The Indian economy which was showing highly promising signs pre-pandemic was compelled to take drastic measures to cope with the financial impacts of the COVID19 global pandemic. The budget presented by the finance minister is a budget which has come at a crossroads moment for our economy.

As highlighted explicitly by our FM, the preparation of this Budget was undertaken in circumstances like never before, in view of calamities that have affected a country or a region within a country. But what we have endured with COVID-19 to 2020 is unique in every sense. 

Within 48 hrs of lockdown, the PM announced Pradhan Mantri Garib Kalyan Yojana valued at ₹2.76 lakh crore. Free food grain to 800 million people, free cooking gas for 80 million families was provided.

Today,  India has two vaccines available; is safeguarding not only her own citizens but also over 100 more countries. She also heartily thanked the country’s scientists.

Some highlights of this historic budget

Taxation:

•No tax returns for Senior Citizens, age 75 years and above who have a pension and interest income

•Income Tax returns will have prefilled data from capital gains etc. To ease compliance for taxpayers, details of salary income, tax payment and TDS are prefilled currently

•Faceless Income tax Appellate Tribunals National faceless ITAT centre to be set up

•Reduce time limit for reopening of tax assessments to 3 years. Reduction in Time for Income Tax Proceedings – Presently an assessment can be opened in 6 years, and in serious tax fraud cases for up to 10 years. FM proposes to revise this limit for reopening of assessments to 3 years from the present 6 years

•Tax Audit threshold of turnover further increased for digital transactions to 10 crores

•Dispute Resolution Panel for small taxpayers.

•Advance tax on the dividend to accrue only after it is declared

Housing:

•Affordable housing is a priority area for which ₹1.5 lakh for loans to purchase an affordable house is now extended by one more year

National Highway infrastructure:

•11,000 kms of National Highway to be Completed

•Over 13,000 km length of roads at a cost of Rs 3.3 lakh cr has already been awarded under ₹5.35 lakh cr Bharatmala project of which 3,800 kms have been constructed.

 Divestment:

•Divestment target for FY22 at ₹1.75 lakh cr.

•Asking Niti Aayog to work on the next list of PSU companies that could be taken up for divestment. Other than IDBI Bank, two other PSBs and one general insurance company to be divested in FY22

Investor friendly measures:

•Introduction of Investor Charter as a right of all investors across financial instruments.

•Four Acts converged into Securities Market Code, Investor Charter Introduced to Protect Investors, Insurance Act Amended to introduce FDI and AMC to be set up to take over stressed debts of Banks

•Propose to amend the Insurance Act, propose to hike FDI limit to 74 percent from 49 percent. Also to allow foreign ownership & control with safeguards

Revamp of OPCs, boost to startups, small companies

•Decriminalisation under LLP Act Small Company definition changed, One Person Company revamped will be Big Boost to Startups

•NRIs to be allowed to set up One Person Companies

•Decriminalisation under LLP Act Small Company definition changed, One Person Company revamped will be Big Boost to Startups

•Proposes to change the definition of a small company under the Companies Act 2013 by increasing their threshold for paid-up capital, from not exceeding ₹50 lakhs, to not exceeding ₹2 crores  and Turnover from not exceeding ₹2 crores to not exceeding ₹20 crores

•Provided ₹15,700 crores to MSME sector. MSME allocation to be doubled. Government to set aside ₹15,700 crores in FY22. The government also proposes to reduce the margin money requirement from 25% to 15% for startups.

•Big boost for startups. Incorporation of one-person companies to incentivize innovation in startups. Reducing the residency limit for an Indian citizen to set up 1 person company from 182 to 120 days.

Relief measures:

•The total estimate of all relief measures announced by govt & RBI so far is ₹27.1 lakh cr (13% of GDP) in COVID19

Digitisation of the upcoming census:

•Forthcoming census will be a digital census, allocating ₹3768 crores for the exercise. This is definitely a big stride towards ‘Digital India’.

Covid 19 relief packages since the beginning of lockdown

•Through the past year, the Finance Minister announced a ₹30-lakh-crore plan, in ‘mini-budgets’ to beat Covid.

