BY RUDRANSH SINGHAL
The Annual Budget basically refers to the annual financial statements released by the government of India containing the planning and decisions regarding finances, revenues, expenditures for the subsequent year. This budget can either be a surplus, deficit, or balanced.
What you must know about the Union Budget 2021-22?
The foundation of the Union Budget 2021-22 has been built on six pillars that clearly state the meaning of the Union Budget. These six pillars are as follows:
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
Economy
Expenditure- The government has decided to spend Rs 34,83,237 crore in 2021-22 as compared to Rs 34,50,305 crores spent for the year 2020-2021. There is an increase of 13% in expenditures as compared to the year 2020-21.
Receipts -The receipts (other than borrowings) are expected to be Rs 19,76,424 crores in 2021-22, which is 23% higher than the revised estimates of 2020-21.
Nominal GDP is expected to grow at 14.4% in 2021-22. There are no changes in income tax rates for individuals and corporations. The customs duty has been increased on some items such as cotton, silk, some auto and mobile parts. There is a tax deduction of up to Rs 1.5 lakh on interest on housing loans, tax holidays for affordable housing projects, profits of start-ups, and investing capital gains in start-ups. The IPO for LIC will also be completed in 2021-22.
Understanding the SIX Pillars
Infrastructure
Job creation through private and public investment by way of an infrastructure boost; set-up of textile parks, fishing hubs, and a financial services hub; an increase in the FDI limit in the insurance sector; allowing one-person companies to help start-ups; and allowing women in all categories of jobs and shifts.
Improving access to credit through setting up of a new asset reconstruction company and asset management company to take over stressed assets of banks, setting up of a Development Finance Institution to finance infrastructure projects, and equity infusion of INR 200 billion for public sector banks.
Rs. 1.97 lakh crores are to be invested in next 5 years for PLI schemes in 13 Sectors to create and nurture manufacturing global champions for an Aatma Nirbhar Bharat.
Advanced Traffic management system in all new 4 and 6-lane highways:
Speed radars
Variable message signboards
GPS enabled recovery vans will be installed
Due to the changes introduced,
Infrastructure has also been titled
as the “Backbone of the Nation”.
Rs. 3,05,984 crores over 5 years for a revamped, reforms-based and result-linked new power distribution sector scheme
A comprehensive National Hydrogen Energy Mission 2021-22 to be launched.
Health and Well Being
A major boost to health and well-being with a 137% increase in Budget allocation for the sectors, the launch of PM Aatmanirbhar Swasth Bharat Yojana and Mission Poshan 2.0(To strengthen nutritional content, delivery, outreach, and outcome), allocation of INR 350 billion for COVID-19 vaccines, and expansion of the health information portal to connect all public health labs across all states and union territories.
Support to MSMEs by doubling allocation for the Ministry of Micro, Small, and Medium Enterprises to INR 157 billion. Jal Jeevan Mission Urban aimed at better water supply nationwide
The Made-in-India Pneumococcal Vaccine to be rolled out across the country, from present 5 states – to avert 50,000 child deaths annually.
Rs. 1,41,678 crores over 5 years for Urban Swachh Bharat Mission 2.0.
Improving ease of doing business by setting up of a conciliatory mechanism for quick resolution of contractual disputes, strengthening of the NCLT system, adoption of e-courts, setting up of an alternative mechanism of debt resolution, decriminalizing of the Limited Liability Partnership (LLP) Act, setting up of a faceless dispute resolution mechanism for small taxpayers and increase in the threshold for tax audit from INR 50 million to INR 100 million.
Finance Minister said that Rs 69,000 crore is being provided for Health care including Rs 6400 crores for Prime Minister Jan Arogya Yojana (PMJAY). Setting up hospitals in the Public-Private partnership mode mainly in Aspirational Districts, using machine learning and AI, in the Ayushman Bharat scheme, "TB Harga Desh Jeetega” campaign to end Tuberculosis by 2025, expansion of Jan Aushadhi Kendra Scheme to all districts offering 2000 medicines and 300 surgical by 2024 are some of the other wellness measures in the Budget.
Reinvigorating Human Capital
School Education
15,000 schools to be strengthened by implementing all New Economic Policy components.
100 new Sainik Schools to be set up in partnership with NGOs/private schools/states
Higher Education
Legislation to be introduced to setup Higher Education Commission of India as an umbrella body with 4 separate vehicles for standard-setting, accreditation, regulation, and funding.
750 Eklavya model residential schools in tribal areas:
Unit cost of each school to be increased to 38 crores
For hilly and difficult areas, to 48 crores
Focus on creation of robust infrastructure facilities for tribal students
Proposed amendment to Apprenticeship Act to enhance opportunities for youth.
Rs. 3000 crores for realignment of existing National Apprenticeship Training Scheme (NATS) towards post-education apprenticeship, training of graduates and diploma holders in Engineering
Inclusive Development for Aspirational India
Ensured MSP at minimum 1.5 times the cost of production across all commodities.
With steady increase in the procurement, payment to farmers increased as under:
SWAMITVA Scheme to be extended to all States/UTs, 1.80 lakh property-owners in 1,241 villages have already been provided cards.
Agricultural credit target enhanced to Rs. 16.5 lakh crores in FY22 – animal husbandry, dairy, and fisheries to be the focus areas.
Rural Infrastructure Development Fund to be enhanced to Rs. 40,000 crores from Rs. 30,000 crores.
Innovation and R&D
Modalities of National Research Foundation announced in July 2019 –
Rs. 50,000 crores outlay over 5 years
To strengthen overall research ecosystem with focus on national-priority thrust areas
Rs. 1,500 crores for proposed scheme to promote digital modes of payment
National Language Translation Mission (NTLM) to make governance-and-policy related knowledge available in major Indian languages
PSLV-CS51 to be launched by New Space India Limited (NSIL) carrying Brazil’s Amazonia Satellite and some Indian satellites
Minimum Government, Maximum Governance
National Commission for Allied Healthcare Professionals already introduced to ensure transparent and efficient regulation of the 56 allied healthcare professions
The National Nursing and Midwifery Commission Bill introduced for the same in nursing profession
Proposed Conciliation Mechanism with mandate for quick resolution of contractual disputes with CPSEs
3,768 crores allocated for first digital census in the history of India
300 crores grant to the Government of Goa for the diamond jubilee celebrations of the state’s liberation from Portuguese
This year’s Budget lays focus on these pillars for reviving the economy - Health and Wellbeing, Physical and Financial Capital and Infrastructure, Inclusive Development for Aspirational India, Reinvigorating Human Capital, Innovation and R&D, and Minimum Government Maximum Governance. Several regulations around the Securities Market are proposed to be merged as one code. Several direct taxes and indirect taxes amendments were also proposed.
So one must think of this question ,
Can the Union Budget framed for this year revive the economic conditions in India?
Is this the ideal Union Budget that India needs?
While the wants are unlimited and different, this may definitely be a challenging task to overcome the problems that the Nation is facing today during the covid-19 pandemic.
ABOUT THE AUTHOR
Rudransh is a first-year student pursuing B.Com (H) and is extremely interested in Finance. He is an avid reader especially when it comes to topics like finance, investment, business, economics and many more. He likes to learn new skills and is always fascinated about sports.
Disclaimer: The views expressed in this article are the author’s own and do not necessarily reflect the views of the organization.
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