Finance Minister Nirmala Sitharaman delivering her budget speech in Parliament, New Delhi. Union Budget 2021 Key Highlights: Finance Minister Nirmala Sitharaman has presented the Union Budget 2021-22 in Parliament. In significant changes to the taxation process, Sitharaman announced the scrapping of income tax for senior citizens under certain conditions, new rules for removal of double taxation for NRIs, and a reduction in the time period of tax assessments among other measures. Startups will get an extension in their tax holiday for an additional year.
Sitharaman also announced that the advance tax liability on dividend income shall arise after declaration of payment of dividend. At the conclusion of her speech, Sensex was at 47451.62, up 1165.85 points. In her speech, Sitharaman announced that India’s fiscal deficit is set to jump to 9.5 per cent of Gross Domestic Product in 2020-21 as per Revised Estimates. This is sharply higher than 3.5 per cent of GDP that was projected in the Budget Estimates. A slump in government revenues amid the Covid-19 pandemic has led to a sharp rise in deficit and market borrowing. In health care spending, Sitharaman announced a total spend of around Rs 2 lakh crore on healthcare with Rs 35,000 crore on Covid-19 vaccine development and innoculation.
Sitharaman, in her speech, announced a push to the textile industry, a hike in custom duty on cotton and raw silk, a new cess on agriculture development – Rs 2.5 per litre on petrol and Rs 4 per litre on diesel – a central university in Leh, a focus on sea-weed farming with a new facility in Tamil Nadu and a new vehicle scrapping policy that aims to provide the auto sector a boost among other announcements. Sitharaman also announced that an additional 1 crore families will now benefit under the Centre’s Ujjwala scheme. Four poll-bound states – Kerala, Tamil Nadu, Assam and West Bengal – will see significant spending on highway road expansion.
Addressing the nation after the Budget, Modi said it speaks of “all-round development.” “From Covid-related reforms to Atmanirbhar resolve, we moved ahead with this mantra in Budget 2021. It’s an active and not a reactive budget,” he added, congratulated the Finance Ministry team. This was Sitharaman’s third budget under the National Democratic Alliance (NDA) government led by Prime Minister Narendra Modi. In a significant departure from the tradition, this year’s Budget was not printed and was only made available in a digital format.
Congress national treasurer Pawan Bansal on Tuesday attacked the Centre, saying the Budget presented by the Union finance minister focused on the states going to the polls in near future and left people disappointed. He also alleged that Union Finance Minister Nirmala Sitharaman has failed to deliver and people have started realising it.
"Names of Assam, West Bengal, Kerala and Tamil Nadu were mentioned in the Budget as elections are due in these states. During the Bihar elections, Prime Minister (Narendra Modi) had sought votes for free coronavirus vaccines. Then he forgot Bihar. There was no mention about Rajasthan," Pawan Bansal told reporters here.
He said the states where the elections are due have been misled. The government and the finance minister have failed to deliver, he added. "We do not mind who is the minister. We want performance. We want results. The country wants results. This government has failed to deliver the results. Finance Minister Nirmala Sitharaman has failed to deliver the results," he said, adding that people needing help have been left disappointed.
Puducherry Chief Minister V Narayanasamy on Tuesday said the union budget has 'totally ignored' the Union Territory as sufficient funds needed for developmental activities here are not provided in it. Addressing reporters, the CM said, "Puducherry is also a poll bound State, but funds have been earmarked for other poll bound states like Kerala, West Bengal and Tamil Nadu in the budget for development of national highways."
Terming as 'unfortunate' the requirements of Puducherry being utterly 'neglected', Narayanasamy said this shows that the NDA government at the Centre pays no attention to the union territory. "The neglect of Puducherry in the budget is more shocking particularly after BJP national president J P Nadda during a public meeting here claimed that the NDA government was interested in ameliorating the lot of industrial workers and that ration shops would be activated in Puducherry," he said.
The Shiv Sena on Tuesday claimed Union Minister Nirmala Sitharaman has announced big packages in the budget for some poll-bound states, and asked how right is it to use the budget as a 'tool' to win elections. Accusing the Centre of setting a new trend of playing 'dirty politics' for votes through the budget, an editorial in Sena mouthpiece 'Saamana' said the allocation of more funds to poll-bound states is a kind of 'bribery'.
It also accused the Centre of ignoring Maharashtra which, it said, contributes highest revenue to the Union government's coffers. Finance Minister Sitharaman presented the 2021-22 Union Budget on Monday. '...what is unfortunate is that the (central) government has set a new trend of playing dirty politics of votes through budget,' the editorial said. (PTI)
BJP MP Jyotiraditya Scindia on Tuesday said allocations made in the Union Budget 2021-22 for various schemes in the Gwalior-Chambal region and Ujjain's famous Mahakaleshwar temple will boost development in these areas in Madhya Pradesh. The annual financial plan was presented in Parliament on Monday by Finance Minister Nirmala Sitharaman.
