The budget bestowed by the finance minister Nirmala Sitharaman on Monday has been a digital union budget for the first time. Adding to this, she stated that India’s people had reminded time and again that the fight against COVID-19 will extend to 2021. She gave her speech before presenting the budget, highlighting one of the main quotes from Rabindranath Tagore “Faith is the bird that feels the light and sings when the dawn is still dark.”
During her speech, Nirmala Sitharaman has focussed on these six sectors on which the budget mainly relies: Physical and financial capital, infrastructure, healthcare, inclusive development for aspirational India, reinvigorating Human capital, Innovation and R&D, and Minimum Government and maximum governance.
As stated by Nirmala Sitharaman, “only three times has a budget followed a contraction in the economy. All the contractions were a result of situations typical to India. This time, the contraction in our economy has is due to a global pandemic just like in several countries.”
She has said this and promised that the current government is fully prepared and ready to support the economy’s reset. This union budget of 2021-2022 is to revive the economy and bring it back to its own pace. This budget has provided full opportunity to the economy to come back in shape for sustainable growth.
The finance minister also stated that India has been in a massive fight with COVID 19. It has never been there in history, and the economy has seen this. She also stated that the political, economic, and strategic relations in the post-COVID-19 world take a chance, with India being the lowest in the number of death rate of 112 per million. And one of the most vulnerable active cases, which are 130 per million, has given the economy scope to revive and come back on track.
In May 2020, the government came up with the AtmaNirbhar Package. Adding to this, when the government saw the need for more packages to sustain recovery, they launched two AtmaNirbhar Packages named ANB 2.0 and ANB 3.0. The total amount spent on these packages was about 27.1 Lakh crores, which are more than 13% of the GDP.
The milestones stated by the finance minister for the year 2021 has been as follows:
1. This year is the 75th year of independence
2. 2021 is the 60 years of Goa’s accession to India
3. We have completed 50 years of the 1971 India-Pak war
4. 2021 will be the year of the 8th census of independent India
5. Now in this year, it is India’s turn at the BRICS presidency
6. This year will be the year for Chandrayaan-Mission 3
Now looking at the Union budget for all the sectors. The budget allotment has been as follows:
1. Ministry of Defence: 478,196 Crore
2. Ministry of Consumer affair, Food, and Public distribution: 256,948 crores
3. Ministry of Home affairs: 166,547 crores
4. Ministry of Rural development: 133,690 crores
5. Ministry of Agriculture and Farmers welfare: 131,531 crores
6. Ministry of Road, Transport, and Highway: 118,101 crores
7. Ministry of Railways: 110,055 crores
8. Ministry of Education: 93,224 Crore
9. Ministry of Health and Family welfare: 73,932 crores
10. Ministry of Housing and Urban affairs: 54,581 crores
Health and well-being budget
The healthcare is increased by 135% as the finance minister proposed an amount of Rs 2,200 crore for improving the health system and funding the vaccination for 1.3 billion people for their immune. The prime minister also stated that the budget’s primary purpose is to support its health and wellness due to the great pandemic hit by COVID 19. The new scheme named PM AtmaNirbhar Swath Bharat Yojana will be coming into action with a budget of Rs 64,180 crores over six years.
The plan focuses on strengthening the existing healthcare systems and bringing in a new institution for people’s well-being and treatment with the diseases. The Urban Swachh Bharat Mission 2.0 will be bought in with a total budget of Rs1,41,678 crores for five years, i.e., from 2021 to 2026. With the vehicle scrapping policy, the vehicles will be tested by the automated fitness center after 20 years for personal vehicles and 15 years for commercial vehicles. Funds of Rs 35,000 crores have been provided for the COVID 29 vaccine, further promising more funds if required.
Physical-financial capital and infrastructure budget
The highway projects also saw a significant boost in the four election-bound states, which the finance minister mentioned explicitly in her speech. The states are Tamil Nadu, West Bengal, Assam, and Kerala. In Tamil Nadu’s state, 3500 Km of National Highway work will be done with the investment of 1.03 Lakh crores. In Kerala, a budget of 6,000 crores passes to complete 1100 Km of the National Highway. A highway of 675 Km in West Bengal receives an amount of 25,000 crores. Also, Assam got a budget of 34,000 crores to complete 1300 Km of the National Highway.
For AtmaNirbhar Bharat’s scheme, the government has contributed Rs1.97 Lakh Crores over five years, starting from 2021-2022. capital expenditure has been put forward for 4.32 lakh crore. The metros are coming with two new technologies, ‘ MetroNeo’ and ‘MetroLite’ in Tier 2 cities and Tier 1 cities’ outlying areas. This will be given at a much lesser cost with the same experience, convenience, and safety in these cities. In total, seven more projects of 2,000 crores are put forward by the Major ports on Public-Private Partnership mode in FY21-22. In Jammu and Kashmir state, a gas pipeline project will start.
Inclusive development for aspirational India
For 2021-2022, the agriculture and farmers’ welfare have got a 5.63 percent increased budget while allotting them 1,31,531 crores. One Nation, One Ration card scheme, has been launched to claim the ration cards in any part of the country. Minimum wages will be there for all categories of workers. In contrast, on the other hand, women are free to work in all types and will ensure full protection.
Reinvigorating human capital
100 new Sainik Schools that will be functioning soon, in partnership with the NGO’s, private schools, and states. The Central University proposal in Leh is put on the table for supporting higher education in Ladakh. An allotment of 35,219 crores has been made for four crores SC students till the year 2025-2026. The Post Matric Scholarship Scheme has been bought in for the welfare of the Scheduled castes. A target to get new 750 Eklavya model residential schools targeting the tribal areas. An amount of 20 crores to 38 crores has been proposed for the schools in hilly and challenging locations.
Innovation and R&D
Due to the significant rise in digital modes of payment, there has been an allotment of 1500 crores to a proposed scheme. It will provide financial incentives considering the promotion of digital payment methods.
Minimum Government, Maximum Governance
- The upcoming census could be the first-ever digital census considering the history of India.
- An allocation of 3,768 crores is given for the year 2021-2022.
- A grant of 300 crores has been proposed to Goa’s government to celebrate their Diamond Jubilee year.
- An amount of 1000 crore has been given for tea workers’ welfare considering the women and their children.
The main 5 Tax Proposals
1. The senior citizens of 75 years of age or above are exempted from filing the income tax if the paying bank has deducted the amount paid for the tax. This is only available for the senior citizens who have interest income rather than pension income. This means that the senior citizens who are the pension earners will only be allowed to avail this benefit. Suppose the senior citizens are earning the same bank’s interest income where they get their pension income. In that case, they may also be able to avail this benefit.
2. A tax has been proposed on the income on interest income if it is more than Rs 2.5 lakh, which will be in action from April 1, 2022. The changes have been made due to misuse of the exemption rule.
3. The finance minister said that there would be higher TCS rates for the non-filers. The non-filers of the income tax return will be punished under the Income Tax Act 1961 and will be coming into action from July 1, 2021. This focused on the people whose TDS (Taxes Deducted at Source) or TCS (Taxes Collected at Source) of an amount of Rs50,000 or above have unlawfully not filed a return of income.
4. The income tax settlement commission has been terminated. The amendment will start on February 1, 2021
5. The tax return could now be filed three months before the ending of the assessment year or before completing the assessment. This will be applied from April 1, 2021. The government has bought in an amendment that the last date of filing the income return revised or belated would be reduced by three months.
The government is trying all it could to be back on track as a rising economy. But do you think this has led to a lot of trouble for middle-class men? What is your opinion on the budget? Do let us know in the comments section.