Table of Contents
The Build-up
- The continued protest by farmer unions on the three agriculture-related laws cleared by Parliament in the last Monsoon Session, had put the pressure on the government to deliver.
- The Union General Budget provided the best opportunity.
- On 29th January, 2021, Prime Minister Narendra Modi described the current Budget Session as an opportunity to fulfil the dreams of freedom fighters.
- Nirmala Sitharaman – The first Full Time female Finance Minster presented the Budget.
- The first budget of the decade – was also a digital budget.
- The speech lasted for 112 min.
- The last General Budget 2020-21 was presented on 1st February, 2020.
Recap of the Indian Economy in COVID times
- While the global economy was slowing down, COVID-19 pushed it to further uncertainty.
- The risk of not having a lockdown was too high.
- The total estimate of all relief measures announced by govt & RBI so far is ₹27.1 lakh crores.
- 13% of GDP.
- India has two COVID-19 vaccines available.
- Two more vaccines will be rolled out soon.
To tackle the COVID-19 induced economic difficulties, the Government announced a ₹30-lakh-crore plan, through the following ‘ mini-budgets’ :
- AtmaNirbhar Bharat programmes
- Performance-linked incentives
- Boost for domestic manufacturing
- Improved credit access for enterprises
- Moratorium on interest payments
- Thrust on affordable housing
- Booster shots for MNREGA
- Within 48 hours of India’s lockdown declaration, the PM announced Pradhan Mantri Gareeb Kalyan Yojna.
- ₹2.76 lakh crores.
Theme of the Budget
- AtmaNirbhar Bharat and
- the sankalp of Nation-first
- is planned to be strengthened through
- 6 pillars in FY22:
- Health and Wellbeing
- Physical & Financial Capital, and Infrastructure
- Inclusive Development for Aspirational India
- Reinvigorating Human Capital
- Innovation and R&D
- Minimum Government and Maximum Governance
Healthcare
₹ 64,180 crores to be spent on a centrally sponsored scheme ‘AtmaNirbhar Swastha Bharat Yojana’ over the next six years:
- Critical care hospital blocks
- Strengthening of National Centre for Disease Control
- Setting up of 17,000 rural and 11,000 urban health and wellness centres
- Setting up of Integrated Public Health Labs in each district
- ₹ 35,000 crore for COVID-19 Vaccine in the financial year 2021-22.
- The government will provide more funds, if required.
- The pneumococcal vaccine is limited to only 5 states at present.
- Now it will be rolled out across the country.
- Will avert more than 50,000 child deaths annually.
- National Commission for Allied Healthcare Professionals Bill introduced.
- Will ensure transparent and efficient regulation of 56 allied healthcare professions.
- National Nursing and Midwifery Commission Bill introduced
- Supplementary Nutrition Programme & POSHAN Abhiyaan to be merged.
- Mission POSHAN 2.0 to be launched.
- Will strengthen nutritional content, delivery & outcome.
- Intensified strategy for improving nutritional outcomes in aspirational districts.
- Outlay for health, therefore, increased to ₹2,23,846 crores.
- Increase of 137% relative to previous year’s budget.
Jal Jeevan Mission Urban
- Spending of ₹2.87 lakh crores.
- To achieve better health and quality of life, the government aims to provide universal water supply to 4378 urban bodies.
- Liquid Waste management in 500 AMRUT cities.
Urban Clean India Mission
- Urban Swachh Bharat 2.0 Mission to be launched, which will cost ₹1.41 lakh crore over 5 years.
- Fecal sludge management.
- Waste water treatment.
- Management of waste from urban construction.
- To tackle air pollution, the FM announced ₹2217 crores.
- Will cover 42 urban centres.
Vehicles to undergo fitness test in automated fitness centres:
- After 20 years for personal vehicles, and
- After 15 years for commercial vehicles.
- Voluntary vehicle scrapping policy to phase out old and unfit
Industry
- ₹ 1.97 lakh crores over 5 years starting this FY, for Production Linked Incentive Schemes.
