MoS Finance, Anurag Thakur said, “Budget will be in accordance with people’s expectations. Govt which functions on the mantra of ‘Sabka Saath, Sabka Vikas, Sabka Vishwas’ gave a new direction to India by announcing Aatmanirbhar package, protecting it from pandemic & bringing the economy back on track swiftly.”
The Union Budget papers will not be printed for the first time since Independence, due to the COVID-19 pandemic. Last year, the FM had ditched the leather briefcase for a traditional “bahi khaata” — or red, handmade ledger — saying that it was “high time we move on from the British hangover, to do something on our own”.
During the early trade, the S&P BSE Sensex rose nearly 500 points to an intraday high of 46,777.56, while the Nifty 50 climbed as much as 139.2 points to 13,773.80. At 9:27 am, the Sensex was trading at 46,690.77, up 405.00 points (0.87 percent), while the Nifty was at 13,736.65, up 102.05 points (0.75 percent).
~ FM Sitharaman announces PM Aatmanirbhar Swastha Bharat; to be launched with an outlay of 64,180 cr over 6 years
~ “Intend to focus on reduction of single-use plastic, air pollution and segregation of waste,” FM Sitharaman says while talking about Swacch Bharat and Swasth Bharat.
~ Govt to launch Mission Poshan 2.0; Jal Jeevan Mission Urban will be launched. “The Urban Swachh Bharat scheme will be implemented with an outlay of over Rs 1.4 lakh crore,” FM said.
~ Sitharaman announces Rs 35,000 crore for the Covid-19 vaccine. ‘The government is committed to providing more funds. The Budget outlay for health and welfare is Rs 2,23,846 crore in the 2021-22 Budget. This is a 137% increase,’ she adds
~ The govt has introduced the Scrapping policy to remove unfit vehicles on a voluntary basis. All private vehicles beyond 20 years and commercial vehicles older than 15 years old will have to undergo a fitness test.
The proposal is expected to offer a boost to the auto sector, both for CVs and private vehicles. Auto shares surged after the announcement, writes Anil Sasi.
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~ FM says 217 projects worth over Rs 1 lakh crore completed under National Infrastructure Pipeline
~ FM also announced that she would soon table a bill on DFI essentially to fill the gap in long-term finance for infrastructure sectors.
~ Seven ‘Textile Parks’ to be developed in the next 3 year
~ Railways to monetize dedicated fright corridor assets for operations and maintenance after commissioning
~ Rs 95,000 crore to be spent on roads in West Bengal, announces Finance Minister Sitharaman – the announcement for the state of Bengal got the loudest thumping of desks, this as the state goes to polls in a few months. “For 2022, I propose a sharp increase in capital expenditure at 5.54 lakh crore, from Rs 4.39 lakh crore in 2021. More economic corridors being planned to boost road infrastructure,” FM Sitharaman added. “Government aims to complete 11,000 km of national highway infrastructure this year,” FM Sitharaman said.
# Highway works proposed:
~ The government aims to spend Rs 1.97 lakh crore on various PLI schemes over the next 5 years, starting this fiscal. This is in addition to the Rs 40,951 crore announced for the PLI for electronic manufacturing schemes. It is likely to attract global players in the Indian manufacturing sector as the government is planning to offer plug-and-play infrastructure to the companies willing to come to India, Anil Sasi writes.
~ FM announces Rs 1.10 lakh crore outlay for railways, of which Rs 1.7 lakh crore is for capital expenditure
~ The government has announced a new central healthcare scheme in the Union Budget to strengthen the country’s healthcare infrastructure over the next six years. The Pradhan Mantri Atma Nirbhar Swasthya Bharat Yojana, which will operate in addition to the existing National Health Mission, has been allocated around Rs 64,180 crore.
This scheme is expected to be used to develop capacities of primary, secondary, and tertiary healthcare systems as well as existing national institutions over a period of six years, according to finance minister Nirmala Sitharaman. In addition to this, it would be used towards creating new institutions to cater to the detection and cure of new and emerging diseases.
During her budget speech, the minister said that investment in health in this budget has increased “substantially”, with a focus on strengthening preventive care, curative, and well-being of the population.
~ Centre to provide Rs 18,000 crore for public buses, announces FM
~ Given that there is a lack of finance for infrastructure and long gestation projects, Finance Minister Nirmala Sitharaman has announced the setting up of a Development Financial Institution.
# Structure and capital
~ The DFI will have statutory backing and Rs 27,000 crore capital. To differentiate it from DFIs that existed in the past, she said the DFI will be professionally managed.
The proposed DFI will be used to finance both social and economic infrastructure projects identified under the National Infrastructure Pipeline (NIP), according to finance ministry sources. – P Vaidyanathan Iyer writes.
~ The government is proposing to create a framework to give consumers alternatives to choose from more than one power distribution company, Finance Minister Sitharaman announced.
~ The move is aimed at offering competition at the operator level and more choice to consumers. Targets better efficiency levels in the distribution sector, Anil Sasi writes.
~ Coming to the power sector, FM announced Rs 3.05 lakh crore outlay. She also added that 100 more cities to be added in the next 3 years to the gas distribution network
~ Finance Minister announces a new gas pipeline project for Jammu and Kashmir
~ The government plans to further strengthen 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. With the government-imposed moratorium on admission of new cases likely to end by March 31, a number of MSMEs, which have not been able to earn enough during the fiscal are likely to be taken to insolvency by their creditors. The separate framework may help MSME owners avoid losing their company while continuing to pay the debt, Anil Sasi writes.
