country.
Statement by Health Ministry on Union Budget 2021:
The Health Ministry, on the other hand, hailed the health allocation in the budget considering the pre and post-covid-19 economic situation.
While people are choosing sides of the same coin, India will be working progressively to reinstate the pre-covid situation in the coming fiscal year. If you wish to read more about the latest news on Union Budget 2021, keep reading AlShorts, short news in 30 seconds.