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Union Budget 2021 Highlights
Union Finance Minister Nirmala Sitharaman delivered her third Budget in Parliament on Monday, February 1. This Budget will be in continuation of government efforts to revive sectors impacted by pandemic, which has hit all economic activities and led to millions of job losses mainly in small businesses.
Tax
Proposals: Benefits to Common Man:
This is the budget to improve people’s incomes, to provide more money in their hands, to enhance their purchasing power & to boost consumption and therefore demand. The distinctive structural changes that the government is bringing in the direct tax domain have made the direct tax system more transparent, more accountable and accessible.
• Indirect Taxes-GST: The Budget announcements on the indirect tax front are expected to promote the Union government’s flagship programme of Make in India or more popularly known as ‘Atmanirbhar Bharat’ or ‘Vocal for Local’.
• The matter of GST: The GST is completing its four years journey and still sectors such as Petroleum and Alcohol are outside the GST, Expects the government to consider expanding the GST base in a phased manner. In the first phase, petroleum products especially Natural Gas and Aviation Turbine Fuel should be brought under the GST net thereby granting the oil and gas industry the ability to claim an input tax credit (ITC) on all inputs, capital goods and input services.
The Government can rationalize the GSTN portal to allow the following:
(a) Amendments at a time when input tax credit is taken
(b) A re-look at some notifications issued, particularly the amendment to Rule 21A of the CGST Rules
(c) Denying opportunity of hearing in case of perceived misdoing and cancellation of registration
(d) Allowing the industry some leeway in introducing the e-invoicing and QR code implementation on invoicing.
• Relief
for senior citizens:
(a) For the first time in this Budget, reduce compliance burden on those people who above 75 years. This means people above 75 years, who get pension and earn interest from deposits need not file IT returns.
(b) In serious tax evasion cases, when the concealment of income is more than Rs.50 lakh per year, it can be opened for up to 10 years.
(c) Affordable housing projects will get a tax holiday for one more year.
(d) Compliance burden of small trusts whose annual receipts does not exceed ₹5 crore will be eased.
•Disinvestment
and strategic sale:
Two PSU bank and one general insurance firm will be disinvested this year. An IPO of LIC will be debuted this year. A SPV will be launched to carry out this activity. A revised mechanism will be introduced for timely closure of loss making PSUs. Our Finance minster says Inspite of COVID-19, we kept working towards strategic sale of BPCL, IDBI Bank, Air India, which will be completed in 2021-22 She says, Niti Aayog has been asked to come up with the list of companies that may be disinvested next. Estimated receipts of Rs 1.75 lakh crore as receipts from disinvestment in 2021-22, she adds.
•Metro services:
MetroLite and MetroNeo will be introduced. These are low cost Metro projects. Through this budget it will work towards raising the share of public transport in urban areas through expansion of metro networks and augmentation of city bus services. The scheme will facilitate deployment of innovative PPP models to enable private players to provide and operate over 20,000 buses. A total of 702 km of conventional metro is operational.
•Financial
Capital:
Towards investor protection, Nirmala Sitharaman proposes to introduce an investor authority as a right for all investors in all financial products.
(a) She amends the insurance act to increase the FDI limit from 49% to 74%.
(b) The high level of provisioning by public sector banks calls for measures to clean up their books. An asset reconstruction company will be set up to take over stressed loans. Asset reconstruction and Asset management companies will be set up for value realization.
Deposit insurance:
The government has approved an increase in the cover from ₹1 lakh to ₹5 lakh for bank depositors. She shall be moving amendments to streamline the provision so that depositors can get easy and time bound access to their savings to the extent of the deposit insurance. This will help depositors in banks that are currently under stress.
Decriminalisation of offences under the Companies Act is now complete.
She proposes to complete the decriminalisation of the Limited Liability Partnership Act of 2008.
•New
voluntary scrappage policy:
Union Finance Minister announces new voluntary scrappage policy to phase out old vehicles. The scrappage policy has been long awaited by the automotive industry.
•Health
and wellbeing:
(a)A new centrally sponsored scheme called PM “Atma
Nirbhar Swasthya Bharat Yojana” at the outlay of ₹64,180 crore over six
years to develop primary, secondary and tertiary healthcare systems.
(b)This will be in addition to the National Health mission and will support 17,000 rural and 11,000 urban health care centres.
(c) The government envisages establishing critical health care hospital blocks in 602 districts.
(d) An urban Jal Jeevan Mission to be launched and implemented over five years with an outlay of ₹2.87 lakh crore.
(e) The Urban Swachh Bharat Mission will be implemented over five years.
(f) To tackle the burgeoning air pollution problem, Finance Minister allocating ₹2,217 crore for 32 urban centres.
(g) ₹35,000 crore has been allocated for COVID-19 vaccines and intend to provide further funds if required.
•National
Rail Plan:
(a)National Rail Plan has been created to bring a future ready Railway system by 2030.
(b)The Somnagar-Gomu section of Eastern Dedicated Corridor will be taken up this year. The dedicated Eastern and Western Freight corridors will be ready by 2022.
(c) 100% electrification will be completed by 2023. Vistadome (state-of-the-art coach) coaches in all tourist corridors.
•Agriculture
and rural development:
Ms. Sitharaman says the MSP has been increased to 1.5 times.
For wheat, the total amount paid to farmers in 2013-14 was ₹33,874 crore. In 2019 -20, It was ₹62,804 crore. In 2020-21, this amount paid to farmers was ₹75,050 crore. The number of wheat growing farmers benefited, increased to 43.36 lakh compared to 35.57 lakh in 2019-20.
For paddy, the amount paid in 2013-14 was ₹53,928 crore. In 2019-20, this increased to ₹1.41 lakh crore. Even better, in 2020-21, this is further estimated to increase to ₹1, 72, 752 crore.
Agriculture infrastructure fund will be available for APMCs for augmenting their infrastructure. One thousand plus Mandis to be integrated into the E-NAM market place. Five major fishing hubs will be developed as hubs for economic activity including Chennai, Kochi and Paradip.
•Education:
(a) 100 Sainik Schools will be set up. 750 Eklavya schools will be set up in tribal areas.
(b) A Central University will come up in Ladakh.
(c) More than 15,000 schools will be strengthened under NEP 2020.
(d) An 'umbrella' structure will be created for central higher education institutions in various cities such as Hyderabad.
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