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Union Budget 2021: Live Updates of Budget Speech by Finance Minister Nirmala Sitaraman

Finance Minister Nirmala Sitharaman in Parliament: Preparation of this Budget was undertaken under circumstances like never before. We couldn’t have imagined the global slowdown during the last Budget. We announced the ‘Aatmanirbhar’ Package in May 2020 to sustain recovery. Atmanirbhar Bharat and Pradhan Mantri Yojana were like 3-4 mini Budgets in themselves. Total COVID-19 support measures amount to 13 percent of GDP and total COVID-19 support measures by government and RBI amounts to Rs 27.1 lakh crore. The ‘Aatmanirbhar’ Packages accelerated India’s rate of reform.

 India has two COVID-19 vaccines available and we expect two more vaccines soon. India currently also has one of the lowest death rate and active cases in the world. India’s economic contraction is due to a global pandemic.The government is fully prepared to support and facilitate economic reset. Three times has a Budget followed contraction in the economy. We will lay out a vision for Aatmanirbhar Bharat in Part-A of the Budget speech. This is not a new India .. ancient india was self reliant as well. ‘Aatmanirbharta’ consists of doubling farm income and strong infrastructure. It consists of good governance and women empowerment. Proposals for the FY22 Budget rests on 6 pillars.

Three times has a Budget followed contraction in the economy. We will lay out a vision for Aatmanirbhar Bharat in Part-A of the Budget speech. This is not a new India .. ancient india was self reliant as well. ‘Aatmanirbharta’ consists of doubling farm income and strong infrastructure. It consists of good governance and women empowerment. Proposals for the FY22 Budget rests on 6 pillars.

PM Aatmanirbhar Swastha Bharat to be launched

First of six pillars Aatmanirbhar Yojana in addition to the National Health Mission: We introduce the Aatmanirbhar Health Yojana with an outlay of Rs 64,180 crore over six years. This will strengthen the National Centre for Disease Control. Besides this, the government will also set up 15 Health Emergency Centres

Will implement Jal Jeevan Mission with outlay of Rs 2.87 lakh crore to cover houses and to be implemented over five years. Budget 2021 will also launch Mission Poshan 2.0. Besides this, launch of urban ‘Swacch Bharat Mission’ 2.0 with an outlay of Rs 1.42 lakh crore has been made.

We announce voluntary vehicle scrapping policy. Vehicles to undergo fitness test – which is 20 years for passenger vehicles and 15 years for commercial vehicles. Further details of the scrappage policy to be announced shortly.

Nirmala Sitharaman has said that a professionally managed development financial institution (DFI) will be introduced.

The government has set an ambitious target of building infrastructure in the country. But funding these infrastructure projects would have posed a steep challenge because of the revenue constraints and the stress on the loan books of banks. Moneycontrol had earlier reported earlier that FM Sitharaman is likely to announce a dedicated development financial institution to facilitate financing greenfield infrastructure projects.

Rs 35,000 crore to be allocated for further funds for COVID-19 vaccines. we will provide more for COVID-19 vaccines if required.

Government has committed Rs 1.97 lakh crore for PLI schemes covering 13 sectors. Further 7 textile parks will be launched over three years.

National Infrastructure Pipeline has been expanded to 7,400 projects. Futher, projects worth Rs 1.1 lakh crore have been completed under the National Infra Pipeline. We will also introduce bill to set up DFI providing Rs 20,000 crore to launch the National Asset Monetisation Pipeline to fund new infra projects.

Will introduce a bill to set-up a development finance institution (DFI), capitalised with Rs 20,000 crore. Rs 5 lakh crore will be lent by DFI in three years time. An asset monetisation dashboard will be created to provide clarity to investors. Further the Railways will monetise dedicated freight corridors. For 2021-22; capital expenditure seen at Rs 5.54 lakh crore which is up by 34.5 percent year-on-year (YoY).

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NHAI has sponsored one InVit to attract investors. Thus 5 operational roads with Rs 5,000 crore value being transferred to NHAI InVit. NHAI operational roll roads are to be monetised. Meanwhile, Ralways will monetise dedicated freight corrdior after commissioning. The next lot of airports will also be monetised for operations and management. AAI airports in tier-2,3 cities and other railway assets are to be monetised.

More than 13,000 km of roads awarded under Bharat Mala project. Around 3,800 km have been constructed in Bharatmala so far and 8,500 km to be awarded by March 2022. Will complete additional 11,000 km of NH corridor by March 2022. More economic corridors are being planned – 3,500 km of NH works are ongoing in Tamil Nadu.

