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Budget 2021: Six Pillars to Take Forward India’s Growth Journey Post-Pandemic

Acknowledging that the budget this year has been precedented under unprecedented circumstances, Finance Minister Nirmala Sitharaman counted the interventions that the government made in responding to pandemic situation through Aatmanirbhar Bharat package.

In a big relief for senior citizens, FM Nirmala Sitharaman announced that “on 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, I propose exemption of filing of income tax returns.”

To provide ease to the taxpayer and preventing undue harassment, the FM announced the reduction of the time limit for reopening of assessments (tax assessments) to 3 years from the present 6 years”

An additional deduction of interest, amounting to Rs 1.5 lakh, for loan taken to purchase an affordable which was announced in the budget of July 2019 is extended to another year.
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The finance minister laid out the budget through six pillars.

First Pillar- Health and Wellbeing
  • Finance Minister announces PM Aatma Nirbhar Swastha Bharat Yojana with allocation of Rs 64,180 crore over 6 years to develop health capacity.
  • 1,000 rural, 7,000 urban health centres, new labs; strengthening public health care units and building new ones.
  • Mission Poshan 2.0 in aspirational districts.
  • Made in India pneumococcal vaccine to be rolled out across India, which will save the lives of 50,000 children. ₹35,000 crore for COVID vaccine in 2021-22; more funds if needed.
  • Under Jal Jeevan Mission, with ₹2.87 lakh crore outlay will cover 4,378 urban local bodies to be coveered – 2.6 crore household tap connections and sanitation coverage across the AMRUT cities
  • Waste management gets further focus under Swachh Bharat along with the aim of addressing air pollution. Total financial allocation -1.41 lakh crore for five year period.
  • Allocation of ₹2,200 crore rupees for 47 cities with million plus population to tackle air pollution.
  • Voluntary vehicle scrapping policy to promote fuel efficient, environment friendly vehicles. 20 years in case of personal vehicles and 15 years in case of commercial vehicles. Vehicle fitness tests at automated centres to check for its life.
  • Overall, ₹2,83,846 lakh crore for health and wellness sector which also includes ₹35,000 crore for Covid-19 vaccines. This amounts to a 137 percent increase in the health allocations from previous FY.
Second Pillar- Physical and Financial Capital and Infrastructure
  • For 5 trillion dollar economy, manufacturing has to grow in double digits and need to be part of global supply chain with cutting edge technology
  • PLI schemes announced for 13 sectors – ₹1.97 lakh crore for next 5 years – jobs for youth, making global champions
  • In textile, plug and play facility to create global export champions. 7 textile parks over the next three years.
  • Under National Infrastructure Pipeline, the scheme has been expanded to 7,400 projects, with over 2,000 plus projects already sanctioned
  • ₹1.03 lakh crore has been allocated to develop 3,500 km National Highways in Tamil Nadu. 1,100 kms of Highways to be developed in Kerala.
  • ₹25,000 crore has been allocated to develop 6,600 km highway corridor in West Bengal including upgrading of existing road connecting Kolkata and Siliguri
  • Three step process – institutional structures; monetization of assets and enhancing share of capex in state and central budgets
  • Long term debt financing for infra necessary for building. For this, a bill to set up a development financial institution to be introduced. ₹20,000 crore for capitalization to be allocated, lending portfolio of 5 lakh crore within 3 years’ time.
  • FPI based debt financing to be enabled with suitable legislative amendments; debt augmenting funds for RE and other infra to be allowed
  • Monetizing operating public infrastructure assets key financing option for new infra construction – National Monetization pipeline to be launched for the same – dashboard to track progress and provide visibility to foreign investors
  • 13,000 km under the ₹5 lakh crore Bharatmala Yojana – 3,800 km already constructed, and another 8,500 km is being awarded
  • 11,000 km national highway corridors being awarded

Railways:

  • Record sum of ₹1.1 lakh crore has been allocated for railways with ₹1.07 lakh for capital expenditure alone.
  • Dedicated Freight Corridor will be commissioned by 2022. Railways will complete electrification works by Dec 2023.

