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Union Budget 2021 | Key takeaways from FM Nirmala Sitharaman's plan for India

From boosting healthcare, giving infrastructure a big push and extending support to the agriculture sector, Finance Minister Nirmala Sitharaman in her Budget laid out India's path to economic recovery. Here are all the highlights:

February 01, 2021 / 07:36 PM IST
Budget 2021 Rebuilding India
The 2021-22 Union Budget comes amid the COVID-19 pandemic, making it the most significant Budget for Finance Minister Nirmala Sitharaman. Here are the highlights from today’s speech:
Budget 2021 Rebuilding India
The COVID-19 pandemic has led to massive economic disruptions worldwide and while, in India, we have witnessed a resurgence, there is still a long way to go, the FM has said.
Since the last Budget, India’s economy reduced from 2.24 lakh crore nominal GDP to Rs 1.94 lakh crore. This was due to the lower-than-budgeted revenue growth and higher expenditure to tackle the negative impact of the coronavirus pandemic.
Since the last Budget, India’s economy reduced from 2.24 lakh crore nominal GDP to Rs 1.94 lakh crore. This was due to a lower-than-budgeted revenue growth and higher expenditure to tackle the negative impact of the coronavirus pandemic.
Another interesting piece of trivia is that the Budget will be paperless this year as the Finance Minister will read the Budget from a Made-in-India tablet. Additionally, the Budget will be available as a soft copy online for everyone.
The Budget has gone paperless this year, with the finance minister reading the proposals from a Made-in-India tablet. The softcopy of the BUdget will be available online for everyone.
FM Sitharaman and finance ministry officials brief ahead of Budget
FM Sitharaman and finance ministry officials brief President Ram Nath Kovind ahead of the Budget. (Image source: Rashtrapati Bhavan Twitter)
Union Cabinet approves the Budget 2021-22
Finance Minister Nirmala Sitharaman and MoS Finance and Corporate Affairs Anurag Thakur arrive in Parliament. Earlier, the Union Cabinet approved the Budget for the minister to table it in the House. (Image source: ANI Twitter)
Finance Minister present Budget 2021
Finance Minister gets ready to present the Union Budget 2021-22.
Atmanirbhar Bharat and Pradhan Mantri Yojana on budget 2021 by FM
Preparation of the Budget was undertaken under unprecedented circumstances, the minister told the Lok Sabha. Atmanirbhar Bharat and Pradhan Mantri Yojana were like three-four mini-Budgets in themselves. COVID-19 support measures accounted for 13 percent of GDP, while measures by the government and RBI amounted to Rs 27.1 lakh crore, the minister said.
FM Speaks: Budget 2021 Proposals
FM Sitharaman said her Budget speech rested on six pillars.
Atmanirbharta is not a new idea. Ancient India was largely self-reliant and a business centre of the world. It is an expression of 130 crore Indians who are confidence in their capabilities and skills.
Atmanirbharta not a new idea. Ancient India was largely self-reliant and a business centre of the world. It is an expression of 130 crore Indians who have confidence in their capabilities and skills.
FM Speech: all-round development and making India self-reliant
The government is committed to all-round development and making India self-reliant. The coronavirus outbreak an opportunity for India to emerge as 'the land of new hope'.
The proposals in Part A will further strengthen the Sankalp of Nation first- doubling farmers’ income, strong infrastructure, healthy India, good governance, opportunities for youth, education for all, women empowerment and inclusive development, among others.
The proposals in Part A would further strengthen the 'sankalp of Nation first'- doubling farmers’ income, strong infrastructure, healthy India, good governance, opportunities for youth, education for all, women empowerment and inclusive development, among others.
New centrally sponsored scheme
The minister introduced the Aatmanirbhar Health Yojana with an outlay of Rs 64,180 crore over six years. It would strengthen the National Centre for Disease Control and the government would also set up 15 health emergency centres, she said.
