Union Budget 2021: A Complete List & Key Highlights of the Budget 2021

Finance Minister Nirmala Sitharaman tabled the Union Budget for 2021-22 on February 01 emphasizing six pillars on which the budget rests.

1. Health & Well-being
2. Physical and Financial Capital and Infrastructure
3. Inclusive Development for Aspirational India
4. Reinvigorating human capital
5. Innovation and R&D
6. Minimum Government and Maximum Governance

Taking a holistic approach to healthcare, this Union Budget 2021 will focus on three verticals:

• Preventive
• Curative
• Well-being

Preventive

The total financial impact of all Aatmanirbhar Bharat packages, including measures taken by RBI, was about Rs27.1 lakh crore, more than 13% of GDP. The package is an expression of 130 crore Indians who have full confidence in their capabilities and skill, as quoted by the FM.

Curative

Rs 64,180 crore will be invested over 6 years to improve primary, secondary and tertiary healthcare. The total budget outlay for healthcare is 2.23 lakh crore. This is an increase of 137% from last year.

Well Being

FM announces Rs 35,000 crore for Covid-19 vaccines. Vaccines will be rolled out across the country. This will prevent over 50,000 child deaths annually.Sitharaman announces Rs 2,217 crore outlay for 42 urban centres to tackle air pollution. Finance minister announces outlay of Rs 2.87 lakh crore for Jal Jeevan Mission.The Urban Swatch Bharat Scheme will be implemented with an outlay of 1.4 lakh crore. Health outlay to be used to establish critical care units and hospital blocks.

Power Infrastructure

• The government is proposing to create a framework to give consumers alternatives to choose from more than one power distribution company, Finance Minister Sitharaman announced.
• The move is aimed at offering competition at operator level and more choice to consumers in terms of will provide assistance to smart metering, upgradation etc. Targets better efficiency levels in the distribution sector.
• Rs 1,000 crore to solar energy corporation and Rs 1,500 to renewable energy development agency

Why the FDI hike in insurance?

• The finance minister announced to hike the FDI limit in Insurance from 49% to 74%. She however said that majority directors on board and Key management personnels will be Indians.
• The move will help increase capital inflow in insurance companies and enhance their expansion and growth.
• FM announces infusion of Rs 20,000 crore for public sector banks

Explained: Bad debt resolution

• The government plans to further strengthen the NCLT (The National Company Law Tribunal is a quasi-judicial body in India that adjudicates issues relating to Indian companies) framework and continue with the e-court system for faster resolution of bad debts.
• A separate framework for MSMSe will also be made by the government.
• The reason for taking this move: Since a number of MSMEs have been unable to earn enough due to the government imposed moratorium, can eliminate the insolvency by their creditors.
• The framework may help MSME owners avoid losing their company while continuing to pay the debt.

Explained: Bad bank proposal

• The government proposes to set up Asset Reconstruction and Management Company for Stressed Assets to take over bad loans.
• The Union Budget 2021 announces a Rs 20,000 crore equity infusion for PSBs. This aims to strengthen the state-owned banks and hasten the process of clean up of their balance sheet.

Agriculture

• FM Sitharaman proposes increase in agriculture credit target to Rs 16.5 lakh crore. "The MSP regime has undergone a change to assure price that is at least 1.5 times the cost of production across all commodities. Total amount paid to paddy farmers surged to Rs 1.72 lakh crore in 2020-21."
• In view of the farm protests, there are no radical reform proposals in the Union Budget for agriculture sector. No announcements with regard to the nutrient-based subsidy regime or rationalising PDS issue prices of foodgrain as suggested in the Economic Survey.

Renewable Energy Sector

• FM Sitharaman boosts Renewable Energy Sector: Rs 1,000 crore to solar energy corporation and Rs 1,500 to renewable energy development agency

Urban Infrastructure

• Union Finance Minister Nirmala Sitharaman has allocated Rs 25,000 crore road projects in West Bengal, Rs 65,000 crore for road, highway projects in Kerala, and 3,400 crore for Assam
• Union Finance Minister Nirmala Sitharaman announces Rs 18,000 crore scheme to augment public transport in urban areas.

