Budget Highlights 2021: Did the new budget bought us a sigh of relief

As the nation has entered a new year, there is a promise of new dawn. While we haven’t totally left the pandemic behind, the promise of vaccination and upcoming innovations has surely brought some spring in our steps. With that mindset, Finance Minister Nirmala Sitaraman announced Budget 2021 in a unique and paper less fashion. 

So, let’s see if the new budget has brought us some sigh of relief, or it’s another year that mirrors the previous year’s pandemic deceit. 

How Budget 2021 was announced?

Even before the budget was announced, how the document revealing the budget revealed itself is the story of the firsts. Ditching the “British hangover” that encompassed the leather holder, the Finance minister was seen holding a red government cloth folder. As the holder opened, for the first time in India, we witnessed a paperless document – for the budget was about to be declared via a tablet. 

“Six pillars are there on which this year’s financial budget rests” – accentuated the Finance minister.

1. Adding more to the human capital

2. Inclusive development for aspirational India

3. The health and well-being 

4. Physical and financial capital and infrastructure

5. Minimum government and maximum governance. 

6. R&D and innovation

Final point aside, the rest are new pillars that India has been trying to stand upon for the past six years. Now, let’s look into the highlights of the budget for FY 2021

Health and Sanitation

Let’s start of this year’s budget, fiscal year 2021 with the points related to Health and sanitation:

1. PM Atma Nirbhar Swasthya Bharat Yojana: The scheme will be launched this year with focus on promotion of primary, tertiary and secondary healthcare. 

2. Mission Poshan 2.0: Mission to improve the nutritional status of population residing in 112 aspirational districts. 

3. new public health units: 17 new public health units to become operational at the point of entry. 

4. Improvement of existing health unit: Healthcare units of 32 airports, 15 sea ports and land ports will focus on being modernized. 

5. Jal Jeevan mission Urban: A mission aiming at better water supply nationwide. 

Education

In regards to education, the 2021 Budget has brought forward the following highlights:

1. New Sainik Schools: Over 100 new Sainik Schools to be set up soon. 

2. Eklavya Schools: 750 Eklavya schools to be setup to make education accessible in tribal areas. 

Infrastructure

To push forward with revolutionary infrastructural growth, the full budget of 2021 in regards to infrastructure has the following highlights:

1. Phasing out old vehicles: To phase our old vehicles, the Vehicle Scrapping Policy is introduced. As per it, all the personal vehicles will undergo fitness test every 20 years and all the commercial vehicles will undergo fitness test every 15 years. 

2. Road and highway works: As her the FY21 budget, New highway and road works were announced in the states of Tamil Nadu, Assam, Kerala and West Bengal. 

3. National Asset Monetising Pipeline: With this new pipeline, the goal is to watch over the asset monetisation process. 

4. National Railway plan to modernize railway system by 2030

5. 100% electrification of all railways by 2023

6. Metro services in 27 cities. Additionally, new metros are to be allocate for Kochi metro, Chennai metro Phase 2, Bengaluru Metro phase 2A and B. 

7. National Hydrogen Mission: generation of hydrogen from green power sources. 

8. Incentives to double the recycle ability of ports by 2024

9. Gas pipeline project for J&K.

10. 1 Crore beneficiaries added to Pradhan Mantry Ujjwala Yojana. 

Tax 

The government budget 2021 for tax has been especially indifferent. As per the FY 2021 budget, following are the provisions:

1. Rest for the seniors: IT filing requirement removed for citizens above 75 years of age. On the condition that those citizens get pension and earn from deposits. 

2. Reopening window changed: For IT assessment cases, the reopening window has been reduced from 6 years to 3. That said, the window can increase to 10 years for large cases of tax evasion. 

3. Tax holiday: One year tax holiday for affordable housing projects. 

4. Reduced duty for copper: Duty on copper has been reduced to 2.5%. 

5. Custom Duty for gold and silver: Custom duty for gold and silver to be made more rational as per fiscal year 2021 budget. 

6. Duty on Naptha reduced: New duty on Naptha is 2.5 percent.

7. Increased in Duties: For Solar inverters, the duty has been increased from 5 to 20 percent. For solar lanterns, the duty has been increased from 15% to 20%.

8. Duty on all Nylon Products: 5% custom duty on all Nylon Products. 

9. Tunnel boring machines now bear custom duty of 7%. 

10. Custom duty on cotton increased from 0 percent to 10

11. Proposal of introducing agricultural infrastructure and development cess on certain items that include Apples, Urea, Kabuli Chana, sunflower oil, Crude Soyabean, Crude palm oil, and peas.

Economy and Finance

For fiscal year 2021 budget, the economy and finance domain has the following highlights: 

1. Fiscal deficit right now is 9.5 percent, hoping to reduce it to 6.8 percent by in end of this fiscal year. 

2. Proposal for permitting states to raise borrowings up to 4 percent of GSDP.

3. Introduction of Unified Securities market code, which will bring the provisions of SEBI act, depositories act and two other laws under one umbrella. 

4. Proposal to increase foreign direct investment from 49 percent to 74%.

5. Consolidation of an Asset reconstruction company to take over stressed loans. 

6. Proposal to decriminalize or ease the LLP  - Limited Liability partnership Act – 2008

7. Government is going to pull out from two PSU banks and one general insurance firm this year. 

8. IPO of LIC to make a debut this year

9. Air India, BPCL and IDBI bank, all will be sold as per the strategic sale method.

Agriculture

for the Agricultural sector, following are the provisions of Budget 2021:

1. Agricultural Infrastructure Fund: APMC will now be augmenting their infrastructure via the Agricultural infrastructure Fund. 

2. E NAM marketplace: Integration of 1,000 more Mandis will take place via the E NAM market place. 

3. Development of Fishing Hubs: Fishing Hubs to be developed in Chennai, Kochi and Paradip. 

4. Seaweed Park: Tamil Nadu to receive a Seaweed Park. 

Employment Sector

Among all the sectors to care for, if one that deserves the most attention, is this:

1. Information portal: A portal to be launched to main information of gigs taken by construction workers and gig workers. 

2. Social security: It’s now possible for gig workers and platform workers to get benefits of social security. 

3. Reduction of Margin Capital required for loans: Margin capital required for loans availed by SCs, STs and women reduced from 25% to 15%. 

Conclusion

This new Budget for 2021, like every year has some positive and some negative points. While it’s admirable that India is pushing it’s “made in India” narrative to fruition, it’s contradictory because of the additional Cess put on general stuff. The increased custom duty on renewable energy instruments are worrisome as well. What do you think of this Budget? Comment below and let us know.

Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.