According to the Lok Sabha calendar, Union Budget 2021 will be presented in the Parliament on 1st February 2021 at 11.00 AM. This was the third budget for Nirmala Sitharaman as the Finance Minister of India under the National Democratic Alliance (NDA) government led by Prime Minister Narendra Modi. The theme of the 2021 year’s budget largely circles around Covid-19, economic recovery, and growth. Union Budget 2021 highlights are discussed in this article.
Union Budget 2021 Highlights
The final report covering 2021-26 was submitted to the President, retaining vertical shares of states at 41%
- Funds to UTs of Jammu and Kashmir and Ladakh would be provided by the Centre
- On the Commission’s recommendation, Rs. 1,18,452 crores have been provided as Revenue Deficit Grant to 17 states in 2021-22, as against Rs. 74,340 crores to 14 states in 2020-21.
- Net borrowing for the states allowed at 4% of GSDP for the year 2021-2022 as per the recommendation of 15th FC.
- States expected to reach a fiscal deficit of 3% of GSDP by 2023-24, as recommended by the 15th Finance Commission
The Union Budget 2021-22 gained the status of the first-ever digital Union Budget. The Finance Minister pointed towards many important milestones for our history in 2021:
- It is the 75th year of Independence
- 60 years of Goa’s accession to India
- 50 years of the 1971 India-Pakistan War
- It will be 4 the year of the 8th Census of Independent India
- it will also be India’s turn at the BRICS Presidency
- the year for our Chandrayaan-3 Mission, and the
- Haridwar Maha-Kumbh.
The budget proposals for 2021-2022 rest on 6 pillars:
- Health and Wellbeing
- Physical and Financial Capital and Infrastructure
- Inclusive Development for Aspirational India
- Reinvigorating Human Capital
- Innovation and R&D
- Minimum Government, Maximum Governance
The proposals in Part A of the Union Budget 2021, will further strengthen the Sankalp of Nation First, Doubling Farmer’s Income, Strong Infrastructure, Healthy India, Good Governance, Opportunities for Youth, Education for All, Women Empowerment, and Inclusive Development among others.
Health and Wellbeing
- Investment in Health Infrastructure in this Budget has increased substantially. The focus was made on strengthening three areas: Preventive, Curative, and Well-being.
- A new centrally sponsored scheme, PM Atma Nirbhar Swasth Bharat Yojana, will be launched with an outlay of about Rs. 64,180 crores over 6 years.
13 promises made in the Union Budget 2015-16 and resonating with the vision of Aatma Nirbharta, to materialize during the Amrut Mahotsav of 2022 – on the 75th year of our independence.
- One Nation One Ration Card
- Agriculture and Labour Reforms
- Redefinition of MSMEs
- Commercialization of the Mineral Sector
- Privatization of Public Sector Undertakings
- Production Linked Incentive Schemes
This will develop capacities of primary, secondary, and tertiary care Health Systems, strengthen existing national institutions and create new institutions, to cater to the detection and cure of new and emerging diseases. This will be in addition to the National Health Mission.
To strengthen nutritional content, delivery, outreach, and outcome, the Supplementary Nutrition Programme and the Poshan Abhiyan will be merged and launch the Mission Poshan 2.0.
Universal Coverage of Water Supply
- The Jal Jeevan Mission (Urban), will be launched.
- It aims at a universal water supply in all 4,378 Urban Local Bodies with 2.86 crores household tap connections, as well as liquid waste management in 500 AMRUT cities.
- It will be implemented over 5 years, with an outlay of Rs. 2,87,000 crores.
Swachch Bharat, Swasth Bharat
Focus on complete fecal sludge management and wastewater treatment, source segregation of garbage, reduction in single-use plastic, reduction in air pollution by effectively managing waste from construction-and-demolition activities, and bio-remediation of all legacy dump sites.
The Urban Swachh Bharat Mission 2.0 will be implemented with a total financial allocation of Rs. 1,41,678 crores over a period of 5 years from 2021-2026.
To tackle the burgeoning problem of air pollution, an amount of Rs. 2,217 crores for 42 urban centers with a million-plus population in this budget.