Urban infra:

  • ₹18,000 crore for the augmentation of Metro and city bus services.
  • Metro lite and metro-neo to be provided at cost in tier II and peripheral areas of tier I cities
  • Central counterpart funding for Kochi Metro phase II of 11.5km at ₹1,900 crore; Chennai phase II of 118 km ₹64,000 crore; Bengaluru Phase IIa and IIb 58km at ₹14,788 crore; Nagpur Phase II and Nashik getting ₹79,000 crore and ₹2,000 crore respectively

Energy:

  • In the power sector, revamped reform-based result linked scheme with 3.05 lakh crore over 5 years to be launched. infra creation support includes 3phase smart metering, feeder separation etc.
  • In gas sector, Ujjwala to be extended to cover 1 crore more beneficiaries, 100 more districts to be added to City gas distrivtuion

Financial capital:

  • Strategic disinvestment of companies including BPCL, Air India, Pawan Hans, IDBI Bank, Container Corporation of India to be completed in 2021-22.
  • Further infusion of ₹20,000 crore for public sector banks
  • Further strengthening of the NCLT 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.
Third Pillar- Inclusive Development

Emphasising the focus that the government has already, FM Sitharaman pointed out that Increased public procurement at MSP is proof of government’s intent towards farmer welfare. While for procurement of wheats, farmers got only ₹33,874 crore in 2013-14, it increased to ₹62,802 crore in 2019-2020.

Now,

  • SWAMITVA Scheme has been extended to all villages of India.
  • The credit facility for farmers has been extended to ₹16.5 lakh crore in 2021.
  • 5 major fishing hubs to be developed with connectivity to waterways. A multipurpose Seaweed park in Tamil Nadu.
  • Under One Nation One Ration Card is implemented by 32 states and UTs covering 69 crore beneficiaries as of now; remaining ones to be integrated within this year.
  • Social security benefits to be extended to gig and platform workers. Minimum wages will apply to all categories of workers and will be covered under ESIC. This will impact nearly crore gig workers in India, in addition to online platform providers across sectors such as transportation (Uber and Ola), food delivery (Swiggy and Zomato), and the contract workers in IT and software firms.
  • ₹1,000 crore for Bengal, Assam tea workers
Forth Pillar- Human Capital
  • 15,000 schools to be qualitatively strengthened to meet National Education Policy requirements.
  • 100 new SAINIK schools with NGOs and states in partnership
  • Higher education commission bill to be introduced this year
  • Central University in Leh
  • Eklavya Model Schools – unit cost to be increased to 38 crore from 20 crore and 48 for difficult to access areas
  • Revamped scholarship scheme – ₹35,219 crore for 6 years to benefit 4 crore SC students
Fifth Pillar- Innovations and R&D
  • ₹1,500 crore for scheme to give financial incentives for digital payment modes
  • National languages portal for enabling language
  • PSLV launch with Amazonia satellite of Brazil proposed
  • Gaganyaan – 4 Indian astronauts being trained in Russia – 1st unmanned launch in Dec 2021
  • Deep Ocean Mission with ₹4,000 crore outlay over 5 years – survey and exploration for conservation of deep sea biodiversity.
  • The forthcoming census would be the first digital census in the history of India. For this monumental task, ₹3,768 crores in this year 2021-22 allocated.
Sixth Pillar- Minimum Government, Maximum Governance
  • Steps across tribunal for speedy justice delivery – further rationalization
  • National Commission for Allied Healthcare Professional in Parliament for ensuring healthcare professionals
  • National Nursing and Midwifery Bill to be introduced
  • Conciliation Mechanism for contract dispute resolution to be set up

 

After deliberating the grand proposals through six pillars, FM Nirmala Sitharaman proposed some measures with respect to taxation.

It is now made easy for foreign investors to invest in India’s infrastructure projects. A proposal 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 further reduce litigation for small taxpayers, a dispute resolution committee which will be faceless will be constituted. Anyone with a taxable income up to ₹50 Lakhs and disputed income up to ₹10 Lakhs will be eligible to approach committee.

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