- This will create global champions in manufacturing.
- Essential for an AatmaNirbhar Bharat.
- Will nurture and create jobs for youth.
- Scheme of Mega Investment Textile Parks to be launched.
- To create world class infra in textile sector, with plug-and-play facilities.
- 7 textile parks to be set up over 3 years.
- To create global export champions.
Infrastructure
To give further thrust to National Infrastructure Pipeline, three concrete actions to be taken:
- Creating institutional structures.
- Monetizing assets.
- Increasing share of capital expenditure in central and state budgets.
- Professionally managed Development Financial Institution to be set up.
- Will provide, enable & catalyze infra financing.
- ₹ 20,000 crore to capitalize this institution.
- Aim is to have lending portfolio of at least ₹ 5 lakh crore in 3
- National Monetization Pipeline of potential brownfield infrastructure assets to be launched.
- Will help in monetizing operating public infra assets.
- Asset Monetization Dashboard to track progress and provide visibility to investors.
- Five operational roads being transferred to NHAI.
- ₹7,000 crore assets to be transferred to PGCIL.
- Railways to monetize dedicated freight corridor assets for O&M, after commissioning.
- Next lot of airports to be monetized for operation & management concessions.
- Sharp increase of 34.5% in capital expenditure.
- Resulted in allocation of ₹ 5.54 lakh crore.
- Shows government’s effort to spend more on capital expenditure, despite resource crunch.
- ₹ 40,000 crore for programmes, projects and departments which show good progress in capital expenditure, if they are in need of further funds .
- More than ₹ 2 lakh crore for states and autonomous bodies for capex.
Roads and Highways
- By March 2022, another 8,500 km of road projects to be awarded.
- 11,000 km of NH corridors to be completed, under Bharat Mala Pariyojna project.
- ₹ 1,18,101 crore for the Ministry of Road Transport and Highways.
- Of this, ₹ 1.08 lakh crore is for capital – the highest ever provided.
- Western Dedicated Freight Corridor and Eastern Dedicated Freight Corridor to be commissioned by June 2022.
- Various additional initiatives too being proposed.
- New scheme for augmentation of public bus transport
- Will cost ₹18,000 crore.
- Will facilitate deployment of innovative PPP models enabling private players to finance, acquire, operate and maintain over 20,000 buses.
Railways
- 100% electrification of rail broad gauge routes to be completed by December 2023.
- High density rail networks and highly utilized rail routes to be provided with indigenously developed automatic train protection system.
- This will eliminate train collision due to human error.
- Record sum of ₹ 1,10,055 crore to be provided for Indian Railways.
- Of this, ₹ 1,07,100 is for capital expenditure only.
MetroLite and Metro New Technologies to be deployed to provide metro rail systems in:
- tier 2 cities and
- peripheral areas of tier 1 cities.
**Costs less, but provides same experience, convenience and safety.
Ports
- Seven port projects worth more than ₹ 2,000 crore to be offered by major ports in PPP Mode
- Will move to a model where private partner will manage operations of ports.
- Scheme for promoting flagging of merchant ships in India to be launched.
- Subsidy support to Indian shipping companies will be provided by Ministries and CPSEs – ₹ 1,624 crore over 5 years for this
Energy
- Framework to be put in place, to provide consumers alternatives to choose from, from among multiple power distribution companies.
- Revamped, reforms-based, result-linked Power Distribution Sector Scheme to be launched, with outlay of ₹ 3,05,984 crore over 5 years.
- Will provide assistance to distribution companies for infrastructure creation.
- Comprehensive National Hydrogen Energy Mission to be launched.
- Will help generate hydrogen from green power sources.
- Ujjwala scheme has benefited 8 crore households, so far.
- It will be extended to cover 1 crore more beneficiaries.
- 100 more districts to be added in next 3 years, to City Gas Distribution Network.
- Independent Gas Transport System Operator to be set up.
- This will allow facilitation and coordination of booking of common gas carrier capacity.
