Finance Minister Nirmala Sitharaman on Monday presented Union Budget 2021-22 in the Parliament. In her third consecutive Budget, Sitharaman proposed a sharp rise in capital expenditure for the next fiscal to Rs 5.54 lakh crore, from Rs 4.39 lakh crore in the current financial year. However, Sitharaman made no changes in personal or corporate tax rates but raised customs duties on certain auto parts, mobile phone components and solar panels to provide impetus to domestic manufacturing. She imposed an Agriculture Infrastructure and Development Cess (AIDC) on the import of certain items. Sitharaman has also introduced the concept of bad banks in this budget which will help other lenders and other financial institution to help clear their balance sheets. One of the key challenges that finance ministers over the years is the increasing amount of bad loans of the banks.
Here we are compiling allocation of funds to different sectors of the economy:
HEALTH
1. The Pradhan Mantri Atma Nirbhar Swasthya Bharat Yojana, which will operate in addition to the existing National Health Mission, has been allocated around Rs 64,180 crore.
2. The FY22 outlay (budget estimate) for health and well-being is up 138%, at Rs 2,23,846 cr. Of this, Rs 35,000 crore will be spent on the Covid-19 vaccine.
3. PM Aatmanirbhar Swastha Bharat to be launched with an outlay of 64,180 cr over 6 years. "Intend to focus on reduction of single use plastic, air pollution and segregation of waste.
4. The Urban Swachh Bharat scheme will be implemented with an outlay of over Rs 1.4 lakh crore.
AGRICULTURE
1. 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.
2. " 1,000 more mandis will be integrated with electronic national market. Operation green scheme to cover 22 more perishable commodities.
EDUCATION
Over 15,000 schools to be qualitatively strengthened under National Education Policy.
SOCIAL SECURITY
1. Portal to collect info on gig-workers, building and construction workers To further extend efforts towards unorganised labour force, proposed to launch a portal to collect relevant information on gig workers, building/construction workers among others. It'll help formulate health, housing, skill, insurance credit &food schemes for migrant workers.
2. Rs 1,000 crore for Bengal, Assam tea workers FM announces special scheme for welfare of women and children in Assam and West Bengal. Rs 1,000 crore for Bengal, Assam tea workers.
INFRASTRUCTURE
1. 217 projects worth over Rs 1 lakh crore completed under National Infrastructure Pipeline.
2. Development Financial Institution (DFI) reborn Will be tabled a bill on DFI essentially to fill the gap in long-term finance for infrastructure sectors. Professionally managed Development Financial Institution with Rs 27,000 crore capital.
RAILWAY
1. About Rs 1.10 lakh crore outlay for railways, of which Rs 1.7 lakh crore is for capital expenditure. Railways to monetize dedicated fright corridor assets for operations and maintenance after commissioning.
Road
1. More economic corridors being planned to boost road infrastructure "For 2022, proposed a sharp increase in capital expenditure at 5.54 lakh crore, from Rs 4.39 lakh crore in 2021. More economic corridors being planned to boost road infrastructure.
2. Highway works proposed: 3,500 km corridor in Tamil Nadu. 1,100 km in Kerala at investment of Rs 65,000 cr. 675 km in West Bengal at a cost of Rs 95,000 cr. 1,300 km in Assam in the next 3 years.
3. Allocation to rural infra development increased to Rs 40,000 cr in next fiscal from Rs 30,000 crore in FY21
TRANSPORT
1. FM announces Rs 18,000 cr scheme to augment public transport in urban areas and Rs 95,000 crore to be spend on roads in West Bengal. The announcement for the state of Bengal got the loudest thumping of desks.
AUTOMOBILE
1. Fitness test after 20 years for personal vehicles; after 15 years for commercial vehicles.
2. The government is likely to increase the registration renewal cost for personal vehicles and the fitness certification fee for commercial vehicles, in a bid to discourage old vehicles from plying on the road.
FINANCE
1. After dilberating on this for years, Finance Minister finally announces a Bad Bank. A new asset reconstruction and asset management company announced.
2. FM announces further infusion of Rs 20,000 crore for public sector banks.
3. Government to support the development of a world-class fintech hub at GIFT, investor charter to be introduced.
4. The finance minister announced to hike the FDI limit in Insurance from 49% to 74%. Majority directors on board and Key management personnels will be Indians.
5. FM puts disinvestment receipts at Rs 1.75 lakh cr for fiscal year beginning April 1, 2021. Strategic disinvestment of companies including BPCL, Air India, Pawan Hans, IDBI Bank, Container Corporation of India to be completed in 2021-22.
6. Two PSBs and one general insurance company to be divested, legislations amendments to be introduced in this session. Government to bring LIC IPO this year.
7. 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.
