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Budget 2021: From 6 Pillars To Direct & Indirect Tax, Everything FM Sitharaman Announced

Finance Minister Nirmala Sitharaman on Monday presented first-ever paperless budget, in post-COVID India, and based it on six pillars of Aatmanirbhar Bharat


Finance Minister Nirmala Sitharaman on Monday, presented the first-ever paperless budget in the post-COVID India and based it 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 government, maximum governance. At the beginning of the Union Budget 2021, Finance Minister Nirmala Sitharaman quoted Rabindranath Tagore and said, that the Budget as ''dawn of a new era". She also hailed the Indian cricket team for their recent Cricket Test series win against Australia. "In this spirit, I can't help but recall the joy that we as a Cricket loving nation felt after Team India's recent spectacular success in Australia," the Finance Minister said. 

First Pillar: Health and Well-Being

Finance Minister Nirmala Sitharaman announced an expanded focus on Health, allocating 2.83 lakh crores in this year's Union Budget - a 137% in Health budget. Under the Health and well-being sector, she announced a Centre-sponsored Health system - PM Aatmanirbhar Swasth Yojana with an outlay of Rs 64,180 crores over 6 years in addition to the National Health Mission. 

  1. PM- Aatmanirbhar Swasth Yojana scheme will be launched

  2. Jal Jeevan Mission Urban scheme will be launched

  3. Urban Swachh Bharat Mission 2.0 will be launched

  4. Voluntary vehicle scrapping policy to be launched for reducing pollution 

  5. Pneumococcal vaccine rollout will be done to prevent 50,000 child deaths annually

  6. Mission POSHAN 2.0 to be launched

  7. Supplementary Nutrition Programme & POSHAN Abhiyaan to be merged


Second Pillar: Physical and Financial capital and infrastructure

With an aim to create jobs for youth, FM Sitharaman announced ₹ 1.97 lakh crore over 5 years starting this FY, for Production Linked Incentive Schemes to create manufacturing global champions for an AatmaNirbhar Bharat. FM also announced a sharp increase of 34.5% in capital expenditure as compared to previous budget estimates - resulting in allocation of ₹ 5.54 lakh crore. In a first, the FM announced a record sum of ₹ 1,10,055 crore to be provided for Indian Railways. She also announced that definition of small companies under Companies Act 2013 to be revised so as to Companies with paid-up capital up to ₹ 2 crore & turnover up to ₹ 20 crore will fall under small companies.

 

  1. Scheme of Mega Investment Textile Parks to be launched 

  2. PLI scheme to be launched 

  3. 7 textile parks to be set up over 3 years

  4. Development Financial Institution to be set up, to provide, enable & catalyze infra financing. ₹ 20,000 crore allocated to capitalize this institution

  5. National Monetization Pipeline of potential brownfield infrastructure assets to be launched

  6. Railways to monetize dedicated freight corridor assets for O&M

  7. Western Dedicated Freight Corridor and Eastern Dedicated Freight Corridor to be commissioned by June 2022

  8. 100% electrification of rail broad gauge routes to be completed by December 2023

  9. Scheme at a cost of ₹ 18,000 crore for augmentation of public bus transport services to be launched

  10. MetroLite and Metro New Technologies to be deployed to provide metro rail systems

  11. Comprehensive National Hydrogen Energy Mission to be launched

  12. Seven port projects worth more than ₹ 2,000 crore to be offered by major ports in PPP Mode

  13. Scheme for promoting flagging of merchant ships in India to be launched

  14. Ship Recycling Capacities of around 4.5 million Light Displacement Tonnage to be doubled by 2024

  15. 100 more districts to be added in next 3 years, to City Gas Distribution Network

  16. A single and rationalized Securities Markets Code to be set up, by consolidating provisions of SEBI Act 1992, Depositories Act 1996, Securities Contracts Regulation 1956 and Govt. Securities Act 2007

  17. Insurance Act 1938 to be amended, to increase permissible FDI limit in insurance companies from 49% to 74%

  18. Asset Reconstruction Company Ltd. to be set up to consolidate and take over existing stressed debts

  19. Deposit Insurance Cover for bank customers to be increased from ₹ 1 lakh to ₹ 5 lakh

  20. NCLT framework will be strengthened, e-court system to be implemented, alternate debt resolution mechanism and special framework for MSMEs to be introduced, Data Analytics and AI driven MCA 21 version 3.0 to be introduced

  21. IPO of LIC also to be brought in

  22. Disinvestment of IDBI Bank, Air India etc would be completed in 2021-22

  23. Fintech Hub was also proposed to instill confidence in participants among the corporate bond market. The body will help in the development of bond markets.

Third Pillar: Inclusive Development for Aspirational India

FM Sitharaman began by saying - "Our Government is committed to the welfare of farmers", amid ruckus by the Opposition. She said, "The MSP regime has undergone a sea change to assure price that is at least 1.5 times the cost of production across all commodities. The procurement has also continued to increase at a steady pace. This has resulted in increase in payment to farmers substantially."