- Cover all natural gas pipelines, on non- discriminatory and open access basis.
- Additional capital infusion of ₹ 1000 crore to Solar Energy Corporation of India.
- ₹ 1500 crore to IREDA, to give further boost to green energy sector.
Banking and Finance
- Insurance Act 1938 to be amended.
- To increase permissible FDI limit in insurance companies from 49% to 74%.
- Allow foreign ownership and control with safeguards.
- Asset Reconstruction Company Ltd to be set up.
- It will consolidate and take over existing stressed debts.
- Also, manage and dispose of assets for eventual value realization.
- Deposit Insurance Cover for bank customers to be increased from ₹ 1 lakh to ₹ 5 lakh.
- Provision to be streamlined to enable depositors get access to funds within insurance cover limit.
- Minimum loan size eligible for debt recovery under SARFAESI Act 2002, to be reduced from ₹ 50 lakh to ₹ 20 lakh.
- For NBFCs with minimum asset size of ₹ 100 crore
A single and rationalized Securities Markets Code to be set up, by consolidating provisions of:
- SEBI Act 1992,
- Depositories Act 1996,
- Securities Contracts Regulation 1956 and
- Securities Act 2007.
- For investor protection, Investor Charter to be introduced.
- Permanent institutional framework to set up, to instill confidence in corporate bond market participants during times of stress.
- To set up a system of regulated gold exchanges in the country, SEBI will be notified as regulator.
- Warehousing Dev. and Regulatory Authority will be strengthened.
- Two public sector banks apart from IDBI and one general insurance company to be taken up for strategic disinvestment in 2021-’22.
- IPO of LIC to be brought in this year.
- Policy on Strategic Disinvestment of Public Sector Enterprises has been approved.
- ₹ 1.75 lakh crore is estimated to be the receipts in 2021-’22, by way of strategic disinvestment.
- Previous budget for 2020-21 set a target of raising ₹2.1 lakh crore
Companies
- Definition of small companies under Companies Act 2013 to be revised.
- Companies with paid-up capital up to ₹ 2 crore & turnover up to ₹ 20 crore will fall under small companies.
- Benefit more than 2 lakh companies in compliance requirements.
- Promoting start-ups and innovators by incentivizing the incorporation of One Person Companies (OPCs):
- Allowing Non Resident Indians (NRIs) to incorporate OPCs in India.
- To further streamline Ease of Doing Business for cooperatives, a separate administrative structure for them to be set up .
Defence
- Ministry of defence has been allocated Rs 4,78,195.62 crore.
- Excluding pensions, it is pegged at Rs 3.62 lakh crore from last year’s Rs 3.37 lakh crore.
- Modernisation fund for the armed forces has gone up from Rs 1,13,734 last year to Rs 1,35,060 crore for the financial year 2021-22.
Agriculture
- Agricultural credit target enhanced to ₹ 16.5 lakh crore.
- Focus will be on ensuring increased credit flow to animal husbandry, dairy and fisheries sectors.
- Scope of Operation Greens Scheme to be extended from tomatoes, onions and potatoes to 22 perishable crops.
- Allocation for Rural Infrastructure Development Fund to be enhanced from ₹ 30,000 crore to ₹ 40,000 crore
- ₹ 5,000 crore Micro Irrigation Fund to be augmented by another ₹ 5,000 crore.
- 1,000 more mandis to be integrated with National Agriculture Market or eNAM.
- Agricultural Infrastructure Fund to be made available to APMCs for augmenting their infrastructure facilities
Dairy & Fisheries
Labour
- Portal that will collect relevant information on gig workers, building and construction workers and others to be launched.
- Will help formulate health, housing, skill, food, credit and insurance schemes for all migrant workers.
Education
- More than 15,000 schools to be qualitatively strengthened, with all components of National Education Policy.
- 100 new ‘Sainik’ schools to be set up.
- Higher Education Commission to be set up.
Budget 2021 – 2022 | Free PDF