Union Budget 2021 - Major Highlights of Budget for FY 2021-22 for the Bankers

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Monday, 1 February 2021

Union Budget 2021 - Major Highlights of Budget for FY 2021-22 for the Bankers

Union Budget 2021 Highlights - Highlights of Finance Minister Nirmala Sitharaman's speech on the Union Budget for 2021-22 (Apr-Mar), made in Lok Sabha today:

 


FY-2022 ESTIMATES

* FY22 fiscal deficit pegged at 6.8% of GDP

* FY22 gross market borrowing pegged at 12 trln rupees

* To spend 34.83 trln rupees in FY22

* Propose 5.54-trln-rupee capex for FY22

* Allocate 2.2 trln rupees for health, wellbeing

* Disinvestment revenue seen 1.75 trln rupees

* Farm credit target 16.5 trln rupees

* Outlay for MSMEs at 157 bln rupees

* Allocate 37.68 bln rupees for census 

 

FY21 REVISED

* To borrow 800 bln rupees more from market in FY21

* Fiscal deficit pegged at 9.5% of GDP

* Spending seen 34.5 trln rupees

* Capital expenditure seen at 4.39 trln rupees


Also Read - Government May Cut Stake To 51% in These Four Public Sector Banks in this Budget

 

FISCAL HEALTH

* COVID necessitated deviation from FRBM Act

* To introduce amendment to FRBM Act

* To submit a fiscal deviation statement

* Fiscal deficit to fall below 4.5% of GDP by FY26

* Plan to move ahead on path of fiscal consolidation

* To augment contingency fund to 300 bln rupees

* To cap borrowing by states at 4% of GSDP in FY22

* States' fiscal deficit to reach 3% of their GDP by FY24

* Pandemic resulted in weak revenue flow

* Food subsidies to be financed by Budget

* Finance panel recommended 41% tax devolution to states

* Propose to divest 2 PSU banks, 1 general insurance company in FY22

* NITI Aayog to prepare list of PSUs to be divested

* To complete divestment of BPCL, Air India, IDBI, other companies in FY22

* Worked towards disinvestment in many companies despite COVID-19

* BEML, Shipping Corp, CONCOR divestment to be completed in FY22

* To bring down number of centrally sponsored schemes

* To bring revised mechanism for timely closure of sick PSUs

 

DIRECT TAX

* Seek to simplify direct tax regime

* No income tax return filing for pensioners above 75 years

* To cut time limit for tax assessment reopen to 3 years vs 6 years

* Setting up dispute resolution panel for small taxpayers

* To set up faceless income tax appellate tribunal

* To notify rules to protect NRIs from double taxation

* 110,000 tax-payers opted for Vivaad se Vishwas scheme

* Vivaad se Vishwas scheme saw 850-bln-rupee disputes for settlement

* Won't allow deductions if company late in depositing staff PF

* Doubling limit for tax audit for digital transactions

* Dividend payment to REITs, InVits exempt from TDS

 Tax holiday for aircraft leasing companies located in IFSC

* Tax holiday eligibility to startups extended to Mar 31, 2022

 

INDIRECT TAX

* To review more than 400 old customs duty exemptions

* Revised customs duty structure from Oct 1

* To rationalise customs duty on gold, silver

* Customs duty on copper scrap cut to 2.5%

* Customs duty on some mobile phone parts to be raised to 2.5%

* To reduce customs duty on some alloy, steel products to 7.5%

* Customs duty on naphtha cut to 2.5%

* Customs duty on solar inverter raised to 20%

* Customs duty on solar lanterns cut to 5%

* Increasing customs duty on some auto parts to 15%

* Propose hike in customs duty on steel screws to 15%

* Customs duty on finished synthetic gems to be raised

* Raising customs duty on cotton to 10%

* To take all possible measures to smoothen GST process

 

REFORMS

* To bring in needed legislative changes for divestment

* Propose to set up SPV for land monetisation

* To bring revised mechanism for timely closure of sick companies

* To form a single securities market code

* SEBI to be regulator of gold exchange

* New administrative framework for multi-state cooperatives

* Propose to discontinue loans to FCI from small savings fund

 

FINANCIAL SECTOR, MARKETS

* Allocate 200 bln rupees for recapitalisation of PSU banks in FY22

* To set up AMC to take bad loans

* Need measures to clean up bank books

* To up FDI limit in insurance to 74% from 49%

* To allow foreign control in insurance companies with safeguards

* Infrastructure debt funds can raise money via zero coupon bonds

* Affordable home projects can avail tax holiday for 1 more year

* Financial technology hub to be set up at GIFT City

* To create body to buy corporate bonds to develop secondary market* To rationalise functioning of tribunals

* To allocate 10 bln rupees for Solar Energy Corp of India

* To amend deposit insurance law to address depositors' issues

* To decriminalise Limited Liability Partnership Act, 2008

* NCLT framework to be strengthened, to implement 'e-courts'