  1. SVAMITVA (Survey of Villages Abadi and Mapping with Improvised Technology in Village Areas) scheme to be extended during 2021-22 to cover all states and union territories

  2. Agricultural credit target enhanced to ₹ 16.5 lakh crore, focus will be on ensuring increased credit flow to animal husbandry, dairy and fisheries sectors

  3. Allocation for Rural Infrastructure Development Fund to be enhanced from ₹ 30,000 crore to ₹ 40,000 crore

  4. ₹ 5,000 crore Micro Irrigation Fund to be augmented by another ₹ 5,000 crore

  5. Scope of Operation Greens Scheme to be extended from tomatoes, onions and potatoes to 22 perishable crops

  6. 1,000 more mandis will be integrated with e-NAM

  7. Agriculture Infrastructure Fund would be made available to APMCs for augmenting their infrastructure facilities

  8. 5 major fishing harbours – Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat – will be developed

  9. Multipurpose Seaweed Park to be established in Tamil Nadu

  10. Setting up of a portal that will collect relevant information on gig, building, and construction-workers among others, thus helping to formulate Health, Housing, Skill, Insurance, Credit, and food schemes for migrant workers.

  11. Minimum wages will apply to all categories of workers, and they will all be covered by the Employees State Insurance Corporation.

  12. Women will be allowed to work in all categories and also in the night-shifts with adequate protection.

  13. 15,700 crores to MSME sector

Fourth Pillar: Reinvigorating Human Capital

  1. Over 15000 schools will be qualitatively strengtehened

  2. 100 new Sainik Schools 

  3. Legislation for umbrella body of higher education 

  4. Central university in Leh

Fifth Pillar: Innovation and R&D

  1. National Research Foundation 50,000 crores outlay for over 5 years

  2. 1,500 crores for a proposed scheme that will provide financial incentive to promote digital modes of payment.

  3. National Language Translation Mission (NTLM) to be launched

  4. Gaganyaan mission activities: Four Indian astronauts are being trained on Generic Space Flight aspects, in Russia. The first unmanned launch is slated for December 2021.

  5. ₹4,000 crores outlay for deep ocean survey spread across five years for conservation of deep ocean biodiversity.

Sixth Pillar: Minimum Govt., Maximum Governance

  1. National Nursing and Midwifery Commission Bill will be introduced by the government

  2. Conciliation Mechanism to be set up for quick resolution of contractual disputes

  3. 3,768 crores in the year 2021-2022 allocated for first ever digital census

  4. 300 crores for Goa to celebrate its diamond jubilee of the state’s liberation from Portuguese rule

  5. 1,000 crores for the welfare of Tea workers especially women and their children in Assam and West Bengal

READ | Union Budget 2021 LIVE Updates: 

Fiscal

  1. The fiscal deficit in RE 2020-21 is pegged at 9.5% of GDP

  2. Net borrowing for the states at 4% of GSDP for the year 2021-2022

  3. Additional borrowing ceiling of 0.5% of GSDP provided subject to conditions

  4. NSSF Loan to FCI for Food Subsidy discontinued

  5. Amendment to the FRBM Act

READ | Union Budget: FM Sitharaman highlights Centre's efforts amid global economic contraction

Direct tax

FM said, "Now in the 75th year of Independence of our country, when we continue our endeavour with renewed vigour, we shall reduce compliance burden on our senior citizens who are 75 years of age and above. For senior citizens 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."

  1. Senior citizens who are 75 years of age and above and have pension and interest income are exempted from filing tax returns 

  2. National Faceless Income Tax Appellate Tribunal Centre to be set up

  3. Dispute Resolution Committee to be set up

  4. NRIs to be exempted from double taxation

  5. Increase in limit for tax audit of individual from 5 crore to 10 crore

  6. Infrastructure Debt Funds eligible to raise funds by issuing tax efficient Zero Coupon Bonds.  affordable housing projects can avail a tax holiday for one more year – till 31st March, 2022.

  7. Tax exemption for notified Affordable Rental Housing Projects

  8. Tax holiday for capital gains for aircraft leasing companies, tax exemption for aircraft lease rentals paid
    to foreign lessors; tax incentive for relocating foreign funds in the IFSC

  9. Tax exemption to the investment division of foreign banks located in IFSC

  10. Tax exemption for small charitable trusts running educational institutions and hospitals less than 5 crore

READ | Union Budget 2021: Bahi Khata to Budget App, 3 major changes in traditions this year

Indirect tax

FM Sitharaman said that the Government will take steps to reduce inverted duty structures in GST. She proposed that government review over 400 old exemptions in indirect taxes. Other announcements include: 

  1. Time limit for reopening of I-T assessment halved to 3 years, serious fraud cases retained at 10 years

  2. Govt to borrow about Rs 12 lakh cr in FY22

  3. Eligibility for claiming tax holiday, capital gains exemption extended till Mar 2022

  4. Infra development cess on certain goods

  5. Customs duty on cotton, raw silk raised

  6. Customs duty on certain auto parts, solar equipment raised

  7. Rationalising customs duties on gold and silver

  8. Exemption duty on steel scrap up to March 2022

  9. Customs duty on naphtha cut to 2.5%

  10. Tax holiday for startups extended by 1 year exemption 

READ | Budget 2021: 137% hike in Health spending; PM Aatmanirbhar Swasth Bharat Yojana launched

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