In a statement, Scindia said he had written a letter to 15th Finance Commission chairman NK Singh seeking funds for the water supply scheme from the Chambal river to Gwalior and Morena, for weavers of Chanderi sarees, and for the maintenance of the Mahakaleshwar temple.
"It is a matter of happiness that in the Union budget, Rs 250 crore is allocated for the water supply scheme from Chambal river to Gwalior and Morena, Rs 75 crore for the the development of the famous Chanderi (sari) weavers and for the tourism of Gwalior-Shivpuri-Chanderi area, and Rs 75 crore for the maintenance of the Mahakaleshwar temple," Scindia said. (PTI)
The budget has focused primarily on clean air in the environment sector – with its objectives spanning across ministries and sectors, from National Clean Air Programme under the Ministry of Environment, Forest and Climate Change to the ministries of Power, New and Renewable Energy and Urban Affairs. Finance Minister Nirmala Sitharaman announced that the government has earmarked Rs 2,217 crore for 42 urban centres with a million-plus population to focus on clean air. The minister had made a similar announcement, with an allocation of Rs 4,400 crore for cities above one million population. But hit by Covid-19, disbursement only started in the later part of this year, say experts.
About a crore old vehicles, currently in circulation, will go off the roads as the Centre on Monday announced a voluntary vehicle scrapping policy in the Budget. Personal vehicles older than 20 years and commercial vehicles older than 15 years will have to undergo fitness tests in automated vehicle fitness testing centres. “This will help in encouraging fuel efficient, environment friendly vehicles, thereby reducing vehicular pollution and oil import bill,” Finance Minister Nirmala Sitharaman said. Following the announcement, Road Transport and Highways Minister Nitin Gadkari said his ministry would be issuing the policy in the next 15 days.
In an interview to DD News, Finance Minister Nirmala Sitharaman said that deductions and exemptions under the personal income-tax regime will be gradually removed but when they are, the government will set attractive rates to make taxation more simple.
The Central Government has accepted a number of key recommendations issued by the 15th Finance Commission, including sharing 41 per cent of the net proceeds of the Union taxes with the states, the creation of a non-lapsable fund for defence in the public account of India, and undertaking a detailed exercise to rationalise and bring down the number of centrally sponsored schemes.
With regard to the sharing of Union taxes, the 15th Finance Commission had recommended that 41 per cent of the taxes collected by the Centre be shared with the states, compared to the present 42 per cent. “The Commission felt that financial resources equivalent to 1% of the net proceeds of Union taxes should be retained with the Central Government for financing the requirements of the newly formed Union Territories of Jammu & Kashmir and Ladakh,” according to the Action Taken Report on the Commission’s recommendations, tabled in Parliament by Finance Minister Nirmala Sitharaman.
The capital outlay for the armed forces was increased by nearly 19 per cent and a total of Rs 4.78 lakh crore was allocated for the defence Budget for 2021-22 as against Rs 4.71 lakh crore last year. In 2020-21, the capital expenditure of the Army, Navy and Air Force was nearly Rs 23,500 crore more than what was allocated in the budget estimates last year. Krishn Kaushik report
The Ministry of Women and Child Development has received a 16 per cent increase in its budget allocation this year with a sum of Rs 24,435 crore announced Monday. Finance Minister Nirmala Sitharaman further announced that supplementary nutrition schemes were being merged with the Poshan Abhiyan to launch Mission Poshan 2.0. In 2020-21, the ministry was allocated a sum of Rs 30,007.09 crore, which was revised to Rs 21,008.31 crore. Out of the allocation for the ministry this year, the highest amount has been allocated to Mission Poshan 2.0 and Saksham Anganwadi scheme — Rs 20,105 crore. Esha Roy reports
The Ministry of Home Affairs (MHA) has been allocated in excess of Rs 1.66 lakh crore in the Union Budget for 2021-22, marginally lower than the allocation of Rs 1.67 lakh crore announced in the last Budget. Most key allocations for MHA have more or less remained the same as the last budget.
The lion’s share of this allocation has gone to police forces and organisations — Rs 1,03,802 crore. Of this, Rs 9,715 crore is capital expenditure. Both figures are marginally lower as compared to the last Budget.
Jammu and Kashmir, which on account of having been newly carved out as a Union Territory had been granted Rs 30,757 crore in the last Budget, has received the same allocation this time. Ladakh has been allocated Rs 5,958 crore, same as last time.
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edrawing the fiscal consolidation roadmap, the government has projected a fiscal deficit of 6.8 per cent of Gross Domestic Product (GDP) for financial year 2021-22, along with setting a glide path to reduce it to 4.5 per cent by financial year 2025-26. The government cited an unprecedented adverse shock to the economy in 2020-21, inflicted by the Covid-19 pandemic, as the reason for changing its fiscal projections, for which the government will now amend the Fiscal Responsibility and Budget Management (FRBM) Act.