FY22 Capex is targetted at Rs 5.54 lakh crore v/s FY21’s Rs 4.39 lakh crore.
Power transmission assets of Rs 7,000 crore is to be transferred to Power Grid InvIT. The Centre will also provide Rs 2 lakh crore to states and autonomous bodies for Capex. We will nudge states for more capital expenditure.

Government will allot Rs 1.03 lakh crore for National Highway Projects in Tamil Nadu; Rs 65,000 core for National Highway Projects in Kerala; Rs 25,000 crore for National Highway Projects in West Bengal. We will also allot additional Rs 34,000 crore for National Highway Projects in Assam. We will award 8,500 km of for National Highway Projects by March 2022. Further, 1,000-km of the National Highway Corridor is to be completed. 
The Eastern Freight Corridor is to be taken up this year via PPP mode. Further, three future dedicated freight corridors — East Coast, East-west, North-south are in works. These will have automatic system on high density rail routes to avoid collisions. Complete, 100% electrification of broad-gauge rail routes will be done by December 2023.

Proposed to update definition of small companies to be raised up to rs crore from Rs 50 lakh net worth.

The government has raised the limit for foreign direct investment (FDI) insurance sector to 74 percent from 49 percent – with safeguards. We propose to amend the Insurance Act, 1938 and will launch a new investor charter for investor protection. Will launch a securities market code which will include the SEBI Act, the government Securities Act and the Depositories Act 
Asset reconstruction and management company to be set up for stressed assets. In FY22, PSU bank recapitalisation plan is of Rs 20,000 crore. We will allow sale of distressed assets to Alternate Investment Funds (AIFs). The NCLT framework will also be strengthened to implement e-courts.
All divestments announced so far, are to be completed in FY22.

We propose to divest two PSU banks and one general insurance company in FY22. Further, divestments of BPCL, CONCOR, Pawan Hans, and Air India will be completed in FY22.  FY22 Divestment target is at Rs 1.75 lakh crore.
We will create new list of companies for divestment. The government will form a special purpose vehicle (SPV) for monetising land owned by state-owned PSUs and will set up separate administrative structure for co-operatives.

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An independent gas transport system will be set up and 100 more districts will be added under the City Gas Expansion.
The government is also looking to double ship recycling capacity by 2024. Seven port projects worth more than Rs 20,000 crore will be undertaken in FY22 via PPP. A scheme to assit discoms will be launched with an outlay of over Rs 3 lakh crore. The Ujjwala Scheme will cover an additioanl 1 crore beneficiaries.

Amount paid to wheat farmers in FY20 is Rs 62,802 crore v/s Rs 33,874 crore in FY14. The government is offering MSP of at least 1.5 times of production for all commodities. 
We paid wheat farmers rs 75,100 crore wheat MSP in FY21; paid pulse farmers Rs 10,530 crore in FY21, v/s  Rs 8,285 crore in FY20 and Rs 236 crore in FY14; while Cotton farmers received rs 25,974 crore in FY20, compared to Rs 90 crore in FY14.
The FY22 Agri-Credit target is at Rs 16.5 lakh crore. Further, the Rural Infra Fund has been increased to Rs 40,000 crore and the Micro Irrigation Fund has been increased to Rs 10,000 crore. The Agri Infra Fund will be available to APMCs.
The government will also set up a seaweed park in Tamil Nadu and will develop 5 major fishing hubs.

The ‘1 Nation 1 Ration Card’ plan is under implementation by 32 States & UTs. The Centre will lauch a portal to collect data on migrant workers. Further, social security benefits will be extended to platform and gig workers. Minimum wages will apply to all categories of workers. 

FY21 fiscal deficit pegged at 9.5% of GDP. Further, the FY22 fiscal deficit has bee pegged at 6.8% of GDP.
Gross market borrowing target is at Rs 12 lakh crore for FY22. The revised expenditure target is at Rs 34.50 lakh crore for FY21. We will approach the market for additional Rs 80,000 crore to fund FY21 fiscal deficit. We hope to get back on the fiscal consolidatiopn path by FY26.

We see fiscal deficit for FY22 at 6.8 percent and this coming down to 5.85 percent by 2030. Net borrowing for states has been capped at 4 percent. We will adhere to the 15th Finance Commission recommendations on devolution. 

Revenue grant of Rs 1.18 lakh crore has been given to 17 states in FY22.

