India’s Union Budget 2021 focused on higher capital expenditure while exempting senior citizens from IT filing.
India was eagerly waiting for the budget announcement for the financial year 2021-22. The Union Budget 2021 was presented by Nirmala Sitharaman, Finance Minister, on 1st February. The budget speech focused on Aatmanirbhar Bharat Vision. The minister went on to disclose the hardships and the economic contraction that the country faced during the Covid-19 pandemic, where India’s GDP fell by 23.9% compared to 2019.
The Union Budget 2021 takes steps to encourage industrial growth and kickstart the economy once again. Let us look at some of the critical points discussed in the budget.
Fiscal deficit to Reduce From 9.5% to 4.5%
The budget proposes to bring down the fiscal deficit from 9.5% of GDP in the financial year 2021-2022 to 6.8%. It further expects to bring it down to 4.5% by 2025-26. The pandemic scenario witnessed a push down of revenues when the expenditures skyrocketed. The government would approach markets to fetch an additional 80,000 crores in the coming two months. The budget estimate for expenditure is Rs38.83 lakh crores in the coming financial year.
The Government looks forward to selling equity stakes in BPCL, Air India, Shipping Corporation of India, and many others in the financial year 2021-22. Privatization of IDBI bank along with two public sector banks is included in the proposal. The post disinvestment period is expected to escalate economic growth by including private capital, technology, and best management practices.
Huge Investments In The Health Industry
The proposed budget outlay for health and wellbeing is Rs 2,23,846 crores with an increase of 137% from the previous budget. The budget for the year 2021-22 has Rs 35,000 crores solely allocated for Covid-19 vaccines. The government will launch a new centrally sponsored scheme called, PM Atma Nirbhar Swasth Bharat Yojana to develop capacities of primary, secondary, and tertiary healthcare systems. The scheme will have an outlay of almost Rs 64,180 crores over six years and will cater to treat new emerging diseases.
Major Expressways With Better Traffic Management
The budget plans to flagship more national highways and augment road infrastructure, and complete11,000 km long national highway corridors by March 2022. Delhi- Mumbai Expressway, Bengaluru-Chennai Expressway, and Kanpur-Lucknow Expressway are some of the major corridors, in sight. The budget proposes the installation of an advanced traffic management system with speed radars, variable message signboards, and GPS enabled recovery vans.
Tax Filing Relaxations
Although the taxes are unchanged, citizens get several exemptions and relaxations in tax filing. The budget exempts senior citizens above the age of 75 or above, from income tax filing. The exemption is applicable to all the senior citizens who have only interest income apart from the pension income. Start-ups will get an extension in the tax holiday by one more year in order to encourage more start-ups. The limit for tax audits that are 95% performed through a digital platform will be increased from Rs5 to Rs10 crores. Finance Minister said that this step is taken to incentivise digital transactions.