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

FY22 ESTIMATES (HIGHLIGHTS)

  • 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.

FISCAL HEALTH  (HIGHLIGHTS)

  • 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 (HIGHLIGHTS)

  • 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 (HIGHLIGHTS)

  • 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 (HIGHLIGHTS)

  • 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 (HIGHLIGHTS)

  • 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 (HIGHLIGHTS)

  • 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 (HIGHLIGHTS)

  • 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 virolog.
  •  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 (HIGHLIGHTS)

  • 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