FM Sitharaman reveals the first paperless Union Budget on Monday, first of February.
Finance Minister Nirmala Sitharaman revealed the 2021-22 Union Budget on Monday. Earlier, she had promised an unprecedented budget. Sitharaman presented the first paperless budget. She announced measures aimed to give impetus to the Covid-hit economy. This also required steering the $2.7 trillion Indian economies out of a major recession.
PM Modi has praised the budget, mentioning that it shows India's confidence.
Summarizing some points of the 2021-22 Union Budget:
The economy is projected to contract 7.7% in the current fiscal year. But, a growth of 11% is speculated in the coming year after the vaccination drive and rebound in demand and investments.
The Budget allocation (for the capital component ) is at an increase of 20%. The fiscal deficit during February 2020 at 3.5% has increased to 9.5% of the GDP. FM says "We have spent, we have spent, we have spent".
Development Financial Institution is being brought in to fund infrastructure requirements. DFI will be used to raise about Rs 5 lakh crore in the next 3-5 years. This is aimed at cleaning up one of the world's worst pile of bad loans.
The customs duty has been reduced. A disproportionate amount of Agri infra cess has been levied on certain products. But, according to the FM, the end consumer will not face any additional burden.
The Government is open to dialogue with the farmers on farm laws. Sadly, no major announcements were made in this area. No importance was given to boost the rural economy. Budget estimate for expenditure on rural jobs scheme was 730 billion rupees. Such low focus comes at a time when the nation expected satiation for the farmers. Current year's expenditure amount decreases, compared to the 2021 fiscal estimate of 1.1 trillion.
The pandemic prompted FM to boost healthcare spending by 137% this year. This includes the extended shares of hospital operators. Such as Apollo Hospitals Enterprise Ltd., Max Healthcare Institute Ltd., and so on.
Real estate developers are to benefit from plans for a new development finance institution. This will meet the funding requirements for infrastructure projects.
Additional 11,000 km of highways and metros have been announced. This will take place along with rapid rail transport projects for 27 cities. The long-awaited vehicle scrappage policy has been released. Aimed at boosting stocks of companies catering to the added demand for steel and aluminium.
The textile sector has a major boost with the said establishment of 7 mega textile parks to be launched in 3 years.
The huge $164 billion burrowing plan for the new fiscal year shocks the nation. The government also plans to raise 800 billion rupees by this fiscal year. This was along with the projection of a record 13.1 trillion rupees of debt sales.
FM has raised tariffs on solar, mobile-phone equipment and auto parts among others. Declared to boost local manufacturing and the government's focus on self-reliance. However, this causes a serious blow to the exporters.
Information Technology (IT) firms hardly received any attention, despite being India's biggest services, contributors.
For the Railways Budget, FM announced that Indian railways will have a National Rail Plan for up to 2030. Airports will be privatized in tier 2 and 3 towns and cities. 100 more districts will be added in 3 years to the city gas distribution network. A gas pipeline project will be taken up in Jammu and Kashmir.
Jal Jeevan Mission Urban will be launched with Rs. 2.87 lakh crore over 5 years. It is aimed at 4378 urban local bodies with Rs. 2.86 crore household tap connections. Liquid waste management in 500 AMRUT cities will also be done.
The government is now giving incentives to one-person companies. The NCLT system will be strengthened. e-Courts will be in use. Alternate mechanisms of debt resolution will be set up.