UNION BUDGET 2021

What is the Union Budget?

The Union Budget is also known as the Annual Financial Statement. Article 112 of the Constitution of India lays down that it is a statement of the estimated expenditure and receipts of the Government for a particular year.

1. The Budget keeps the account of the finances of the government for the fiscal year (from 1st April to 31st March).
2. The Budget is presented on 1st February (until 2016, it was presented on the last working day of February) so that it can materialise before the commencement of the new financial year which starts on 1st April.
3. In 2017, a 92-year-old tradition was broken when the railway budget was merged with the Union Budget and presented together.
4. The Budget has to be passed by the Lok Sabha before it can come into effect.
5. The Union Budget is divided into Revenue Budget and Capital Budget. For more on these terms, check Union Budget – Important Economic Terms.
6. In the Union Budget, the disbursements and receipts of the government comprise the various types of government funds in India namely, the Consolidated Fund of India, the Contingency Fund and the Public Account.
7. The Economic Survey of India is released ahead of the presentation of the Budget. This document is prepared under the guidance of the Chief Economic Advisor and is presented for discussion in both Houses during the Budget session.

Union budget is aimed to achieve seamless delivery of services through Digital governance and to improve physical quality of life through National Infrastructure Pipeline.

Three prominent themes around which budget has been framed

1. Aspirational India in which all sections of the society seek better standards of living, with access to health, education and better jobs. This comprises of the following:

• • • 1. Agriculture, Irrigation and Rural Development.

Wellness, Water and Sanitation.

• • • 2. Education and Skills.

1. Economic development for all, indicated in the Prime Minister’s exhortation of “Sabka Saath, Sabka Vikas, Sabka Vishwas”.
2. Caring Society that is both humane and compassionate.

Important highlights of this year’s budget:

Health and Sanitation:

1. A new scheme, titled PM Atma Nirbhar Swasthya Bharat Yojana, to be launched to develop primary, secondary and tertiary healthcare
2. Mission POSHAN 2.0 to improve nutritional outcomes across 112 aspirational districts
3. Operationalisation of 17 new public health units at points of entry
4. Modernising of existing health units at 32 airports, 15 seaports and land ports
5. Jal Jeevan Mission Urban aimed at better water supply nationwide
6. Strengthening of Urban Swachh Bharat Mission

Education:

1. 100 new Sainik Schools to be set up
2. 750 Eklavya schools to be set up in tribal areas
3. A Central University to come up in Ladakh

Infrastructure:

1. Vehicle scrapping policy to phase out old and unfit vehicles –  all vehicles to undergo fitness test in automated fitness centres every 20 years (personal vehicles), every 15 years (commercial vehicles)
2. Highway and road works announced in Kerala, Tamil Nadu, West Bengal and Assam
3. National Asset Monetising Pipeline launched to monitor asset monetisation process
4. National Rail Plan created to bring a future ready Railway system by 2030
5. 100% electrification of Railways to be completed by 2023
6. Metro services announced in 27 cities, plus additional allocations for Kochi Metro, Chennai Metro Phase 2, Bengaluru Metro Phase 2A and B, Nashik and Nagpur Metros
7. National Hydrogen Mission to be launched to generate hydrogen from green power sources
8. Recycling capacity of ports to be doubled by 2024
9. Gas pipeline project to be set up in Jammu and Kashmir
10. Pradhan Mantri Ujjwala Yojana (LPG scheme) to be extended to cover 1 crore more beneficiaries

Tax:

1. No IT filing for people above 75 years who get pension and earn interest from deposits
2. Reopening window for IT assessment cases reduced from 6 to 3 years. However, in case of serious tax evasion cases (Rs. 50 lakh or more), it can go up to 10 years
3. Affordable housing projects to get a tax holiday for one year
4. Compliance burden of small trusts whose annual receipts does not exceed Rs. 5 crore to be eased
5. Duty of copper scrap reduced to 2.5%
6. Custom duty on gold and silver to be rationalised
7. Duty on naphtha reduced to 2.5%.
8. Duty on solar inverters raised from 5% to 20%, and on solar lanterns from 5% to 15%
9. All nylon products charged with 5% customs duty
10. Tunnel boring machines to attract customs duty of 7%
11. Customs duty on cotton raised from 0 to 10%
12. Agriculture infrastructure and development cess proposed on certain items including urea, apples, crude soyabean and sunflower oil, crude palm oil, kabuli chana and peas

Economy and Finance:

1. Fiscal deficit stands at 9.5% of the GDP; estimated to be 6.8% in 2021-22
2. Proposal to allow States to raise borrowings up to 4% of GSDP this year
3. A Unified Securities Market Code to be created, consolidating provisions of the Sebi Act, Depositories Act, and two other laws
4. Proposal to increase FDI limit from 49% to 74%
5. An asset reconstruction company will be set up to take over stressed loans
6. Deposit insurance increased from Rs 1 lakh to Rs 5 lakh for bank depositors
7. Proposal to decriminalise Limited Liability Partnership Act of 2008
8. Two PSU bank and one general insurance firm to be disinvested this year
9. An IPO of LIC to debut this fiscal
10. Strategic sale of BPCL, IDBI Bank, Air India to be completed

Agriculture:

1. Agriculture infrastructure fund  to be made available for APMCs for augmenting their infrastructure
2. 1,000 more Mandis to be integrated into the E-NAM market place
3. Five major fishing hubs, including Chennai, Kochi and Paradip, to be developed
4. A multipurpose seaweed park to be established in Tamil Nadu

Employment:

1. A portal to be launched to maintain information on gig workers and construction workers
2. Social security to be extended to gig and platform workers
3. Margin capital required for loans via Stand-up India scheme reduced from 25% to 15% for SCs, STs and women