POWER, ENERGY
1. The government is proposing to create a framework to give consumers alternatives to choose from more than one power distribution company. Rs 3.05 lakh crore outlay for power sector Rs 3.05 lakh crore outlay. 100 more cities to be added in the next 3 years to the gas distribution network.
2. The government has announced the extension of benefits of the Free cooking gas LPG scheme Ujjwala scheme to an additional 1 crore people .
3. Rs 1,000 crore to solar energy corporation and Rs 1,500 to renewable energy development agency.
4. Finance Minister Nirmala Sitharaman announces a new gas pipeline project for Jammu and Kashmir.
5. Hydrogen energy mission for generating hydrogen out of green-powered sources.
6. Seven projects worth Rs 2,000 crore in PPP mode for ports in the country.
7. The government has announced an independent gas transport system operator for booking and coordination to ensure for unbiased allocation of natural gas transportation capacity.
TAXATION
1. Customs duty on some auto parts to be raised to 15 per cent Talking about GST, FM Sitharaman said that the government is focused to further ease the process. "Customs duty on copper scrap cut to 2.5 per cent. Customs duty on some auto parts to be raised to 15 per cent."
2. In the 75th year of Independence of our country, we shall reduce compliance burden on senior citizens. For senior citizens who only have pension and interest income, proposed exemption of filing of income tax returns.
3. Proposes policies to make it easy for foreign investors to invest in India's infrastructure projects.
4. 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.
Reassessment be opened for 10 years
1. Reassessment be opened for 10 years only if evidence of concealment of income of Rs 50 lakh or more in a year.
2. In serious tax evasion cases, only where there is evidence of concealment of income of Rs 50 lakh or more in a year, can reassessment be opened for 10 years. For others, assessmennt reopening only for 3 years.
3. NRIs to be spared from double taxation. New rules to be notified. Tax audit limit increased from Rs 5 crore to Rs 10 crore.
4. NRIs allowed to operate One Person Companies or OPCs in India Tax holiday for start-ups increased by one more year - till March 31, 2022 Late deposit of employee's contribution to PF by employers will not be allowed as deduction to employer
INDUSTRY
1. Definition Of Small Companies To Be Revised The definition of small companies to be revised by raising capital base to Rs 2 cr from current limit of Rs 50 lakh.
2. Government to increase maximum threshold paid-up capital of small companies from Rs 50 lakh to Rs 2 crore and increase the threshold of maximum turnover from Rs 2 crore to Rs 20 crore.
3. Government removes threshold limits of paid-up share capital of Rs 50 lakh and average annual turnover of Rs 2 crore over the past three financial years. Government has also eased requirements of residency for a person setting up a One person company from 182 days to 128 days in India.
DIGITAL
1. Finance Minister Nirmala Sitharaman earmarks Rs 1,500 crore for promoting digital mode of payment.
2. The government aims to spend Rs 1.97 lakh crore on various PLI schemes over the next 5 years. This is addition to the Rs 40,951 crore announced for the PLI for electronic manufacturing schemes. It is likely to attract global players in the Indian manufacturing sector.
TEXTILE
1. Finance Minister Nirmala Sitharaman announced in her budget speech the establishment of seven textile parks across the country.
LIQUIOR
1. The budget has reduced basic customs duty on liquor to 50% from 150%, it would be offset by the agricultural infrastructure cess of 100% imposed on tipple.
2. The new cess is only applicable on hard spirits such as scotch,whisky , rum and vodka, and not on foreign beer which at present attracts 110% tax.
TRAVEL AND TOURISM
1. The Centre has slashed the budgetary allocation for the Ministry of Tourism by 19% from Rs 2,500 crore in 2020-21 to Rs 2026.77 crore this year.
2. The budget has allocated Rs 1088.03 crore for development of tourism infrastructure for FY 2021-22 compared to Rs 1655 crore last fiscal.
STEEL
1. “The increased Capital expenditure in the infrastructure sector, including the healthcare infrastructure, will have a multiplier effect as it will create demand across product categories, including steel
2. The finance minister's announcement on customs duty reduction to 7.5% from 12.5% on semis, flat, and long products of non-alloy, alloy, and stainless steels was seen as a negative for the steel industry
3. FY22 capital expenditure increase by +34.5% at Rs 5.54 lakh crore will help the steel industry. The Rs. 1.25 lakh crore investment for Railways is a welcome move
ELECTRONICS
1. The Budget increased customs duty on certain items like printed circuit board assembly (PCBA), chargers, display panels, vibrator or ringer of mobile phones.
2. Customs duty on PCBA has been doubled to 20%, while a 10% duty has been levied on vibrator/ringer of mobiles and display panel and touch assembly. The duty on chargers and power adapters have also been increased to 20% from 15% now.
3. The Budget is in sync with the endeavour to target manufacturing of one billion indigenous mobile handsets, 60% of which is likely to be for exports and promote domestic manufacturing in the value chain of electronic system design and manufacturing to achieve $400 billion by 2025