This marks a sharp departure from the earlier fiscal deficit projection of 3.3 per cent of GDP for 2021-22. Fiscal deficit for 2020-21, earlier estimated to be 3.5 per cent of GDP, has now been sharply revised upwards to 9.5 per cent of the GDP. Aanchal Magazine report
The topline equity indices on the BSE and National Stock Exchange (NSE) extended their post-budget bull run on Tuesday, rising nearly 3 per cent in early trade led by sharp gains in banking and financial stocks.
The S&P BSE Sensex reclaimed the 50,000-mark in early trade Tuesday, hitting an intraday high of 50,058.85, while the Nifty 50 touched 14,699.80.
At 9:38 am, the Sensex was up 1,288.53 points (2.65 per cent) at 49,889.14, while the broader Nifty was trading at 14,647.55, up 366.35 points (2.57 per cent).
With an aim to push spending and give a thrust to building public infrastructure, the Union government has detailed a three-pronged approach — a sharp increase in capital expenditure to Rs 5.54 lakh crore for 2021-22, creation of a National Monetisation Pipeline of potential brownfield infrastructure assets, and setting up of a Development Financial Institution (DFI) with a sum of Rs 20,000 crore being provisioned in the Budget to capitalise the institution.
Presenting the Union Budget on Monday, Finance Minister Nirmala Sitharaman said that the National Infrastructure Pipeline (NIP) was launched in December 2019 with 6,835 projects, and has now been expanded to 7,400 projects.
Right in the middle of a protracted stand-off over farm laws, the Budget Monday proposed a series of radical measures that could set the stage for the next round of political pushback — both on the street and in the corridors of power.
How the Centre does its preparatory groundwork with stakeholders — and the Opposition — holds the key.
More so when it has offered to pause the farm laws for 18 months in the wake of protests and the apex court has waded in as well. Raising the FDI limit in insurance to 74 per cent, LIC going public and privatisation of two public sector banks (PSBs) will need legislative measures and will bring the confrontation to Parliament. Ravish Tiwari reports
Finance Minister Nirmala Sitharaman on Monday announced a slew of measures to ease the tax compliance burden on senior citizens above the age of 75, small companies and improve dispute resolution mechanisms in the Union Budget for 2021-22.
During the Budget presentation, she also announced extension of key provisions allowing startups to claim a tax holiday and individuals to claim an exemption on capital gains if they are invested in startups.
“For senior citizens (who are 75 years of age and above) who only have pension and interest income, I propose exemption from filing their income tax returns. The paying bank will deduct the necessary tax on their income,” the Finance Minister said.
With elections to key states coming up later this year and the government facing farmer protests in the northern states, the Union Budget, while announcing a massive infrastructure push for these poll-bound states, is being projected as pro-farmers, with Prime Minister Modi calling it one framed with “villages and farmers at its heart.”
As it campaigns in West Bengal, Assam, Tamil Nadu and Kerala, the BJP will focus on the measures in the Budget for the farmers. “The highlights of our campaign on the Budget will be the announcements for the farming community. It is very important for the party in view of the farmers’ protests. We have to argue that the government is committed for the welfare of the farmers,” said a BJP leader.
Reported by Dipankar Ghose, Liz Mathew
Finance Minister Nirmala Sitharaman’s Budget announcement of increasing the FDI limit in insurance from 49 per cent to 74 per cent could lead to an unprecedented expansion of the insurance sector, its penetration, its level of competition, and value for customers in terms of better products at lower cost.
Foreign inflows in insurance companies will also enable them to become more effective vehicles for household savings, creating long-term assets in the economy.
“I propose to amend the Insurance Act, 1938 to increase the permissible FDI limit from 49% to 74% in Insurance Companies and allow foreign ownership and control with safeguards,” said Sitharaman. Sandeep Singh, Sunny Verma report
With non-performing assets (NPAs) set to rise in the wake of the economic slowdown induced by the pandemic, Union Finance Minister Nirmala Sitharaman Monday announced the creation of an asset reconstruction company/ asset management company (ARC/AMC) — popularly known as a “bad bank” — to clean up the books of banks. Sitharaman also proposed a development financial institution (DFI) to enable long term funding worth Rs 5 lakh crore in 3 years for infrastructure projects. The purpose of a “bad bank” is to park the bad assets of commercial banks and later sell those assets at a discounted price in the market. This will help clean up the balance sheets of commercial banks. A good chunk of gross NPAs totalling Rs 899,803 crore as of March 2020 is expected to be transferred to the “bad ban.
Read Sunny Verma, George Mathew report, here
With covid infections crossing the 1-crore mark, and claiming nearly 1.54 lakh lives, the Government has allocated
Rs 64,180 crore in the Union Budget presented Monday to upgrade public health care infrastructure under a new flagship PM AtmaNirbhar Swasth Bharat initiative over six years — and unveiled a new expenditure head called “health and well-being”.
Spelling out medium and long term expenditure for the public health care system, which came under severe stress during the initial stages of the pandemic, Union Finance Minister Nirmala Sitharaman pegged the total expenditure for “health and well-being” at Rs 2,23,846 crore — an increase of 137 per cent — including Rs 35,000 crore for immunisation with Covid vaccines.
Kaunain Sheriff M reports. Read here