THE UNION BUDGET 2021
The government budget is an annual statement of estimated expenditure and expected revenue for the upcoming fiscal year. On 1st February 2021, Finance minister Nirmala Sitharaman presented the Annual Union Budget for the financial year 2021-2022. This budget will be applicable from 1 April 2021 to 31 March 2022. It was the first digital budget. Soft copies of the budget are distributed to everyone. Like every year this year budget is also of Fiscal Deficit type.
- The budget is not just a collection of number, but an expression of our value and aspirations. – Jack Lew
- A budget is telling your money where to go instead of wondering where it went. – Dave Ramsey
STATISTICS – What Numbers have to Say?
- The government estimated to spend Rs. 34,83,236 crore in the financial year 2021-2022 which was Rs 34,50,305 crore as per revised estimates of the 2020-21 budget.
- The revenues are expected to be Rs 19,76,424 crore in 2021-22, which is 23% higher than the revised estimate of budget 2020-21.
- In 2020-21, revised estimates for revenues were 29% lower than budget estimates.
- Revenue deficit is targeted at 5.1% of GDP, lesser than revised estimates of 7.5% in 2020-21.
- The fiscal deficit of India settled at 9.5% in 2020-21 and is targeted at 6.8% in 2021-22.
DESCRIPTION – Let’s take a Deep Dive
According to the Finance Minister focus of the budget 2021-2022 is on – health and wellbeing, physical and financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D.
- Healthcare and sanitation: As compare to the 2020-21 budget this year more money is given to this department. Due to the unexpected pandemic of COVID-19, actual spending is more than estimated.
- In the year 2021-22, ₹ 2,23,846 crore are expected to be spent on health and well- being which is 137% more than last year.
- Out of allocated funds ₹ 60,030 crore outlay on drinking water and sanitation,₹ 2,700 crore outlay on nutrition.
- Considering last year’s pandemic this year ₹35,000 crores are provided for vaccination.
- Health Ministry is expected to spend ₹71,269 crores in 2021-22 which is roughly 9% more than the budget estimates of last year.
- In 2020-21, it was expected that the health ministry should spend ₹ 65,012 crore but they spent ₹78,886 crore due to the COVID-19 outbreak.
- Department of Health Research (DHR) which gives money to the Indian Council of Medical Research (ICMR), has given ₹ 2,663 crores. For the last fiscal year, they had a budget of ₹ 2,100 crores, however, it is expected from them to spend up to ₹ 4,062 crores by March.
- Ministry of Ayush is expected to spend ₹ 2,970 crores in the financial year 2021-22.
- This year Finance Minister announced a new scheme ‘PM Atma Nirbhar Swasth Bharat Yojana’ to develop primary, secondary and tertiary healthcare. This scheme will be implemented systematically in 6 years with an outlay of about ₹ 64,180 crores.
- Production Linked Incentive Scheme = Rs. 1.97 lakh crore in the next 5 years will be given for this scheme in 13 Sectors to create and nurture manufacturing global champions for an AatmaNirbhar Bharat.
- Textile = Mega Investment Textiles Parks (MITRA) scheme will be introduced from this year. Under this scheme, 7 Textile Parks will be established over 3 years for attracting large investments and boost employment generation & exports.
- National Infrastructure Pipeline = The final report on National Infrastructure Pipeline for FY 20-25 was released by the FM Nirmala Sitharaman on 29th April 2020. This scheme is now expanded to 7,400 projects. Also, National Asset Monetising Pipeline will be launched to monitor the asset monetization process.
- Road & Highway Infrastructure = The highest ever outlay of Rs. 1,18,101 lakh crore given to Ministry of Road Transport and Highways. Under the Bharatmala Pariyojana, more than 13,000 km length of roads worth Rs. 3.3 lakh crore awarded for construction. New Economic corridors and Expressways being planned. The advanced traffic management system will be installed in all new 4 and 6-lane highways.
- Railway Infrastructure = Rs. 1,10,055 crore for Railways of which Rs. 1,07,100 crore is for capital expenditure. Total electrification of Broad-Gauge routes is expected to be completed by December 2023. National Rail Plan created to create a future-ready Railway system by 2030.
- Urban Infrastructure = Metro services announced in 27 cities, and additional allocations for Kochi Metro, Chennai Metro Phase 2, Bengaluru Metro Phase 2A and B, Nashik and Nagpur Metros.
- Power Infrastructure = National Hydrogen Energy Mission 2021-22 will be launched. Consumers can choose the Distribution Company for enhancing competitiveness
- Pradhan Mantri Ujjwala Yojana (LPG scheme) will be extended to cover 1 crore more beneficiaries
- Tax: This year there are no changes in income tax rates for individuals and corporations.
- There will be no IT filing for people above 75 years who get pension and earn interest from deposits.
- Limit of Rs. 2.5 lakhs set on tax-free Income from provident funds.
- An extension is given on tax incentives by one year. This includes tax deduction up to Rs 1.5 lakh on interest on housing loan, and tax holiday for affordable housing projects, profits of startups.
- Businesses carrying 95% of their transactions digitally and whose turnover is less than Rs. five crores are exempted from keeping audited accounts.
- The time limit for the re-opening of an income tax assessment to be reduced from 6 years presently to 3 years.
- The cess will be levied on some imported items including gold, silver, alcoholic beverages, coal, and cotton, and basic customs duty will be reduced by an equal amount. The cess will be levied on petrol and diesel at the rate of Rs 2.5 and Rs 4 per litre respectively, with equivalent cuts in excise duty. As the cess is not part of the divisible pool of revenue shared with states, there will be an adverse effect on revenue receipts.
- Legislation to set-up a Higher Education Commission of India to be introduced, having vehicles for standard-setting, accreditation, regulation, and funding.
- More than 15,000 schools will be strengthened to include all components of the National Education Policy (NEP) and subsequently mentor other schools to achieve ideals of Policy.
- 100 new Sainik Schools to be set up and 750 Eklavya schools to be set up in tribal areas.
- Innovation and R & D
- PSLV-CS51 will be launched by New Space India Limited (NSIL) carrying Brazil’s Amazonia Satellite and some Indian satellites.
- As part of the Gaganyaan mission activities, 4 Indian astronauts will be trained on Generic Space Flight aspects in Russia also first unmanned launch is slated for December 2021. Rs. 4,000 crore over five years are given for Deep Ocean Mission survey exploration and conservation of deep-sea biodiversity.
- Agriculture and allied sectors
- Operation Green Scheme which is currently applicable to tomatoes, onions, and potatoes, will be enlarged to include 22 perishable products. The Agriculture Infrastructure Fund will be made available to APMCs to improve its infrastructure facilities.
- A portal to collect information on gig workers, and construction workers, among others, will be launched to help frame schemes on health, housing, insurance, and others for migrant unorganized workers. The Apprenticeship Act will be amended to increase apprenticeship opportunities.
In the union budget 2021-2022, Health, vaccination & sanitation, and Infrastructure are two sectors with maximum funding. Because of COVID-19 most of the fundings are diverted to Health and Vaccination sector from other projects. Investment in infrastructure is for future purposes, so it will give a profit in the future. The fiscal deficit is highest this year but the government is expecting to reduce it to below 4.5% of GDP by 2025-2026 with a fairly steady decline over the period. If this goal is achieved as per planning then it is good but if not then it will be a difficult situation.
Apart from this, there is not much special in this year’s budget as compared to last year’s budget.
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Author – Vaishnavi Guntoorkar