Union Budget 2021 in a Nutshell

Never before like the Budget, held its position Strongly. Union Budget 2021 has never been seen in 100 years. Dalal Street's reaction to the budget says it all, that this is the budget for future growth and a boost towards an ambitious $5 Trillion Indian economy by 2024. 

Big Bull Rakesh Jhunjhunwala has given 10 out 10 to Union Budget 2021.

Hopefully its execution will be just as same as its announcement.

Here is all you need to know about the Union Budget 2021: 

Huge Capex for Fiscal year ‘22 : 

FM Nirmala Sitharaman proposes to increase Capital Expenditure to ₹5.54 lakh Crore in FY’22, which is increased by 34.46% as compared to current FY’21.

Boost for Healthcare:

The world has experienced a tough year amid Covid-19, which taught us the importance of Health. The world is waiting for the Covid-19 vaccine and its distribution. Taking this year into account there is a huge monetary boost for the healthcare sector in the budget kitty. FM allocated ₹2,23,746 crore for Health in 2021-22, which is 137% jump as compared with ₹ 94,452 crore in 2020-21. She is provided 35,000 crore for the Covid-19 vaccine and promised to provide further funds, if required.

Big Disinvestment plans :

FM Nirmala Sitharaman announced a big divestment plan of ₹ 1,75,000 Cr  in 2021-22. This includes privatization of two public-sector banks and a state owned general insurance company. And strategic disinvestment of 

    1. BPCL 

    2. Air India 

    3. Shipping Corporation of India

    4. Container Corporation of India 

    5. IDBI Bank

    6. BEML

    7. Pawan Hans

Neelachal Ispat Nigam Ltd (NINL) among others would be completed in 2021-22. Also        announced a big IPO launch LIC in 2022. Apart from this FDI in insurance companies to    be hiked from 49% to 74%.

DFI Back :

The idea for creating DFI has failed earlier with IDBI and ICICI turning into banks. In this Budget, FM announced creation of a Development Financial Institution (DFI) for which from the budget kitty allocated   ₹20,000 crore to capitalize it. And allowing it to leverage debt of up to ₹5 lakh crore to provide much-needed financing to the capital-starved sector.

National Asset Monetization :

FM has announced in Union Budget 2021 that a National Monetization pipeline will be launched, with a dashboard to track the progress and provide visibility to investors.

 

FM Nirmala Sitharaman said, “Operating Public Infrastructure has to be Monetizing for financing new infrastructure construction.”

 

Laying out the roadmap for this initiative, FM Nirmala Sitharaman said, National Highway Authority of India (NHAI) & Power Grid Corporation of India Ltd (PGCIL) will be lead in this. ₹ 7,000 Crore worth of Transmission assets will be transferred to PGCIL.

Railways will monetize dedicated freight corridor assets.

A dedicated lot of airports will be monetized for operation and management.

Apart from this Central Warehousing Corp, Sports stadiums will also be monetized.

What is Asset Monetization?

Asset Monetization means what all investment made in public assets which have not yielded appropriate or potential returns be unlocked.

Agriculture:

For developing the Agriculture Sector, which is the Silver lining in Covid-19 Pandemic, FM announced the Agriculture Infrastructure Fund to be provided for the Agriculture Produce Marketing Committee (APMCs) for augmenting their infrastructure. There have been more than 1000 mandis to be integrated into the E-NAM(National Agriculture Market) market place.

To boost the Fisheries sector Five major fishing hubs to be developed including Chennai, Kochi and Paradip. A multifunctional seaweed park to be set-up in Tamil Nadu.

Employment : 

A all new portal to be launched which will maintain information regarding a gig and construction Workers. Gig and Platform workers social security to be extended. Margin capital required for loans via Stand-up India scheme reduced from 25% to 15% for SCs, STs and women.

Tax :

1. There are no IT filing for people above 75 years who earn interest from deposits and get pension.

2. For IT assessment cases reopening window reduced from 6 to 3 years and in case of serious tax evasion cases ₹ 50 Lakh or more, it can go upto 10 years.

3. There will be a tax holiday for one year for Affordable housing projects.

4. Compliance burden for small trusts to be eased whose annual receipts does not exceed ₹ 5 Crore.

5. Duty of copper scrap reduced to 2.5% .

6. Rationalized Custom Duty on Gold and Silver.

7. Duty on naphtha reduced to 2.5%.

8. Duty on solar inverters raised from 5% to 20%, and on solar lanterns from 5% to 15%.

9. All nylon products charged with 5% customs duty.

10. Tunnel boring machines to entice customs duty of 7%.

11. Increase in Customs Duty for cotton from 0 to 10%.

12. A new cess is proposed on certain items for Agriculture Infrastructure.

13. Development which includes items such as Apples, Crude palm oil, Urea, Crude Soyabean and Sunflower oil, Kabuli chana and peas.

No Relief for Common Man :

This has been a tough year for everyone. And more suffering for aam aadmi. Despite this there is no income tax relief in Budget 2021. No increase in standard deduction and no raise in tax slabs.

Eye on Elections - Not Unexpected :

We didn’t see that coming. Four poll-bound states get a boost of major highway projects, which includes Kerala (1,100 km - ₹ 65,000 Crore), Assam (1,300 km - ₹ 34,000 Crore), Tamilnadu (3,500 km - ₹ 1.03 Lakh Crore) and West Bengal (675 km - ₹ 25,000 Crore)

Infrastructure Boost : 

1. Vehicle scrapping policy introduced to mitigate old and unfit vehicles. All the vehicles to go through fitness tests in fitness canters. For personal vehicles it will be every 20 years and commercial vehicles every 15 years.

2. Highway Infrastructure and road construction works announced in West Bengal, Assam, Kerala and Tamil Nadu.

3. National Asset Monetizing Pipeline launched to have an eye and direct asset monetization process.

4. Massive Railways plan is created to make the Railway system future ready by 2030 and a target of 100 % electrification of Railways to be completed by 2023.

5. Metro services to be  expanded in 27 cities, and additional allocations for Chennai Metro Phase 2, Kochi Metro, Bengaluru Metro Phase 2A and B, Nagpur and Nashik Metros.

6. National Hydrogen Mission launched to generate Hydrogen from Green Power sources.

7. Ports Recycling capacity to be doubled by 2024.

8. A Gas pipeline project to be established in Jammu and Kashmir.

9. Pradhan Mantri Ujjwala Yojana extended to cover more 1 crore beneficiaries.

Mission : 

1. To develop Primary, Secondary and tertiary Healthcare, a new scheme PM Atma Nirbhar Swasthya Bharat Yojana, to be Launched.

2. Mission POSHAN 2.0 launched to improve nutritional value across 112 aspirational districts.

3. 17 new public health units to be operationalized at points of entry.

4. Modernization of health units at 15 seaports, 32 airports and land ports.

5. Jal Jeevan Mission Urban launched to provide better water supply nationwide.

6. Urban Swachh Bharat Mission to be Strengthened.

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