Jal Jeevan Mission with an outlay of Rs 2.87 lakh crore will be implemented to cover houses over five years. Budget 2021 will also launch Mission Poshan 2.0. Besides this, launch of urban 'Swacch Bharat Mission' 2.0 with an outlay of Rs 1.42 lakh crore has been made.
The FM announced Jal Jeevan Mission with an outlay of Rs 2.87 lakh crore to provide households with potable water over five years. Budget 2021 also proposes Mission Poshan 2.0 and  launch of urban 'Swacch Bharat Mission' 2.0 with an outlay of Rs 1.42 lakh crore.
A voluntary vehicle scrapping policy has been announced. Vehicles will undergo fitness test - 20 years for passenger vehicles and 15 years for commercial vehicles.
A voluntary vehicle scrapping policy has been announced. Vehicles will have to a undergo fitness test—passenger vehicles after 20 years and commercial vehicles after 15.
Budget 2021 highlights: DFI will be introduced
The government has set an ambitious target of building infrastructure in the country but funding these projects would have posed a steep challenge because of the revenue constraints and the stress on the loan books of banks. Moneycontrol reported that the finance minister Sitharaman was likely to announce a dedicated development financial institution to facilitate financing greenfield infrastructure projects.
Budget Highlights: Govt. to committed to provide more funds
A sum of Rs 35,000 crore has been set aside for COVID-19 vaccines. "We will provide more for COVID-19 vaccines if required," the minister said.
Government has committed Rs 1.97 lakh crore for PLI schemes covering 13 sectors. Further 7 textile parks will be launched over three years.
The government has committed Rs 1.97 lakh crore for PLI schemes covering 13 sectors. Seven textile parks will be launched over three years to provide employment and encourage the industry.
National Infrastructure Pipeline has been expanded to 7,400 projects. Futher, projects worth Rs 1.1 lakh crore have been completed under the National Infra Pipeline. A bill to set up DFI providing Rs 20,000 crore will also be introduced to launch the National Asset Monetisation Pipeline to fund new infra projects.
The National Infrastructure Pipeline has been expanded to 7,400 projects. Projects worth Rs 1.1 lakh crore have been completed under the National Infra Pipeline.
Will introduce a bill to set-up a development finance institution (DFI), capitalised with Rs 20,000 crore. Rs 5 lakh crore will be lent by DFI in three years' time. An asset monetisation dashboard will be created to provide clarity to investors. Further the Railways will monetise dedicated freight corridors. For 2021-22; capital expenditure seen at Rs 5.54 lakh crore which is up by 34.5 percent year-on-year (YoY).
The FM plans a bill to set up a development finance institution (DFI), capitalised with Rs 20,000 crore. A sum of Rs 5 lakh crore will be lent by DFI in three years' time. An asset monetisation dashboard will be created to provide clarity to investors. Further, the railways will monetise dedicated freight corridors. For 2021-22, capital expenditure seen at Rs 5.54 lakh crore, up 34.5 percent year-on-year (YoY).
NHAI has sponsored one InVit to attract investors. Thus 5 operational roads with Rs 5,000 crore value being transferred to NHAI InVit. NHAI operational roll roads are to be monetised. Meanwhile, Ralways will monetise dedicated freight corrdior after commissioning. The next lot of airports will also be monetised for operations and management. AAI airports in tier-2,3 cities and other railway assets are to be monetised.
The NHAI has sponsored one InVit to attract investors, thus five operational roads with Rs 5,000 crore value will be transferred to NHAI InVit. NHAI operational roll roads are to be monetised. Meanwhile, the railways will monetise dedicated freight corridor after commissioning. The next lot of airports will also be monetised for operations and management. AAI airports in tier-2 and3 cities are to be monetised as well, the minister has said.
Rs 1,10,055 crore to be provided for the Indian Railways.
The FM said a sum of Rs 1,10,055 crore will be provided for the Indian Railways.
