Union Budget 2021-22 : Key Highlights

Presenting the Union Budget for 2021-22, Finance Minister Nirmala Sitharaman stated that the Budget proposals for this financial year stand on six pillars. Those six pillars are listed below:

1. Health and Wellbeing
2. Physical & 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

Significant announcements covered a slew of hikes in customs duty to promote Make in India. The fiscal deficit stands at 9.5% of the GDP and is calculated to be 6.8% in 2021-22. Personal income tax slabs continue to be as is.  

1. Health and Wellbeing

• Rs. 2,23,846 crore cost for Health and Wellbeing in BE 2021-22 as against Rs. 94,452 crore in BE 2020-21 – an addition of 137%
• Concentrate on growing three areas: Preventive, Curative, and Wellbeing
• In BE 2021-22, Rs. 35,000 crores for COVID-19 vaccine 
• The Made-in-India Pneumococcal Vaccine to prevent 50,000 child deaths annually
• Rs. 64,180 crore cost over 6 years for PM AatmaNirbhar Swasth Bharat Yojana

Nutrition

• Mission Poshan 2.0 to be launched:
  • To increase nutritional content, delivery, outreach, and result
  • Combining the Supplementary Nutrition Programme and the Poshan Abhiyan
  • Intensified approach to be adopted to enhance nutritional results across Aspirational Districts

2. Physical and Financial Capital and Infrastructure

• Rs. 1.97 lakh crore in the following 5 years to help manufacturing organizations become an essential part of global supply chains
• 7 Textile Parks to be built over 3 years
• National Infrastructure Pipeline (NIP) increased to 7,400 projects: around 217 projects worth Rs. 1.10 lakh crore concluded
• Rs. 20,000 crores to set up and obtain a Development Financial Institution(DFI) 
• Rs. 5 lakh crore lending portfolio to be built under the recommended DFI in 3 years
• Transmission assets worth Rs. 7,000 crore to be assigned to the PGCILInvIT
• Rs. 5.54 lakh crore capital expenditure in BE 2021-22
• A sharp rise in the capital budget of 34.5% over Rs. 4.12 lakh crore allocated in BE 2020-21
• Over Rs. 44,000 crore for the Department of Economic Affairs for projects displaying good progress on Capital Expenditure
• Rs. 1,18,101 lakh crore for Ministry of Road Transport and Highways
• Below the Rs. 5.35 lakh crore Bharatmala Pariyojana, higher than 13,000 km length of roads 
• Increasing the share of public transport in urban infrastructure  by the development of metro rail network and city bus service
• Another 8,500 km to be granted for construction by March 2022
• Additional 11,000 km of national highway corridors to be concluded by March 2022
• Rs. 1.03 lakh crore cost for 3,500 km of NHS in Tamil Nadu
• Rs. 1,10,055 crore for Railways of which Rs. 1,07,100 crore is for capital expenditure
• National Rail Plan for India (2030): to build a ‘future-ready’ Railway system by 2030
• 100% electrification of Broad-Gauge routes to be concluded by December 2023
• Broad Gauge Route Kilometers (RKM) electrification to strike 46,000 RKM, i.e. 72% by completion of 2021
• Western Dedicated Freight Corridor (DFC) and Eastern DFC to be approved by June 2022
• To improve the permissible FDI in the insurance sector from 49% to 74% and allow foreign ownership and handle with safeguards
• To decriminalize the Limited Liability Partnership (LLP) Act, 2008
• Easing Compliance requirement of Small businesses by improving their definition under Companies Act, 2013.
• Encouraging start-ups and innovators by incentivizing the establishment of One Person Companies (OPCs)

3. Inclusive Development for Aspirational India

• Ensured MSP at least 1.5 times the cost of production over all commodities.
• Agricultural credit target improved to Rs. 16.5 lakh crore in FY22 – animal husbandry, dairy, and fisheries to be the center fields
• Rural Infrastructure Development Fund to be improved to Rs. 40,000 crore from Rs. 30,000 crore
• ‘Operation Green Scheme’ to be increased to 22 perishable products, to promote value addition in farming and allied products
• Around 1.68 crore farmers registered and Rs. 1.14 lakh crore of trade value carried out through e-NAMs
• 1,000 more mandis to be combined with e-NAM to bring clarity and competitiveness.
• Investments to improve modern fishing harbors and fish landing stations- both marine and inland
• 5 major fishing harbors – Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat to be produced as centers of economic activity
• Scheme implementation so far included 86% of beneficiaries over 32 States and UTs
• Remaining 4 states to be combined in the next few months
• Portal to accumulate information on the unorganized labor force, migrant workers particularly, to help formulate schemes for them