Social Security to Gig workers and Planform workers

• Women will be allowed to work in all categories and also in night shifts with adequate protection. To further extend efforts towards unorganised labour force, the government proposes to launch a portal to collect relevant information on gig workers, building/construction workers among others. This will benefit health, housing, skill, insurance credit & food schemes for migrant workers.
• This proposal will benefit around 15 million gig workers working in sectors such as transportation (Uber and Ola), food delivery staff, and the contract workers in IT and software firms.

Taxation

• Union Finance Minister Nirmala Sitharaman lowers tax burden on senior citizens. Pensioners over 75 years of age will be exempt from filing returns.
• NRIs to be spared from double taxation. New rules to be notified, says FM. Tax audit limit increased from Rs 5 crore to Rs 10 crore.
• Government to notify rules to eliminate double tax for NRIs on foreign retirement funds.
• Govt proposes to increase threshold for tax audit to Rs.10 crore vs Rs. 5crore (for those transacting 95% digitally).
• Govt to set-up a faceless dispute resolution mechanism for small taxpayers.
• Advance tax liability on dividend to arise only after declaration.
• FPI to get deduction of tax on dividend at lower treaty rate.
• Tax exemption for aircraft leasing companies.

Government of India provided Rs 700 crore for MSME sector, more than double of what it was in Budget 2020.FM announces establishing an institution to address the stressed assets in the banking sector via an ARC model.Government to privatize 2 PSU banks, one general insurance company in FY22. Fiscal deficit estimated at 9.5% of GDP for 2020-21.

Education

• Over 15,000 schools to be qualitatively strengthened under National Education Policy
• The Central Government proposes to reduce the time allowed to re-open tax investigation to 3 years vs 6 years.
• The FM proposes that affordable housing projects can get tax holiday for one more year

A scheme of mega investment textile parks will be launched in addition to the PLI scheme7 mega textile parks will be launched in three years as part of the scheme.Tax exemption for notified affordable housing for migrants workers and the deduction on payment of interest for affordable housing has been extended by 1 year.

• Infrastructure debt funds may issue tax efficient 0 coupon bonds
• Tax exemption for Aircraft Leasing Companies
• I-T return forms to now be pre-filled with Capital Gains and Bank Interest details
• Aims to propose policies to allow foreign investors to invest in India's infrastructure projects
• Propose to make dividend payments to REIT (estate investment trusts) and Invit's (Infrastructure investment trusts) exempt from TDS
• To further ease filing of IT returns, details of capital gains and interest from banks, post offices, etc will be pre-filled

To review more than 400 old exemptions in customs this year. To put into place new customs duty structure by Oct-1, 2021.

• Revoking ADD and CVD on certain steel products.
• Reducing duties on copper scrap from 5% to 2.5%.
• Some parts of mobiles to move from NIL to 2.5% rate.
• Cutting duty on copper scrap 2.5% from 5%.
• Exempting duty on steel scrap for a specified period.
• This will help textile MSMEs and overall exports.
• Aims to allocate Rs 1,000 crore to solar energy corporation and Rs 1,500 to renewable energy development agency

No deduction to employers for late deposit of employee contribution to Provident FundTo extend eligibility for start-ups to claim tax holiday by 1 year.

Union Budget 2021 live:

• FY21 fiscal deficit at 9.5% of GDP
• FY21 gross expenditure seen at Rs 34.5 lakh crore
• FY21 capital expenditure seen at Rs 4.39 lakh crore
• FY21 fiscal deficit pegged at 9.5% of GDP
• FY22 fiscal deficit target at 6.8% of GDP
• FY22 gross expenditure seen at Rs 34.83 lakh crore
• FY22 capital expenditure seen at 5.54 lakh crore
• Market borrowing in FY22 seen at 12 lakh crore
• The government will borrow Rs 80,000 crore in the remaining two months to meet FY21 expenditure.
• New agri infra cess to be applicable from February 2, 2021
• Government to provide tax exemption for relocating funds to IFSC
• Govt to extend eligibility of erstwhile tax sop on home loan up to FY22; propose that affordable housing projects can avail tax holiday for one more year.
• Govt allocates Rs 3,726 crore for forthcoming Census. This will be the first digital census.
• Govt announces monetising more airports

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