Budget Highlight: More than 13,000 km of roads awarded under Bharat Mala project
More than 13,000 km of roads awarded under the Bharat Mala project. Around 3,800 km have been constructed in Bharatmala so far and 8,500 km will be awarded by March 2022, the minister said. An additional 11,000 km of NH corridor would be completed by March 2022. More economic corridors are being planned and 3,500 km of NH works was on in Tamil Nadu.
Budget 2021: National Highway Projects
The government will allot Rs 1.03 lakh crore for National Highway Projects in Tamil Nadu, Rs 65,000 core for National Highway Projects in Kerala and Rs 25,000 crore for West Bengal. The government will also allot an additional Rs 34,000 crore for National Highway Projects in Assam. (Representative image)
Union Budget 2021: Eastern Freight Corridor is to be taken up this year via PPP mode
The Eastern Freight Corridor is to be taken up this year via PPP mode. Also, three dedicated freight corridors —East Coast, East-west, North-south—are in the works. These will have an automatic system on high-density rail routes to avoid collisions. Completeelectrification of broad-gauge rail routes to be be done by December 2023. (Representative image)
FY22 Capex is targetted at Rs 5.54 lakh crore v/s FY21's Rs 4.39 lakh crore. Power transmission assets of Rs 7,000 crore is to be transferred to Power Grid InvIT. The Centre will also provide Rs 2 lakh crore to states and autonomous bodies for Capex. We will nudge states for more capital expenditure.
FY22 Capex targetted at Rs 5.54 lakh crore against s Rs 4.39 lakh crore in the previous year. Power transmission assets of Rs 7,000 crore to be transferred to Power Grid InvIT. The Centre will also provide Rs 2 lakh crore to states and autonomous bodies.
This comes after the COVID-19 pandemic-hit FY21 derailed the divestment plans for the year, falling substantially short of the target of Rs 2.1 lakh crore.
The government has proposed to divest two PSU banks and one general insurance company in FY22. Further, divestments of BPCL, CONCOR, Pawan Hans, and Air India will be completed in FY22. The divestment target for FY 22 has been set at Rs 1.75 lakh crore. "We will create a new list of companies for divestment," the minister said. The government will form an SPV for monetising land owned by state-owned PSUs and set up a separate administrative structure for co-operatives.
Budget 2021: Ujjwala scheme will be expanded to over 1 crore more beneficiaries
The Ujjwala scheme will be expanded to over 1 crore more beneficiaries. Will add 100 more districts in the next three years to the city gas distribution network. A gas pipeline project will be taken up in Jammu and Kashmir.
The government is also looking to double ship recycling capacity by 2024. Seven port projects worth more than Rs 20,000 crore will be undertaken in FY22 via PPP.
The government is also looking to double ship recycling capacity by 2024. Seven port projects worth more than Rs 20,000 crore to be undertaken in FY22 via PPP.
A scheme to assist discoms will be launched with an outlay of over Rs 3 lakh crore. The Ujjwala Scheme will cover an additional 1 crore beneficiaries.
A scheme to assist discoms will be launched with an outlay of over Rs 3 lakh crore.
Social security benefits to be extended to gig and platform workers. Employee State Insurance Corporation benefits too would be provided. Women will be allowed to work in all categories in night shifts too.
Social security benefits to be extended to gig and platform workers. Employee State Insurance Corporation benefits too would be provided. Women will be allowed to work in all categories in night shifts too.
The '1 Nation 1 Ration Card' plan is under implementation by 32 States & UTs. The Centre will lauch a portal to collect data on migrant workers. Further, social security benefits will be extended to platform and gig workers. Minimum wages will apply to all categories of workers.
'One Nation One Ration Card' plan under implementation in 32 states & UTs. The Centre will launch a portal to collect data on migrant workers. Minimum wages will apply to all categories of workers.
FY21 fiscal deficit pegged at 9.5% of GDP. Further, the FY22 fiscal deficit has been pegged at 6.8% of GDP. Gross market borrowing target is at Rs 12 lakh crore for FY22. We will approach the market for additional Rs 80,000 crore to fund FY21 fiscal deficit. We hope to get back on the fiscal consolidation path by FY26.