~ The government plans to sell part of its holding in Life Insurance Corporation of India through an initial public offering in the coming year. An amendment to the existing Act to facilitate the public offer, says FM Nirmala Sitharaman.
~ The government is committed to the welfare of farmers, says FM amid protests from opposition leaders. “MSP has gone through a sea change. Over Rs 75,000 crore paid to wheat farmers in 2020-21, 43.36 lakh benefited from this” she adds.
~ The government has announced the extension of benefits of the Ujjawala scheme to an additional 1 crore people. The scheme, which provides LPG connections with financial assistance from the central government and currently benefits 12 crore households, will be extended further to provide clean cheap cooking fuel, Anil Sasi writes.
~ The government has announced an independent gas transport system operator for booking and coordination to ensure unbiased allocation of natural gas transportation capacity. The government aims to address concerns of bias in the allocation of gas transportation capacity by players such as Gail involved in both the supply and transportation of natural gas, Anil Sasi writes.
~ FM Sitharaman proposes an increase in agriculture credit target to Rs 16.5 lakh crore. “The MSP regime has undergone a change to assure price that is at least 1.5 times the cost of production across all commodities. The total amount paid to paddy farmers surged to Rs 1.72 lakh crore in 2020-21.”
~ In its continuing focus on Atma Nirbhar Bharat, Finance Minister Nirmala Sitharaman announced in her budget speech the establishment of seven textile parks across the country.
~ The move is expected to be a boost for the local textile industry, with investment sops expected for downstream manufacturing, writes Sandeep Singh.
~ FM puts disinvestment receipts at Rs 1.75 lakh cr for the fiscal year beginning April 1, 2021. Two PSBs and one general insurance company to be divested, legislations amendments to be introduced in this session
~ A framework will also be put in place to give consumers alternatives to choose from more than one distribution company. This comes amid “serious” concerns over the viability of power distribution companies (discoms) in the country. The scheme is expected to provide assistance to discoms for infrastructure creation tied to financial improvements, including prepaid smart metering, feeder separation and upgradation of systems, said Finance Minister Nirmala Sitharaman. Discoms across the country are monopolies, whether government or private, said the minister. There is a need to provide a choice to the consumer, she said.
~ The past six years have seen a “number” of reforms and achievements in the country’s power sector, including the addition of 139 GW of installed capacity, connection of an additional 2.8 crore houses and addition of 1.41 lakh circuit kilometers of transmission lines.
~ National Education Policy got a good reception, FM said. “Over 15,000 schools to be qualitatively strengthened under National Education Policy,” she added
~ 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 around 15 million 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, writes Anil Sasi.
~ FM announces special scheme for the welfare of women and children in Assam and West Bengal. Rs 1,000 crore for Bengal, Assam tea workers
~ Fiscal deficit estimated at 9.5% of GDP for 2020-21
~ Forthcoming Census could be India’s first digital Census, says Sitharaman allocating Rs 3,768 crore for FY21
~ “Social security benefits will be extended to gig and platform workers. Minimum wages will apply to all categories of workers. Women will be allowed to work in all categories and also in night shifts with adequate protection. To further extend efforts towards unorganized labor force, I propose to launch a portal to collect relevant information on gig workers, building/construction workers among others. It’ll help formulate health, housing, skill, insurance credit &food schemes for migrant workers,” FM said.
~ Non-resident individuals with entrepreneurial potential are now enabled to set up One Person Companies (OPC) with no paid up capital and turnover restrictions, reducing the registration timeline from 182 days to120 days. Earlier only Indian resident citizens were permitted to set up OPCs. This would be attractive to the Indian Diaspora”.
~ Finance Minister Nirmala Sitharaman announced an allocation of Rs 300 crore to the state of Goa for celebrating the 60th anniversary of the liberation from Portuguese rule.
~ In the 75th year of Independence of our country, we shall reduce the compliance burden on senior citizens. For senior citizens who only have a pension and interest income, I propose exemption of filing of income tax returns: FM
~ The government plans to borrow another Rs 80,000 crore to fund the deficit this year. Gross market borrowings for next year has been pegged at Rs 12 lakh crore. A new roadmap for fiscal consolidation has been announced in the budget, writes Anil Sasi.
Impact: Government set to covert punishment procedural violations such as delays in filings from fines set by the court after conviction to penalties imposed by government authorities to speed up the resolution of non-compliance, writes Sandeep Singh
~ Government to increase maximum threshold paid-up capital of small companies from Rs 50 lakh to Rs 2 crore and increase the threshold of maximum turnover from Rs 2 crore to Rs 20 crore. More than 2 lakh additional companies come under the definition of small companies which have a lower compliance burden including lower penalties for violations and lower filing requirements, writes Sandeep Singh
~ Government removes threshold limits of paid-up share capital of Rs 50 lakh and an average annual turnover of Rs 2 crore over the past three financial years. The government has also eased requirements of residency for a person setting up a One person company from 182 days to 128 days in India. The move is aimed at encouraging businesses to register as One-person companies as they will not be forced to convert to private or public companies that have a greater compliance burden. Lower residency requirement will also encourage bor Resident and Non-resident Indians to set up One Person Companies, writes Sandeep Singh
~ The government has given relief measures for senior citizens by removing the need to file income tax returns for those aged over 75 years.
~ It has also announced a halving of the time frame for reopening of income-tax assessment cases from 6 years to 3 years. For reopening of serious tax evasion cases up to 10 years, the government has put in a monetary limit of cases involving over Rs 50 lakh in a year, writes Anil Sasi
~ This is expected to reduce instances of tax harassment of income taxpayers.
~ Sensex rises 1420.03 points, currently at 47,705.80. Nifty up by 362.70 points, currently at 13,997.30