4. Reinvigorating Human Capital

• 15,000 schools to be established by completing all NEP components. Shall serve as exemplar schools in their areas for mentoring others
• Legislation to be included to fix up the Higher Education Commission of India
• Production of a formal umbrella structure to meet all Govt. colleges, universities, research organizations in a city for greater synergy.
• Rs. 35,219 crores improved Central Assistance for 6 years till 2025-2026
• The proposed amendment to Apprenticeship Act to improve opportunities for youth
• Rs. 3000 crores for realignment of existing National Apprenticeship Training Scheme (NATS) towards a post-education apprenticeship

5. Innovation and R&D

• Modalities of National Research Foundation published in July 2019 –
  • Rs. 50,000 crore cost over 5 years
  • To increase the overall research ecosystem with a center on national-priority thrust areas
  • Rs. 1,500 crores for advanced scheme to encourage digital modes of payment
  • National Language Translation Mission (NTLM) to make governance-and-policy relevant knowledge available in major Indian languages
• PSLV-CS51 to be started by New Space India Limited (NSIL) leading Brazil’s Amazonia Satellite and some Indian satellites
• Rs. 4,000 crores across five years for Deep Ocean Mission survey exploration and preservation of deep-sea biodiversity

6. Minimum Government, Maximum Governance

• Actions being undertaken to bring changes in Tribunals to assure speedy justice
• National Commission for Allied Healthcare Professionals already started to ensure transparent and effective management of the 56 allied healthcare professions
• The National Nursing and Midwifery Commission Bill started the same in the nursing profession
• Rs. 3,768 crores allotted for the first digital census in the history of India
• Rs. 300 crore reward to the Government of Goa for the diamond jubilee celebrations of the state’s freedom from the Portuguese
• Rs. 1,000 crores for the welfare of tea workers in Assam and West Bengal through a particular scheme
• Measures of Rs. 34.83 lakh crore BE for investment in 2021-2022 
• The fiscal deficit in BE 2021-2022 is measured to be 6.8% of GDP. 
• The fiscal deficit in RE 2020-21 is secured at 9.5% of GDP supported through Government borrowings, and short term borrowings
• Net borrowing for the states provided at 4% of GSDP for the year 2021-2022 
• The final report including 2021-26 was presented to the President, holding vertical shares of states at 41%
• Stocks to UTs of Jammu and Kashmir and Ladakh would be given by the Centre
• On the Commission’s recommendation, Rs. 1,18,452 crore have been given as Revenue Deficit Grant to 17 states in 2021-22

Direct Taxes

• Exemption from filing income tax returns for senior citizens who only have a pension and interest income. The paying bank will deduct the necessary tax on their income.
• Reducing time limit for reopening of income tax assessment
• Constitution of a Dispute Resolution Committee for small taxpayers
• Income Tax Appellate Tribunal to be made faceless
• Increase in limit for tax audit for persons who carry out 95% of their transactions digitally
• Prefilling of  Gst returns will also cover capital gains from listed securities, dividend income, etc.
• Dividend payment to REIT/Invit to be exempted from TDS
• Eligibility for claiming tax holiday for startups proposed to be extended by one more year
• Additional deduction of Rs 1.5 lakh shall be available for loans taken up till 31 March 2022

Indirect Taxes

• Rationalization of custom duty structure by eliminating outdated exemptions
• Support to MSMEs hit by a recent sharp rise in iron and steel prices and relief to metal recyclers
• Rationalization of duties on raw material information to man-made textiles
• Rationalization of duty on gold and silver
• Increase in duty on solar inverters and lanterns to promote domestic production
• Agriculture infrastructure and Development Cess on a small number of items