Finance minister Nirmala Sithraman while announcing Budget 2021 in Parliament said that it was prepared in circumstances -like never before- and that the government was fully prepared to back and facilitate a reset of the economy.
According to her, the total impact of Atmanirbhar Bharat and Covid relief measures was Rs 27.1 lakh crore, which amounts to 13 per cent of the GDP, reported ndtv.com.
"Faith is the bird that feels the light and sings when the dawn is still dark" she quoted Rabindranath Tagore, adding that this moment in history is the dawn of a new era, where India is well-poised to be the land of promise and hope".
The Atmanirbhar Bharat schemes announced in 2020 were like five mini budgets themselves, said the Finance Minister.
Highlights of the Union Budget:
- Customs duty on cotton, raw silk raised
- Customs duty on certain auto parts, solar equipment raised
- Exemption duty on steel scrap up to March 2022; customs duty on naphtha cut to 2.5 per cent
- Govt proposes to review over 400 old exemptions in indirect taxes; to begin extensive consultation from October 2021
- Tax holiday for startups and exemption on capital gains on investment in startups extended by 1 yr
- Record GST collections in last few months; govt to take every possible measure to reduce anomalies
- Tax exemption for aircraft leasing cost and notified affordable housing for migrant workers
- Rs 1.5 lakh deduction on payment of interest for affordable housing extended by 1 yr
- Govt proposes to relax norms to attract more foreign investment in infrastructure sector
- Government committed to bringing down fiscal deficit below 4.5 pc of GDP by 2025-26
- Timeline for reopening of tax cases reduced to 3 yrs from 6 yrs
- Serious tax offences of concealment of income of over Rs 50 lakh can be reopened after 10 years
- Those above 75 years exempted from filing income tax returns
- One nation, one ration card plan under implementation in 32 states, 1 union territory
- 2020-21 fiscal deficit pegged at 9.5 per cent of GDP
- Agri Infra Fund increased to Rs 40,000 cr, Micro Irrigation Corpus doubled to Rs 10,000 cr
- Rs 1,500 cr earmarked for scheme to incentivise digital payments
- Rs 3,768 cr for Digital Census in India
- Gas pipeline project in J&K
- Central University in Leh soon
- Social security net extended for gig and platform workers
- Over Rs 75,000 cr for wheat paid to farmers in FY21
- FDI in insurance increased to 74 per cent from 49 per cent
- Free cooking gas LPG scheme Ujjwala to be extended to 1 cr more beneficiaries
- IPO for Life Insurance Corporation (LIC) this year
- Rs 1,10,055 cr allocated to Railways
- 74% FDI, up from 49% in Insurance sector with safeguards
- Rs 20,000 cr for recapitalisation of Govt Banks
- Govt to provide Rs 35,000 cr for Covid-19 vaccination in 2021-22; committed to providing more funds, says FM
- Jal Jeevan mission with outlay of Rs 2.87 lakh cr for 4,378 urban local bodies
- Scheme for mega investment textiles park in addition to PLI scheme to be launched
- National monetisation pipeline for potential brownfield infrastructure assets will be launched
- Swachh Bharat 2.0 will be implemented with outlay of Rs 1,41,678 cr over 5 years
- Budget proposals rest on 6 pillars, including health and well-being; physical and financial capital
- Government fully prepared to support economy for sustainable growth
- India has 2 COVID-19 vaccines; two more to be launched
- Govt announced Aatmanirbhar packages totalling Rs 27.1 lakh crore to deal with COVID pandemic
Cabinet nod
The Union Cabinet headed by Prime Minister Narendra Modi on Monday approved the Budget 2021-22, sources said. The Budget will be presented by Finance Minister Nirmala Sitharaman in a short while from now in the Lok Sabha.
In a first, the Budget 2021-22 would be in a paperless format.
Markets
Stock investors are not expecting any market-specific measures in the budget though sectoral reliefs across the economy may perk up specific scrips, the sombre mood reinforced by a more-than-2500 crash in the Sensex last week.
Disappointing
The budgets have largely been disappointing to markets during the tenure of the NDA since 2014: they have fallen on five occasions the day of its presentation. Exactly a year ago, the Sensex had crashed 988 points — its steepest fall on a budget day in six years.
Banking
Brokerages, however, do have sector-specific expectations. For the banking sector, it includes a bad bank, a bank investment company that will take over the government’s stake in the 12 public sector banks. Some even expect a bold announcement in the form of privatisation of some of these banks apart from continuing their consolidation so as to bring down the number of state-owned lenders to four.
Housing loan
Many brokerages expect a higher deduction on housing loans and reduction in long term capital gains rate on real estate assets to 10 per cent with their holding period also reduced to 12 months from 24 months.
Long-term capital gains
Some optimists are looking forward to some good news on the long-term capital gains (LTCG) on listed shares. “Among the key expectations, the investors will look forward to the abolition of long-term capital gains tax or redefining long term to two years and reducing the taxation to nil, while further allow indexation benefits to equity mutual funds and some relief on dividend distribution tax in hands of investors,’’ says Nitin Aggarwal, CEO, Religare Broking.