Budget and Indian farmers:

•Aim to double farmers income.

•A portion of the agricultural fund will be allocated to APMCs for furthering their infrastructure.

•1.54 crore farmers benefited from MSP in paddy

•The MSP regime has undergone a change to assure price that is at least 1.5 times the cost of production across all commodities.

•In case of wheat, the amount paid to farmers in 2019-2020 was ₹62,802 crore and in 2020-2021 it was further increased to ₹75,060 crore

•Government sets agriculture credit target of Rs 16.5 lakh crore for FY22.

•Micro irrigation corpus doubled to Rs 10,000 cr. Agriculture infra fund will be made available to APMCs

•1,000 more mandis will be integrated with the electronic national market

•Green scheme to be expanded to 22 perishable vegetable products

Nationwide ration plan:

One-nation, the one-ration plan under implementation by 32 states and union territories

PM Aatmanirbhar Swastha Bharat:

•New scheme called PM Aatmanirbhar Swastha Bharat to be launched with an outlay of  ₹64,180cr over 6 years.

•Main interventions under PM Aatmanirbhar Swasth BharatYojana include Support for Health and Wellness Centres, Setting up Integrated Public Health labs in all districts, Critical care hospital blocks, Strengthening of NCDC

Education:

•100 new Sainik schools will be set up in partnership with NGOs. There are other ‘umbrella’ structures to be created for higher education.

•More than 15,000 schools in the country will be qualitatively strengthened to include all components of the National Education Policy:

Green India:

•Announcing a voluntary scrapping policy to phase out polluting vehicles. Vehicles to undergo fitness tests after 20 years for personal vehicles and 15 years for CVs.

•To tackle the problem of air pollution, propose, ₹2200 crore for 42 urban centres; also announcing a vehicle scrapping policy towards reducing vehicular pollution.

Health and Covid Vaccination:

•17,000 rural and 11,000 urban health and wellness centres to be set up.

•India has two COVID-19 vaccines available and we expect two more vaccines soon

•FY22 outlay (budget estimate) for health & well-being up 138%, is ₹2,23,846 cr.

Textiles:

•A scheme of Mega Investments Textile Park will be launched in addition to PLI Scheme which will create world class infrastructure with plug and play facilities to enable global champions in exports.

Relief to states and their expenditure:

₹2 lakh crore will be provided to states and autonomous bodies to nudge their expenditure.

•States to get 41 pc share of taxes as per 15th Finance Commission

Railways:

•FY 22 allocation for Railways at ₹1,10,055cr

•Railway to monetise dedicated freight corridors

•PM Swastha Bharat Yojana with an outlay of over ₹64,000 crores.

Ujjwala Scheme Update:

•After achieving the target of 8 crore connections, Ujjwala Scheme will now Cover an additional 1 Crore Beneficiaries.

•100 more districts will be added in the next three years to the city gas distribution network.

Public road transport:

•New scheme at a cost of ₹18,000 crores for augmentation of public bus transport services.

•Will facilitate deployment of innovative PPP models enabling private players to finance, acquire, operate and maintain over 20,000 buses

Youth and the budget:

•Govt proposes to amend apprenticeship law to enhance opportunities for youth.

Commitment to bring down Fiscal Deficit:

•FM says government committed to bringing down fiscal deficit below 4.5 pc of GDP by 2025-26

This budget is for sure a comprehensive budget but more importantly, one which will surely get our economy back on track; towards recovery and rejuvenation. With this budget,  the government has been bold, realistic and overall inclusive for all sectors in its targets and allocations. The 2021-22 FY is going to be crucial for India in every conceivable sense. It is first of a few ‘make or break’ years that are to follow (due to the global financial implications of the COVID19 pandemic) but with this budget, we can be optimistic for a sustained road to recovery.

M. Asnikumar Singh, State Spokesperson of BJP Manipur Pradesh and Chairman MDS welcome the today’s union budget presentation by Nirmala Sitharaman, Union Finance Minister in Parliament. He hails this budget and expressed his optimism.