JOIN USBudget decoded | A complete guide to Union Budget 2021
Finance Minister Nirmala Sitharaman on Monday presented the ninth Union Budget of the Modi government. Union Budget 2021, which comes amid Covid-19 pandemic, focused on boosting healthcare and infrastructure spend to revive the economy.
Here's a complete guide to Union Budget 2021:
1. Budget pushes health, infra spends; no change in personal income tax slabs; no Covid-19 cess
India’s first Budget amid the Covid-19 pandemic gave a healing touch to the health sector by providing over Rs 2.22 lakh crore for health and wellness, which is 137% more than the last year’s allocation and also gave a big push to the infrastructure sector through a sharp increase in capital expenditures aimed at reconstructing the pandemic-ravaged economy and providing jobs.
FM Sitharaman made two bold Budget announcements, which included lining up two PSBs for disinvestment and putting up one state-owned insurance company for sale. The FDI limit in insurance was also increased to 74% from the current 49% in the Budget.
2. What became costlier, cheaper after Budget 2021
A large number of commonly used items, including refrigerators, air conditioners, LED lights and mobile phones, will become more expensive due to hike in customs duty on imported parts, as proposed by Finance Minister Nirmala Sitharaman in the Union Budget for 2021-22.
However, gold and silver will become cheaper as a result of rationalisation in customs duty on imports of these precious metals.
3. 'Bahi khata' goes digital, FM Sitharaman presents Budget on a tablet
Necessities make many adopt unconventional methods and Finance Minister Nirmala Sitharaman did just that when she announced that she will present Union Budget 2021 using a tablet.
The move to ditch the traditional 'bahi khata' comes in the wake of pandemic-induced restrictions that prompted a digital overhaul of the annual exercise. Departing from a British tradition passed on to India, Finance Minister Nirmala Sitharaman carried a 'bahi khata' (ledger) instead of a briefcase on July 05, 2019, when she presented her first full-time Budget.
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4. Poll-bound states get special focus in Budget 2021
From Rs 1.03 lakh crore highway projects for Tamil Nadu to Rs 65,000 crore works for Kerala - four poll-bound states found special mention in the Budget Speech of Finance Minister Nirmala Sitharaman on Monday.
Tabling the Budget 2021-22 in Parliament, Sithraman in her speech specifically announced Rs 2.27 lakh highway projects for four states - Tamil Nadu, West Bengal, Assam and Kerala amid approaching assembly elections.
5. For every rupee in govt kitty, 53 paise to come from taxes
For every rupee in the government coffer, 53 paise will come from direct and indirect taxes, 36 paise from borrowings and other liabilities, 6 paise from non-tax revenue like disinvestment and 5 paise from non-debt capital receipts.
According to the Union Budget 2021-22 presented in Parliament by Finance Minister Nirmala Sitharaman on Monday, goods and services tax will contribute 15 paise in every rupee revenue, while corporation tax will contribute 13 paise to each rupee earned.
6. Key income tax announcements for taxpayers
Even as there has been no change in the income tax (I-T) slabs of individual taxpayers, here are key announcements on income tax in Budget 2021:
1. The government reduced the compliance burden on senior citizens who are 75 years of age and above. For senior citizens who only have a pension and interest income, Sitharaman proposed exemption from filing their income tax returns.
7. Rs 35,400 cr allocated for Covid-19 vaccines in FY22
The government proposed a budget outlay of Rs 2,23,846 crore for health and well being in 2021-2022, an increase of 137 per cent from the previous year, with Rs 35,000 crore earmarked for Covid-19 vaccine in the upcoming fiscal.
"Health and well being has formed the topmost priority of the Union Government during the ongoing Covid-19 health crisis. It is the foremost of the six crucial pillars that form the foundation of the Union Budget," she said.
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8. Budget bold but fails to address inequities: Economists
Economists hailed Finance Minister Nirmala Sitharaman for a "bold budget" focused on fiscal expansion but flagged concerns over the proposals for not addressing the problems of inequitable growth.
Concerns over the impact on the sovereign rating have been sidestepped in the budget by using a wider fiscal deficit for addressing the growth needs, they said.
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9. Union Budget 'let down like never before', will unravel soon: Congress
Asserting that the Union Budget was a "let down like never before", the Congress on Monday claimed that it will unravel soon, and described the imposition of cess on petrol and diesel in the budget as a "vengeful act" against the thousands of farmers who took out the tractor rally.
The opposition party said it was a case of "wrong diagnosis and prescription", and that Finance Minister Nirmala Sitharaman could have been "brave" by extending help to the poor, but chose to be "timid".
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10. FDI in insurance sector increased to 74%
The government proposed to increase foreign direct investment (FDI) limit in the insurance sector to 74 per cent, a move aimed at attracting greater overseas capital inflows to help enhance insurance penetration in the country.
In the first paperless Union Budget, FM Sitharaman said under the new structure, the majority of directors on the board and key management persons would be resident Indians, with at least 50 per cent of directors being independent directors, and specified percentage of profits being retained as a general reserve.
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