- The Pneumococcal Vaccine, a Made in India product, is presently limited to only 5 states will be rolled out across the country. This will avert more than 50,000 child deaths annually.
- Rs. 35,000 crores for Covid-19 vaccine in BE 2021-22.
- The Budget outlay for Health and Wellbeing is Rs.2,23,846 crores in BE 2021-22 as against this year’s BE of Rs. 94,452 crores an increase of 137 percent.
Voluntary vehicle scrapping policy to phase out old and unfit vehicles 1′ Fitness tests in automated fitness centers:
- After 20 years in the case of personal vehicles
- After 15 years in case of commercial vehicles
Physical and Financial Capital and Infrastructure
- AtmaNirbhar Bharat – Production Linked Incentive scheme (PLI)
- Rs. 1.97 lakh crores, over 5 years starting FY 2021-22. This initiative will help bring scale and size in key sectors, create and nurture global champions and provide jobs to our youth.
A scheme of Mega Investment Textiles Parks (MITRA) will be launched in addition to the PLI scheme.
Roads and Highways Infrastructure
Rs. 1,18,101 lakh crores, highest ever outlay, for Ministry of Road Transport and Highways – of which Rs. 1,08,230 crores is for capital.
Under the Rs. 5.35 lakh crore Bharatmala Pariyojana, more than 13,000 km length of roads worth Rs. 3.3 lakh crore awarded for construction:
- 3,800 km have already been constructed
- Another 8,500 km to be awarded for construction by March 2022
- An additional 11,000 km of national highway corridors to be completed by March 2022
Economic corridors being planned:
- Rs. 1.03 lakh crore outlay for 3,500 km of NH in Tamil Nadu
- Rs. 65,000 crore investment for 1,100 km of NH in Kerala
- Rs. 25,000 crores for 675 km of NH in West Bengal
- Over Rs. 34,000 crore to be allocated for 1300 km of NH to be undertaken in next 3 years in Assam, in addition to Rs. 19,000 crore works of NH currently in progress in the State
- Delhi-Mumbai Expressway – Remaining 260 km to be awarded before 31.3.2021
- Bengaluru-Chennai Expressway – 278 km to be initiated in the current FY; construction to begin in 2021-22
- Kanpur-Lucknow Expressway – 63 km expressway providing an alternate route to NH 27 to be initiated in 2021-22
- Delhi-Dehradun economic corridor – 210 km to be initiated in the current FY; construction to begin in 2021-22
- Raipur-Vishakhapatnam – 464 km passing through Chhattisgarh, Odisha, and North Andhra Pradesh, to be awarded in the current year; construction to start in 2021-22
- Chennai-Salem corridor – 277 km expressway to be awarded and construction to start in 2021-22
- Amritsar-Jamnagar – Construction to commence in 2021-22
- Delhi-Katra – Construction will commence in 2021-22
Advanced Traffic management system in all-new 4 and 6-lane highways:
- Speed radars
- Variable message signboards
- GPS enabled recovery vans will be installed
- Indian Railways have prepared a National Rail Plan for India – 2030.
- The Plan is to create a ‘future-ready’ Railway system by 2030.
- 100% electrification of Broad-Gauge routes to be completed by December 2023.
- Western Dedicated Freight Corridor (DFC) and Eastern DFC will be commissioned by June 2022.
- Rs. 1,10,055 crores, for Railways of which Rs. 1,07,100 crores is for capital expenditure.
- Broad Gauge Route Kilometers (RKM) electrification to reach 46,000 RKM, i.e. 72% by end of 2021.
- Undertake future dedicated freight corridor projects namely the East Coast corridor from Kharagpur to Vijayawada, East-West Corridor from Bhusaval to Kharagpur to Dankuni, and North-South corridor from Itarsi to Vijayawada.
Passenger convenience and safety:
- Aesthetically designed Vista Dome LHB coach on tourist routes for better travel
- High-density network and highly utilized network routes to have an indigenously developed automatic train protection system, eliminating train collision due to human error.
Central counterpart funding will be provided to:
- Kochi Metro Railway Phase-II of 11.5 km at a cost of Rs. 1957.05 crores.
