For all those who don’t know what budget is, how it affects the citizens of a country and what are the key points of the Union Budget 2021. This blog is for you. A budget is basically a nation’s annual financial statement, which tells us about the income and expenditure of the Government.
Every year, the first day of February brings a lot of buzz with itself. The stock market, news channels, economists all become active because, on this very day, the Finance Minister of India presents the Union budget for the upcoming financial year (which starts from April 1).
All the states, ministries explain their income and expenses to the Finance Ministry, which then prepares the budget taking all their reports and future nation’s goals into consideration.
More about Budget 2021
The Government introduces new or makes changes in the ongoing schemes, programs to insure
the proper functioning of the economy and these schemes are the answer to why it affects a common man
People were especially keen to know about this year’s strategy of the Government to see how they are going to tackle the declining GDP and the economic slowdown brought by this pandemic.
On February 1, 2021, our current Finance minister Nirmala Sitharaman presented the annual budget for the financial year 2021-2022.
Here are some key highlights of the budget 2021 –
HEALTH GETS WEALTH- BUDGET 2021
One of the many things Covid made us realize was the urgent need for improvement in the health sector of our nation. The govt. has allocated Rs 2,23,846 crore in 2021-2022, which is 137% more as compared to last year (Rs 94,452 crore). Rs 35,000 crores have for the Covid-19 vaccine, and Finance Minister (FM) has promised to increase it if required. Also, PM Aatmanirbhar Swastha Bharat will launched with an outlay of 64,180 cr over the period of 6 years.
ON THE WAY TO PRIVATISATION? –
The Government has decided that two public-sector banks will be lined up for disinvestment, though the names aren’t revealed yet.
The Life Insurance Corporation of India will also go through an IPO (initial public offering).
But it’s not the way it looks; last year, the govt. Aimed at Rs.2.1 Lakh crores as disinvestment receipts and also tried to sell Air India, but the process has yielded no satisfactory results.
This year, the Government has estimated disinvestment receipts to be Rs 1,75,000 crore.
WHAT’S FOR THE FARMERS? BUDGET 2021
As the protest against the farm laws continues, everyone was expecting that the budget will offer something major for the farmers. Well, there was no such ‘big thing’ for the farmers, although the Finance Minister explained MSP and the growth of farmers in NDA’s tenure well.
The Government committed to the welfare of farmers. The MSP regime has undergone a change to
assure price that is at least 1.5 times the cost of production across all commodities. The total amount paid to paddy farmers surged to Rs 1.72 lakh crore in 2020-21.”
She also proposed an increase in the agriculture credit target to Rs 16.5 lakh crore.
THE CESS TAX BUDGET 2021
Agri infra cess will be imposed on several things such as 100% on alcoholic beverages, 30% on Kabuli chana, 10% on peas, 50% on Bengal gram/chickpeas, 20% on lentil (masur); 5% on cotton,17.5% on crude palm oil,
20% on crude soybean, sunflower oil, 2.5% on gold, silver, and dore bars; 35% on apples; 5% on specified fertilizer; 1.5% on coal, lignite, and peat. The prices of these products are therefore likely to see a rise.
THE TAX SIDE
After a coarse year for the middle class, many were expecting that the govt. It Will provide some relief on the income tax front, but nothing like that has happened. Though from now, the citizens of the age above 75 who are receiving pensions will not have to file an income tax return.
HIGHWAY PROJECTS – A BAIT?
Major highway projects also announced for Tamil Nadu (3,500 km – Rs 1.03 lakh crore), Kerala (1,100 km – Rs 65,000 crore), West Bengal (675 km – Rs. 25,000 crore) and Assam (1,300 km – Rs 34,000 crore).
The opposition has blamed the govt for offering highways as bait to the voters (especially for the Bengal election, which is nearby ). But it’s not a new thing, and all the governments do make offers like these when state elections are overhead.
The fiscal deficit is to be 6.8 percent of GDP in 2021-22. It is around 9.5 in 2020-2021.
According to the Government. It will brought down to 4.5 percent of GDP by 2025-26.
RAILWAY AND NATIONAL HIGHWAYS
Govt. proposed Rs 1.10 lakh crore outlay for railways and said that we aim to complete 11,000 km of national highway infrastructure in the upcoming year.
RENEWABLE ENERGY INVESTMENTS
Rs 1,000 crore has been assigned to solar energy corporation and Rs 1,500 to renewable energy development.
The govt. will also be launching the Hydrogen Energy mission this year for generating hydrogen from green power sources.
ORGANISING THE UNORGANISED
Finance Minister also proposed a portal for the gig-workers, building, and construction workers.
She said, “Social security benefits will be extended to gig and platform workers. Minimum wages will apply to all categories of workers.
Women will be allowed to work in all categories and also in night shifts with adequate protection.
To further extend efforts towards the unorganized labor force, I propose to launch a portal to collect relevant information on gig workers, building/construction workers, among others.
It’ll help formulate health, housing, skill, insurance credit & food schemes for migrant workers,”
SUPPORT FOR THE STARTUPS
There are many beneficial points for the startups and small businesses in this budget.
Previously any company with less than five crore turnover was free to not have a tax audit done by a CA, and now this limit has been pushed to 10 crores.
It’s also been said that the definition of small businesses (which used to have an annual turnover of fewer than two crores ) will be changed because this two crore limit has been a push to 20 crores.
With this, more businesses will be eligible to enjoy the luxuries a small company enjoys.
The startups will also get capital gains exemption by one more year to March 31, 2022, and one more year to claim tax holiday.
SOME UNIQUE POINTS ABOUT BUDGET 2021
The central govt. Is planning to open a multipurpose seaweed park in Tamil Nadu, which will promote seaweed cultivation. The finance minister has also allocated Rs.4000 crores to a deep ocean mission. Looking into the matter of air pollution, Vehicle scrappage policies have also been introduced.
So, these were some of the major takeaways from the 2021-22 budget. Overall the budget has received a neutral or fairly good response, and now it’s up to the Government on how much they deliver.
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