FY21 fiscal deficit pegged at 9.5% of GDP and that for FY22 at 6.8% of GDP. The gross market borrowing target is at Rs 12 lakh crore for FY22. "We will approach the market for additional Rs 80,000 crore to fund FY21 fiscal deficit. We hope to get back on the fiscal consolidation path by FY26, the finance minister said.
100 new Sainik schools to be set up in partnership with NGOs, private schools and states. A new legislation will be introduced this year to set up a Higher Education Commission. A central university will also be set up in Leh for access to higher education in Ladakh.
As many as 100 new Sainik schools to be set up in partnership with NGOs, private schools and states. A bill will be introduced this year to set up a Higher Education Commission. A central university will also be set up in Leh for access to higher education in Ladakh.
No Income tax (I-T) filing for senior citizens above 75 years of age having only pension. Further, the timeline for re-opening of tax returns has been reduced to three years from six years. To set up faceless dispute resolution committee for small taxpayers.
No income tax (I-T) filing for senior citizens above 75 years of age having only pension and interest income. Further, the timeline for re-opening of tax returns has been reduced to three years from six years. A 'faceless' dispute resolution committee for small taxpayers has also been proposed.
1. Proposed to make I-T Appellate Tribunal Faceless. 2. Tax audit threshold raised to Rs 10,000 crore for digital transactions. 3. Dividend payment by REITs and InvITs not subject to TDS. 4. Advance tax liability to arise only after payment of dividends.
Other tax proposals include a 'faceless' I-T appellate tribunal, tax audit threshold raised to Rs 10,000 crore for digital transactions, dividend payment by REITs and InvITs not to be subjected to TDS and advance tax liability to arise only after the payment of dividends.
Budget Highlight: More than 13,000 km of roads awarded under Bharat Mala project
The forthcoming census would be the first digital census in the history of India. For this, Rs 3,768 crores in this year 2021-22, the minister said.
To reduce litigation for small taxpayers a dispute resolution committee has been proposed. This will be faceless to ensure efficiency and transparency. Anyone with a taxable income up to Rs 50 Lakhs & disputed income up to Rs 10 Lakhs are eligible to approach committee.
To reduce litigation for small taxpayers a dispute resolution committee has been proposed. This will be faceless to ensure efficiency and transparency. Anyone with a taxable income up to Rs 50 lakh and disputed income up to Rs 10 lakh will be eligible to approach the committee.
1. No deduction to employers for late deposit of employee contribution to Provident Fund. 2. To extend eligibility for startups to claim tax holiday by 1 year. 3. Will take steps to further smoothen GST and reduce inverted duty structures in GST. 4. Custom Duty Policy should promote domestic manufacturing - for which we are cutting duty on copper scrap to 2.5 percent; looking to bring bylon at par with polyester with respect to taxation; and duty on Naptha reduced to 2.5 percent. We are also rationalising customs duties on Gold and Silver.
The minister also said there will be no deduction to employers for late deposit of employee contribution to the provident fund. She also extended eligibility for startups to claim tax holiday by 1 year.  Steps to further smoothen GST and reduce inverted duty structures in GST planned. Custom Duty Policy should promote domestic manufacturing, the minister said, as she cut duty on copper scrap to 2.5 percent, on Naptha to 2.5 percent. She also proposed cutting customs duty on gold and silver.
Custom Duty Policy should promote domestic manufacturing for which we are. 1. Cutting duty on copper scrap to 2.5 percent. 2. Looking to bring bylon at par with polyester with respect to taxation. 3. Duty on Naptha reduced to 2.5 percent. 4. We are also rationalising customs duties on Gold and Silver.
