For the first time in India, Finance Minister Nirmala Sitharaman had announced the paperless union budget 2021-2022 digitally through made in India tablet and stated “India as the dawn of a new era where India is well poised to truly be the land of promise and hope.” As stated in the budget speech, that budget of the year 2021-2022 is based on the 6 pillars namely:
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
Let’s summarise the key highlights stated in the Budget 2021-2022:
1. Health and Wellbeing
- Rs. 2,23,846 crore outlay for Health and Wellbeing in 2021-22 as against Rs. 94,452 crore in 2020-21 which shows an increase of 137%
- Focus on strengthening three areas: Preventive, Curative, and Wellbeing
- Steps for improving health and wellbeing
- Rs. 35,000 crore for COVID-19 vaccine
- The Made-in-India Pneumococcal Vaccine to be rolled out across the country, from present 5 states – to avert 50,000 child deaths annually
- New centered sponsored scheme to be launched namely PM Aatma Nirbhar Swasth Bharat Yojana with outlay of Rs. 64,180
- National Institution for One Health and 4 regional National Institutes for Virology
- Strengthening of National Centre for Disease Control (NCDC)
- Mission Poshan 2.0 to be launched to strengthen nutritional content, delivery, outreach and outcome
- Universal coverage of water Supply with Jal Jeevan Mission (Urban) to be launched for providing tap connections and handling liquid waste management
- Urban Swachh Bharat Mission 2.0
- Voluntary vehicle scrapping policy to phase out old and unfit vehicles, after 20 years for personal vehicles and after 15 years for commercial vehicles
2. Physical & Financial Capital and Infrastructure
Physical Infrastructure
- Production linked Incentives schemes in 13 sectors to create and nurture manufacturing global champions and to bring scale and size in key sectors
- Mega Investment Textiles Parks (MITRA) scheme, 7 textile parks to be established over 3 years to boost employment generation and exports
- National Infrastructure Pipeline (NIP) expanded to 7400 projects for creating institutional structures, big thrust on monetizing assets, and to enhance the share of capital expenditure
- Infrastructure financing and to set up a Development Financial Institution (DFI) to act as a provider
- Amendment in InvITs and REITs legislation for debt financing
- National Monetization Pipeline to be launched
- Rs. 5.54 lakh crore for capital expenditure
- Rs. 2 lakh crore to States and Autonomous Bodies for their Capital Expenditure
- Rs. 1,18,101 lakh core for Roads and highways infrastructure
- Flagship expressways: Delhi- Mumbai, Bengaluru Chennai Expressway, Kanpur-Lucknow, Delhi- Dehradun, Raipur- Visakhapatnam, Chennai Salem corridor, Amritsar- Jamnagar, Delhi- Katra
- Advanced traffic management system
- Rs. 1,10,055 crore for Railways of which Rs. 1,07,100 crore is for capital expenditure
- MetroLite and MetroNeo technologies to provide metro rail systems at a much lesser cost
- Extention of Ujjwala Scheme to cover 1 crore more beneficiaries
- A new gas pipeline project in Jammu & Kashmir
Financial Capital
- A new single Securities Markets Code to be evolved
- Development of a world class Fin tech hub at the GIFT-IFSC
- Development of bond market by purchasing investment grade debt securities both in stressed and normal times
- Regulated Gold Exchanges
- Development of an investor charter as a right of all financial investors
- Capital infusion of Rs. 1,000 crore to solar energy corporation of India and Rs. 1500 crore to Indian Renewable Energy Development Agency
- Increment in FDI limit from 49% to 74% and allow foreign ownership and control with safeguards
- To setup Asset Reconstruction Company Limited and Asset Management Company
- Recapitalization of Public Sector Banks
- Loan eligibility under SARFAESI Act, 2002 proposed to be reduced from Rs. 50 lakh to Rs. 20 lakh for NBFCs with minimum asset size of Rs. 100 crore
Company Matters
- Decriminalization of LLP Act, 2008
- Revision of definition under Companies Act, 2013 by increasing their thresholds for Paid up capital from “not exceeding Rs. 50 Lakh” to “not exceeding Rs. 2 Crore” and turnover from “not exceeding Rs. 2 Crore” to “not exceeding Rs. 20 Cr” for easing compliance requirement
- Promoting startups and innovators for the incorporation of One Person Company
- Allowing growth and conversion into any other form
- Reduction from 182 days to 120 days to setup an OPC for an Indian citizen
- Allowing NRIs to incorporate OPC in India
- Faster resolution of cases by strengthening NCLT framework, implementation of e-courts system, alternate method of debt resolution and special framework for MSMEs
- Launch of MCA 21 Version 3.0 in 2021-22
Disinvestment and Strategic Sale
- Estimated receipts of Rs. 1,75,000 crore from disinvestment
- Strategic disinvestment of BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam limited, etc. to be completed in 2021-22.
