Highlights of Union Budget 2021-22

Terming 2021 as a milestone year, the FM presented a socially inclusive and growth-focused budget.

Highlights of Union Budget 2021-22

Finance Minister Nirmala Sitharaman presented her third budget under the NDA government. In a significant departure from tradition, Budget 2021-22 was presented digitally for the first time since India’s independence.

Ms Sitharaman said the budget for 2021-22 rests on six pillars: health and well-being, physical and financial capital and infrastructure, inclusive development for aspirational India, reinvigoration of human capital, innovation and R&D, and minimum government with maximum governance.

The budget was acclaimed as being focused on long-term growth and sustainability. Here are some of its key takeaways.

Personal tax

  • No tax will be levied on annual income up to Rs 5 lakh
  • No change in 80C deductions, which will continue to be Rs 1.5 lakh for FY 2021-22
  • Pensioners over the age of 75 are exempt from filing returns
  • A faceless dispute redressal mechanism will be put in place for small taxpayers
  • Proposal to extend tax holiday on affordable housing projects till 31 March 2022
  • Guidelines to eliminate double taxation for NRIs on foreign retirement funds
  • Time limit for re-opening of tax assessment to be reduced to three years from the existing six years

Healthcare

  • Allocation to healthcare up by 137% to 2.23 lakh crore in 2021-22
  • Rs 35,000 crore earmarked for COVID-19 and pneumococcal vaccination
  • Institution of 17,000 rural and 11,000 urban health and wellness centres, integrated public health labs, and strengthening of the NCDC under PM Aatmanirbhar Swasth Bharat Yojana
  • Rs 64,180 crore to be invested over a 6-year period to improve primary, secondary, and tertiary healthcare

Social development

  • PM Ujjwala Yojana scheme to be extended to one crore more beneficiaries
  • Rs 2.87 lakh crore to be allocated to Jal Jeevan Mission over the next 5 years
  • Launch of Swachch Bharat Mission (Urban) with Rs 1,41,678 crore expenditure over the next 5 years
  • Migrant workers can claim ration under 'One Nation One Ration Card'
  • Proposal to launch a portal to collect relevant information of gig/contract workers; the data will be used to ensure minimum wage benefits, and formulate health, housing, skill, insurance credit, and food schemes for migrant workers
  • Special welfare scheme for children and women in Assam, with Rs 1000 crore allocated for tea workers in Bengal and Assam

Banking and finance

  • Capital infusion of Rs 20,000 crore for public sector banks
  • Institution of an Asset Reconstruction Company to manage bad loans of banks
  • Proposal to launch a new development financial institution with Rs 20,000 crore capital that will fund long gestation projects with a lending portfolio of at least Rs 5 lakh crore within the next 3 years
  • Rural infrastructure fund increased to Rs 40,000 crore
  • Monetisation of assets of NHAI, PGCIL, railways, airports, warehouses, etc.
  • Government to divest from all non-strategic sectors; divestments from Air India, BPCL, CONCOR and Pawan Hans to be completed in FY 2021-22

Infrastructure

  • Rs 20,000 crore allocated to enhancing infrastructure
  • Over 11,000 km of national highways to be completed by March 2022
  • Rs 1.10 lakh crore allocated to Indian Railways, of which Rs 1.7 lakh crore is earmarked for capital expenditure
  • Public transportation (buses) to get Rs 18,000 crore
  • More airports to be privatised in Tier II and Tier III cities
  • Rs 3.05 lakh crore outlay for the power sector; Rs 1000 crore and Rs 1500 crore to be allocated to solar and renewable energy development agencies
  • 100 more cities to be added to the gas distribution network over the next 3 years

Others

  • Allocation to defence up by 1.4% to Rs 4.78 lakh crore for FY 2021-22, with Rs 1.35 lakh crore allocated for capital expenditure
  • Sports budget cut by 18% to Rs 2596 crore
  • Funds earmarked for MSMEs double to Rs 15,700 crore
  • Norms for startups relaxed with respect to members, paid-up capital and turnover
  • Over 15,000 schools to be strengthened under the National Education Policy
  • Establishment of over 150 higher education institutions for degree diploma courses by March 2021
  • Farm credits for FY 2021-22 estimated at Rs 16.5 lakh crore
  • MSP regime to ensure at least 1.5 times the cost of production recovered across all commodities
  • 1000 mandis to be integrated with electronic national market

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