- Chennai Metro Railway Phase-II of 118.9 km at a cost of Rs. 63,246 crores.
- Bengaluru Metro Railway Project Phase 2A and 2B of 58.19 km at a cost of Rs. 14,788 crores.
- Nagpur Metro Rail Project Phase-II and Nashik Metro at a cost of Rs. 5,976 crores and Rs. 2,092 crores respectively.
A total of 702 km of the conventional metro is operational and another 1,016 km of metro and RRTS is under construction in 27 cities
‘MetroLite’ and ‘MetroNeo’ technologies to provide metro rail systems at a much lesser cost with similar experience in Tier-2 cities and peripheral areas of Tier-1 cities.
- Added 139 Giga Watts of installed capacity, connected an additional 2.8 crores households, and added 1.41 lakh circuit km of transmission lines.
- Rs. 3,05,984 crore over 5 years for a revamped, reforms-based, and result-linked new power distribution sector scheme
- A comprehensive National Hydrogen Energy Mission 2021-22 to be launched.
Ports, Shipping, Waterways
- 7 projects worth more than Rs. 2,000 crores will be offered by the Major Ports on Public-Private Partnership mode in FY21-22.
- A scheme to promote the flagging of merchant ships in India will be launched by providing subsidy support to Indian shipping companies in global tenders floated by Ministries and CPSEs.
- For this, an amount of Rs. 1624 crores will be provided over 5 years.
Petroleum & Natural Gas
- Ujjwala Scheme which has benefited 8 crores households will be extended to cover 1 crore more beneficiaries.
- Add 100 more districts in the next 3 years to the City Gas Distribution network.
- A gas pipeline project will be taken up in the Union Territory of Jammu & Kashmir.
- An independent Gas Transport System Operator will be set up for facilitation and coordination of booking of common carrier capacity in all-natural gas pipelines on a non-discriminatory open access basis.
- A single Securities Markets Code to be evolved
- Support for development of a world-class Fin-Tech hub at the GIFT-IFSC
- A new permanent institutional framework to help in the development of the Bond market by purchasing investment-grade debt securities both in stressed and normal times
- Setting up a system of Regulated Gold Exchanges.
- Under Stand Up India Scheme for SCs, STs, and women,
- Margin money requirement reduced to 15%
- To also include loans for allied agricultural activities
- Rs. 15,700 crore budget allocation to MSME Sector, more than double of this year’s BE
- Inclusive Development for Aspirational India
- Ensured MSP at minimum 1.5 times the cost of production across all commodities.
- Enhancing the allocation to the Rural Infrastructure Development Fund from Rs. 30,000 crores to Rs.40,000 crores.
- The Micro Irrigation Fund, with a corpus of Rs. 5,000 crores have been created under NABARD, I propose to double it by augmenting it by another Rs. 5,000 crores.
- Investments to develop modern fishing harbors and fish landing centers – both marine and inland
- 5 major fishing harbors – Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat to be developed as hubs of economic activity
- Multipurpose Seaweed Park in Tamil Nadu to promote seaweed cultivation
Reinvigorating Human Capital
The National Education Policy (NEP) announced recently has had good reception.
- More than 15,000 schools will be qualitatively strengthened to include all components of the National Education Policy.
- 100 new Sainik Schools will be set up in partnership with NGOs/ private schools/states.
- In 9 such cities, create formal umbrella structures so that these institutions can have better synergy, while also retaining their internal autonomy. A Glue Grant will be set aside for this purpose.
- For accessible higher education in Ladakh, Central University to set up in Leh.
Scheduled Castes and Scheduled Tribes Welfare
750 Eklavya model residential schools in tribal areas:
- The unit cost of each school to be increased to 38 crore
- For hilly and difficult areas, to 48 crore
- Focus on the creation of robust infrastructure facilities for tribal students
Revamped Post Matric Scholarship Scheme for the welfare of SCs
- Rs. 35,219 crores enhanced Central Assistance for 6 years till 2025-2026
- 4 crore SC students to benefit
- A proposed amendment to Apprenticeship Act to enhance opportunities for youth
- Rs. 3000 crores for realignment of existing National Apprenticeship Training Scheme (NATS) towards a post-education apprenticeship, training of graduates and diploma holders in Engineering
Initiatives for partnership with other countries in skilling to be taken forward, similar to partnership:
- With UAE to benchmark skill qualifications, assessment, certification, and deployment of certified workforce
- With Japan for a collaborative Training Inter Training Program (TITP) to transfer of skills, technique, and knowledge.