* To hike capital, revenue cap for definition of small companies

* To incentivise incorporation of one-person companies

* To improve debt resolution for MSMEs

* Margin money requirement for Standup India loans cut to 15%

  

INFRASTRUCTURE, INDUSTRY

* Enhanced outlay of 1.18 trln rupees for road ministry

* Part of eastern freight corridor to be taken up in PPP

* Providing 180 bln rupees for public buses

* Record outlay for railways at 1.10 trln rupees

* Project reports to be prepared for 3 new freight corridors

* 100% electrification of broad rail routes by December 2023

* Adding new routes on rail freight corridors

* To launch scheme to run buses on PPP mode

* To provide 148 bln rupee for Phase 2 of Bengaluru metro project

* Framework to let consumers choose from more than 1 electricity distribution companies

* Major ports to bring private partner for management

* To launch hydrogen energy mission in FY22

* Seven port projects to be offered on PPP mode in FY22

* Launching voluntary vehicle scrappage policy

* Details of scrappage policy to be announced

* Scrappage policy for 15-year-old commercial vehicles

* Scrappage policy for 20-year-old personal vehicles

* To launch 7 mega investment textile parks over 3 years

* National infrastructure pipeline expanded to 7,400 projects

* To enhance share of central, state capex in infrastructure projects

* To have big thrust on monetisation of assets

* To set up national monetisation pipeline for brownfield projects

* Next lot of airports to be monetised

* Railways to monetise dedicated freight corridor assets

* Roads worth 50 bln rupees being transferred to NHAI InVit

* Plan more economic corridors for road infrastructure

* Suitable reforms to be made in InvITs, REITs

* Development institution loan book aim 5 trln rupees in 3 years

* Warehousing assets of PSUs to be monetised

* To launch development-finance institutions

* To enhance capex at central, state levels

* Over 2 trln rupees to states, autonomous bodies for capex

* To provide 200 bln rupees for development-finance institution

* Oil, gas pipelines of GAIL, IOC, HPCL to be monetised

* To set up independent gas transport system operator

* To make efforts to bring more ships to India for recycling

* To award 8,500 km of highways by March 2022

* 11,000 km of national highway corridor to be completed

* Launch deep ocean mission with 40-bln-rupee outlay for 5 years

* Total cost of AatmaNirbhar Bharat package 27.1 trln rupees

* AatmaNirbhar Bharat package was 13% of GDP

* Wish to lay a vision for Atmanirbhar Bharat

* AtmaNirbhar Bharat to boost infrastructure development

* AtmaNirbhar to strengthen 'Nation First' concept

 

SOCIAL SECTOR

* Express heartfelt gratitude to frontline COVID-19 workers

* Fight against COVID-19 continues into 2021

* Two or more COVID vaccines expected soon

* Allocate 350 bln rupees in FY22 for COVID-19 vaccines

* To launch health scheme worth 641.80 bln rupees over 6 years

* To set up 4 regional institutes for virology

* Committed to provide more for COVID vaccines if needed

* Operationalisation of 17 new public health units

* Support for over 17,000 rural, 11,000 urban health centres

* To strengthen National Centre for Diseases Control

* Expansion of integrated health database to all states

* Health spending to rise substantially

* To focus on education for all, inclusive development

* To focus on health, physical and financial infrastructure

* To launch urban Jal Jeevan Mission

* Five-year outlay for Jal Jeevan Mission 2.87 trln rupees

* Pradhan Mantri Ujjwala Yojana to be extended to 10 mln more beneficiaries

* To bring 100 more districts under city gas distribution

* Propose to launch portal to collect data on 'gig workers'

* Portal to also collect data on construction workers* Ration card portability to be completed in a few months

* To set up a central university in Leh

* National Research Foundation outlay 500 bln rupees over 5 years

* To set up mechanism to quickly address contractual disputes

 

FARM SECTOR

* Govt committed to welfare of farmers

* Immediate need to improve agriculture infrastructure

* Propose agriculture infrastructure development cess

* Paid farmers 751 bln rupees as wheat MSP in FY21

* FY21 paddy MSP scheme spend seen 1.72 trln rupees

* To add 1,000 more mandis to e-NAM

* To up rural infrastructure development fund corpus to 400 bln rupees

* To make agriculture infrastructure fund available to APMCs

* To develop 5 major fishing hubs

* To set up multipurpose seaweed park in Tamil Nadu

* Allocate 10 bln rupees for tea workers in Assam, Bengal

 

MISCELLANEOUS

* Preparation for Budget done under never-before circumstances

* Risk was far higher if lockdown wasn't imposed

* Measures announced in May were like five mini Budgets

* This will be a digital Budget, give thrust for new decade

* Focus on innovation, Research & Development

* Focus on minimum government, maximum governance

* India to have leading role in post-COVID world

* Opted for series of medium-sized economic packages in pandemic

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