Custom Duty Policy should promote domestic manufacturing for which we are. 1. Cutting duty on copper scrap to 2.5 percent. 2. Looking to bring bylon at par with polyester with respect to taxation. 3. Duty on Naptha reduced to 2.5 percent. 4. We are also rationalising customs duties on Gold and Silver.
Duty on shrimp feed in increased to 15% from 5%. Customs duty on cotton raised to 10% from nil. The new Customs Duty structure will be put in place by October 1, 2021.
Duty on shrimp feed increased to 15% from 5%. Customs duty on cotton raised to 10% from nil. The new customs duty structure will be put in place by October 1, 2021.
MCA Companies Act, LLP Act: 1. Easing Compliance requirements of Small Companies – Threshold increased to Share Capital upto Rs.2 crore and Turnover upto Rs.20 crore will be Small Companies. 2. Allow One Person Companies (OPC) to grow without any restriction in Share Capital or Turnover. NRIs will be allowed to set-up OPCs. Presence in India of 120 days in a year enough to start an OPC. 3. Launching MCA Version 3.0 – E-Scrutiny, E-Adjudication and Compliance management to be simplified. 4. Decriminalisation of LLP Act, 2008. 5. Tribunals to be rationalised.
MCA Companies Act, LLP Act: 1. Easing compliance requirements of Small Companies – threshold increased to share capital of up to Rs 2 crore and a turnover of up to Rs 20 crore will be small companies. 2. Allow One Person Companies (OPC) to grow without any restriction in Share Capital or Turnover. NRIs will be allowed to set-up OPCs. Presence in India of 120 days in a year enough to start an OPC. 3. MCA Version 3.0 – e-scrutiny, e-adjudication and compliance management to be simplified. 4. Decriminalisation of LLP Act, 2008. 5. Tribunals to be rationalised.
Direct Taxes: 1. For Foreign Investors – lower treaty rate benefit will be given. 2. Affordable Housing – Additional Interest deduction (Sec 80EEA) of Rs.1.5 lakhs to be extended for loans taken till 31st March, 2022. 3. Affordable Housing Projects – Tax Holiday extended till 31st March, 2022. 4. Tax Holiday for Capital Gains for Aircraft Leasing Companies and Tax Exemption to Lease paid to Foreign Persons. 5. Pre-Filling of Returns – Details of Capital Gains, Dividend Income and Interest income will be pre-filled in the returns. 6. Relief to Trusts – Charitable trusts running Hospitals and Educational Institutions relief increased from Rs.1 crore to Rs.5 crore. 7. Employee contribution not paid by employer will not be allowed as a deduction. 8. Tax holiday for Start-Ups extended to 31st March, 2022. Capital Gains exemption on investment in start ups also extended to 31s March, 2022.
Direct Taxes: 1. For Foreign Investors – lower treaty rate benefit will be given. 2. Affordable Housing – Additional Interest deduction (Sec 80EEA) of Rs.1.5 lakhs to be extended for loans taken till 31st March, 2022. 3. Affordable Housing Projects – Tax Holiday extended till 31st March, 2022. 4. Tax Holiday for Capital Gains for Aircraft Leasing Companies and Tax Exemption to Lease paid to Foreign Persons. 5. Pre-Filling of Returns – Details of Capital Gains, Dividend Income and Interest income will be pre-filled in the returns. 6. Relief to Trusts – Charitable trusts running hospitals and educational institutions relief increased from Rs.1 crore to Rs.5 crore. 7. Employee contribution not paid by employer will not be allowed as a deduction. 8. Tax holiday for startups extended to March 31, 2022. Capital Gains exemption on investment in startups also extended to March 31, 2022.
The power distribution companies across the country are monopolistic and a need to provide choice to the consumers. A framework will be put in place to give consumers alternatives to choose from among more than one distribution company.
The power distribution companies across the country are monopolistic and a need to provide choice to the consumers. A framework will be put in place to give consumers alternatives to choose from among more than one distribution company. A revamped reform based results linked power distribution sector scheme will be launched with an outlay of Rs 3,05,984 crore over five years.
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