Innovation and R&D
- Rs. 1,500 crores for proposed scheme to promote digital modes of payment
- National Language Translation Mission (NTLM) to make governance-and-policy related knowledge available in major Indian languages
- PSLV-CS51 to be launched by New Space India Limited (NSIL) carrying Brazil’s Amazonia Satellite and some Indian satellites
- As part of the Gaganyaan mission activities 4 Indian astronauts being trained on Generic Space Flight aspects, in Russia. The first unmanned launch is slated for December 2021
- 4,000 crores over five years for Deep Ocean Mission survey exploration and conservation of deep-sea biodiversity.
Modalities of National Research Foundation announced in July 2019 –
- Rs. 50,000 crores outlay over 5 years
- To strengthen the overall research ecosystem with a focus on national-priority thrust areas
Minimum Government, Maximum Governance
- 3,768 crores allocated for the first digital census in the history of India
- 300 crore grants to the Government of Goa for the diamond jubilee celebrations of the state’s liberation from the Portuguese
- 1,000 crores for the welfare of Tea workers especially women and their children in Assam and West Bengal through a special scheme
- National Commission for Allied Healthcare Professionals already introduced to ensure transparent and efficient regulation of the 56 allied healthcare professions
- The National Nursing and Midwifery Commission Bill introduced the same in the nursing profession.
In Part B of the Union Budget 2021, the direct and indirect tax proposals were laid for:
Direct Tax Proposals
Indirect Tax Proposals
Relief to Senior Citizens
Reduction in Time for Income Tax Proceedings
Setting up the Dispute Resolution Committee
Relaxation to NRI
Exemption from Audit
Relief for Dividend
Attracting foreign investment into the infrastructure sector
Affordable Housing/Rental Housing
Tax incentives to IFSC
Pre-filling of Returns
Relief to Small Trusts
Custom Duty Rationalization
Electronic and Mobile Phone Industry
Iron and Steel
Gold and Silver
- Corporate tax rate slashed to make it among the lowest in the world
- The burden of taxation on small taxpayers eased by increasing rebates
- Return filers almost doubled to 6.48 crore in 2020 from 31 crores in 2014
- Faceless Assessment and Faceless Appeal introduced
- Relief to Senior Citizens: Exemption from filing tax returns for senior citizens over 75 years of age and having only pension and interest income; tax to be deducted by paying bank.
- Relaxation to NRI- removing their hardship of double taxation.
- Incentives for Start-ups- In order to incentivize start-ups in the country, extends the eligibility for claiming tax holiday for start-ups by one more year – till 31st March 2022.
- Basic Customs Duty (BCD) on caprolactam, nylon chips, and nylon fiber & yarn reduced to 5%
- Duty on Naptha reduced to 2.5%
- Customs duty on cotton increased from nil to 10% and on raw silk and silk yarn from 10% to 15%.
- Customs duty reduced uniformly to 7.5% on semis, flat, and long products of non-alloy, alloy, and stainless steels
- Customs duty on gold and silver to be rationalized
- Duty on solar invertors raised from 5% to 20%, and on solar lanterns from 5% to 15% to encourage domestic production
- Duty on steel screws and plastic builder wares increased to 15%
- Prawn feed to attract customs duty of 15% from earlier rate of 5%
- Agriculture Infrastructure and Development Cess (AIDC) on a small number of items
- Duty on steel scrap exempted up to 31st March 2022
- Duty on some parts of mobiles revised to 2.5% from ‘nil’ rate
So, these are the Union Budget 2021 highlights. Aspirants can get the essential takeaway notes for the competitive exams from our online classes. Also, can practice rank-booster quizzes based on the Union Budget 2021.