- Two public sector banks and one general insurance company to be privatized
- Special purpose vehicle in the form of a company to monetize idle land
- A revised mechanism for ensuring timely closure of sick or loss-making CPSEs
- Treasury Single Account System for autonomous bodies
- Separate Administrative structure to streamline the Ease of Doing Business for cooperatives
3. Inclusive development for Aspirational India
- Ensured MSP at minimum 1.5 times the cost of production across all commodities
- Increment in the payment to farmers
- Extension of SWAMTIVA Scheme to all states /UTs
- Rural Infrastructure Development Fund to be enhanced to Rs. 40,000 crore
- To double the Micro-irrigation Fund to Rs. 10,000 crore
- Operation Green Scheme to be extended to 22 perishable products
- 1,000 more mandis to be integrated with e-NAM to bring transparency and competitiveness
- APMCs to get access to the Agriculture Infrastructure Funds for augmenting infrastructure facilities
- Development of modern fishing harbours
- Multipurpose Seaweed Park in Tamil Nadu to promote seaweed cultivation
Migrant Workers and labourers
- One Nation One Ration Scheme to claim rations anywhere in the country
- Portal for collecting information of unorganized labour force, migrant workers
- Implementation of 4 labour codes underway
- Social security benefits and platform for workers
- Minimum wages coverage under the ESIC applicable for all categories of workers
- Women workers to be allowed in all categories including night shifts with adequate protection
- Single registration and licensing and online returns to ease compliance burden
- Stand up India scheme for SCs, Ss, and women
- Rs. 15,700 crore budget allocation to MSME Sector
4. Reinvigorating Human Capital
- 15,000 schools to be strengthened by implementing NEP components and 100 new Sainik Schools to be set up in partnership with NOs/private schools/states
- Introduction of legislation to set up Higher Education Commission of India
- Creation of a formal umbrella structure to cover all government colleges, universities, research institutions in a city for greater synergy
- Central University to come up in Leh for accessibility of higher education in Ladakh
- 750 Eklavya model residential schools in tribal areas
- Focus on the creation of robust infrastructure facilities for tribal students
- A proposed amendment to Apprenticeship Act to enhance opportunities for youth
- Rs. 3000 crores for realignment of existing National Apprenticeship Training Scheme (NATS) towards a post-education apprenticeship, training of graduates and diploma holders in Engineering
- With UAE to benchmark skill qualifications, assessment, certification, and deployment of certified workforce
5. Innovation and R &D
- Modalities of National Research Foundation announced in July 2019
- Strengthen overall research ecosystem with a focus
- To promote digital modes of payment
- 4 Indian astronauts being trained on generic Space Flight aspects in Russia
- First unmanned launch in slated for December 2021
6. Minimum Government, maximum Governance
- To bring reforms in tribunals to ensure speedy justice
- Introduction of National Commission for Allied Healthcare Professionals and the National Nursing and Midwifery Commission Bill
- Conciliation mechanism with a mandate for fast resolution of contractual disputes with CPSEs
- Rs. 300 crore grant to the government of Goa for the diamond jubilee celebrations of the state’s liberation from Portuguese
- Revised Estimate for Expenditure is Rs.34.50 lakh crore as against original Budget estimate expenditure of Rs. 30.42 lakh crore
- Deviation Statement under Sections 4(5) and 7(3) (b) of the FRBM Act tabled necessitated by this year’s unforeseen and unprecedented circumstances
- The Contingency Fund of India is to be augmented from Rs.500 crore to Rs. 30,000 crore through Finance Bill
- On the Commission’s recommendation, Rs. 1,18,452 crore have been provided as Revenue Deficit Grant to 17 states in 2021-22, as against Rs. 74,340 crore to 14 states in 2020-21
Tax proposals
- By increasing rebates burden of taxation on small taxpayers is eased
- Faceless assessment and faceless Appeal introduced
- Relief to senior citizens over 75 years from filing tax returns and having only pension and interest income, tax to be deducted by paying bank
- Time limit for re-opening cases reduced to 3 years
- Serious tax evasion cases to be reopened only upto 10 years with approval of the Principal Chief Commissioner
- Dispute Resolution Committee to be setup for taxpayers
- National faceless Income Tax appellate tribunal centre to be established
- Relaxation to NRIs regarding their foreign retirement accounts
- Limit of turnover for tax audit increased to Rs. 10 crore from Rs. 5 crore for entities carrying out 95% transactions digitally
- Dividend payment to REIT/InvIT exempt from TDS
- Deduction of tax on dividend income at lower treaty rate for Foreign Portfolio Investors
- Infrastructure Debt Funds made eligible to raise funds by issuing Zero Coupon bonds
- Relaxation for conditions relating to prohibition on private funding restriction on commercial activities and direct investment
- Additional deduction of interest upto Rs. 1.5 lakh, for loan taken to buy an affordable house for loans taken till March 2022
- Tax exemption allowed for notified Affordable Rental Housing Projects
- Tax holidays for capital gains from incomes of aircraft leasing companies
- Tax exemptions of aircraft lease rentals paid to foreign lessors
- Tax incentive for relocating foreign funds in the IFSC
- Pre filled in returns – capital gains from listed securities, dividend income, interest from banks etc
- Exemption limit of annual receipt revised from ₹1 crore to ₹5 crore for small charitable trusts running schools and hospitals
- Late deposit of employee’s contribution by the employer not to be allowed as deduction to the employer
- Capital gain exemption for investment in start-ups extended till 31st March 2022
Indirect Taxes
- Nil returns through SMS
- Quarterly return and monthly payment for small taxpayers
- Input tax credit can be availed only when invoice/debit note has been reported by supplier in its GSTR 1 return and such invoice/debit note has been communicated to the recipient
- Option for zero rated supply with payment of IGST would be restricted for the notified tax payers or notified goods/services only
- Refund of export of goods would be linked with remittance of foreign exchange in India
- Respective changes have been made in law to give retrospective effect w.e.f.01 July 2017 for changes
- Promotion of domestic manufacturing and helping India get onto global value chain and export better
- 80 outdated exemptions already eliminated
- Revised, distortion free custom duty structure to be introduced from 1st October 2021
- New custom Duty exemptions to have validity upto 31st march following two years from its issue date
- Duty on some parts of mobiles revised to 2.5% from nil rate
- Custom duty on gold and silver to be rationalized
- Turant Customs initiative, a faceless, paperless and contactless customs measures
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