The Centre will discontinue the National Small Savings Fund loans to the Food Corporation of India and will introduce amendments to the FRBM Act on revised fiscal path. 
>> Rs 3,758 crore has been allocated for the upcoming Digital Census. Rs 1,000 crore has been allotted for welfare of tea workers in Assam and West Bengal. 
>> A Deep Ocean Mission will be launched with outlay of Rs 4,000 crore over five years. 
>> Four Indian astronauts are being trained in Russia for Mission Gaganyaan.

Union Budget 2021 LIVE Updates | Finance Minister Nirmala Sitharaman – Direct Taxes

No Income tax (I-T) filing for senior citizens above 75 years of age having only pension.
Further, the timeline for re-opening of tax returns has been reduced to three years from six years. To set up faceless dispute resolution committee for small taxpayers. 

>> Proposed to make I-T Appellate Tribunal Faceless
>> Tax audit threshold raised to Rs 10 crore for digital transactions
>> Dividend payment by REITs and InvITs not subject to TDS
>> Advance tax liability to arise only after payment of dividends

>> Tax exemption for notified affordable housing for migrants workers and the deduction on payment of interest for affordable housing has been extended by 1 year.
>> Infrastructure debt funds may issue tax efficient 0 coupon bonds
>> We proposed tax exemption for Aircraft Leasing Companies
>> I-T return forms to now be pre-filled with Capital Gains and Bank Interest details

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>> No deduction to employers for late deposit of employee contribution to Provident Fund
>> To extend eligibility for startups to claim tax holiday by 1 year
>> Will take steps to further smoothen GST and reduce inverted duty structures in GST
>> Custom Duty Policy should promote domestic manufacturing – for which we are cutting duty on copper scrap to 2.5 percent; looking to bring bylon at par with polyester with respect to taxation; and duty on Naptha reduced to 2.5 percent. We are also rationalising customs duties on Gold and Silver

• Vivad Se Viswas Scheme Last Date of filing extended to 28th February, 2021.
• Citizens of age 75 years and above who have only Pension and Interest income – Need not file Income Tax Returns
• Re-opening of Assessment to reduced to 3 years from 6 years. Only where evidence of concealment of Income of Rs. 50 lakhs or more – re-opening can be made upto 10 years & only with approval of Pr. CCIT.
• Reducing Litigation for small tax payers – Constitution of Faceless Dispute Resolution Panel for people with Total Income upto Rs.50 lakh and disputed income of Rs.10 lakh
• Income Tax Appellate Tribunal to become Faceless – Only electronic communication will be done
• Relaxation to NRIs – Rules to remove hardship of Double Taxation
• Tax Audit Limit to be increased to Rs.10 crores from Rs.5 crores for those having less than 5% cash transactions
• Dividend Tax- Dividend will be exempt from TDS. Advance tax liability on dividend income will arise only after declaration or payment of dividend.

• For Foreign Investors – lower treaty rate benefit will be given.
• Affordable Housing – Additional Interest deduction (Sec 80EEA) of Rs.1.5 lakhs to be extended for loans taken till 31st March, 2022.
• Affordable Housing Projects – Tax Holiday extended till 31st March, 2022.
• Tax Holiday for Capital Gains for Aircraft Leasing Companies and Tax Exemption to Lease paid to Foreign Persons
• Pre-Filling of Returns – Details of Capital Gains, Dividend Income and Interest income will be pre-filled in the returns
• Relief to Trusts – Charitable trusts running Hospitals and Educational Institutions relief increased from Rs.1 crore to Rs.5 crore.
• Employee contribution not paid by employer will not be allowed as a deduction.
• Tax holiday for Start-Ups extended to 31st March, 2022. Capital Gains exemption on investment in start ups also extended to 31s March, 2022.

Union Budget 2021 LIVE Updates | Finance Minister Nirmala Sitharaman – MCA, Companies Act, LLP Act
• Easing Compliance requirements of Small Companies – Threshold increased to Share Capital upto Rs.2 crore and Turnover upto Rs.20 crore will be Small Companies
• Allow One Person Companies (OPC) to grow without any restriction in Share Capital or Turnover. NRIs will be allowed to set-up OPCs. Presence in India of 120 days in a year enough to start an OPC.
• Launching MCA Version 3.0 – E-Scrutiny, E-Adjudication and Compliance management to be simplified.
• Decriminalisation of LLP Act, 2008
• Tribunals to be rationalised

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