Union Finance Minister Nirmala Sitharaman presented the Union Budget 2021 on Monday at the Parliament. Sitharaman read out the Budget through a tab, instead of the traditional “bahi khata.”
In her opening remarks, Sitharaman said Budget 2021 was prepared in “unprecedented times” and also thanked the essential workers who continued to serve the country amid the lockdown. She stated that so far only three times the budget has followed a contraction. She added: “Our government is fully prepared to support and facilitate a reset of the economy.”
Sitharaman listed the below as main pillars of Budget 2021:
- Health & Well-Being
- Physical & Financial Capital and Infrastructure
- Inclusive Development for Aspirational India
- Reinvigorating Human Capital
- Innovation and Research and Development
- Minimum Government & Maximum Governance
- Sitharaman announced Aatmanirbhar Health Yojana with an outlay of Rs 64,180 crore over six years, which will strengthen the National Centre for Disease Control. The government will also set up 15 Health Emergency Centres.
- Sitharaman announced Rs 35,000 crore for the Covid-19 vaccine. She added that the government is committed to providing more funds. The Budget outlay for health and welfare is Rs 223,846 crore in the 2021-22 Budget. She said that it is a 137% increase. Sitharaman said that India currently has two Covid-19 vaccines available and two more vaccines are expected soon.
- 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. She also extended tax holiday to startups and affordable housing projects by one year. She also ensured housing for migrant workers by exempting notified affordable rental projects from tax.
- Sitharaman redefined small companies under the Companies Act 2013. In the 2021-22 financial year, companies with paid-up capital up to ₹2 crores and turnover up to ₹20 crores will fall under small companies.
- Sitharaman announced further infusion of Rs 20,000 crore for public sector banks. She said: “The government plans to sell part of its holding in Life Insurance Corporation of India through an initial public offering in the coming year. An amendment to the existing Act to facilitate the public offer.”
- Agriculture credit target raised to Rs 16.5 lakh crore in 2021-22. While talking about farm laws, Sitharaman said: ” The government is committed to the welfare of farmers.” Amid protests from opposition leaders, she said, “MSP [Minimum Support Price] has gone through a sea change. Over Rs 75,000 crore paid to wheat farmers in 2020-21, 43.36 lakh benefited from this.”
- The government has introduced a Scrapping policy to remove unfit vehicles voluntarily. All private vehicles beyond 20 years and commercial vehicles older than 15 years old have to undergo fitness tests.
- Sitharaman said 217 projects worth over Rs 1 lakh crore are completed under the National Infrastructure Pipeline. She also said that she will soon table a bill on Development Financial Institution essentially to fill the gap in long-term finance for infrastructure sectors.
- Sitharaman announced plans for four more economic corridors—3500 kms of National Highway Works in Tamil Nadu at Rs 1.03 lakh crore, 1100 kms in Kerala at Rs 65000 crores, 675 kms in West Bengal at Rs 25000 crores, and over 1300 kms in Assam at Rs 34000 crores.
- While speaking about the Education sector, Sitharaman said: “I had mentioned about setting up of Higher Education Commission in the last budget; we will introduce legislation this year. It will be an umbrella body having 4 separate vehicles for standard-setting, accreditation, regulation, and funding.”
- The Finance Minister announced Rs 3.05 lakh crore outlay for the power sector and said that 100 more cities to be added in the coming three years to the gas distribution network.
- Sitharaman stated that the government will launch Mission Poshan 2.0; Jal Jeevan Mission Urban. She said: “The Urban Swachh Bharat scheme will be implemented with an outlay of over Rs 1.4 lakh crore.”
- Sitharaman said that the fiscal deficit for the current financial year is pegged at 9.5% and that there will be a borrowing of Rs 80,000 crore in the next two months. She further stated that the fiscal deficit in 2021-22 at 6.8%. of GDP and the borrowing from the market, next year will be Rs 12 lakh crore. She also set a target of a fiscal deficit of less than 4.5% of GDP in 2025-26
- The forthcoming Census could be India’s first digital Census, said Sitharaman allocating Rs 3,768 crore for financial year 2021-22.