UNION BUDGET - 2021 

Union Budget 2021 was announced by Finance Minister Nirmala Sitaraman .

Everyone was waiting for the budget after the covid pandemic . Due to covid 19 market was getting very crash students , small medium large enterprises  manufacturers were eagerly waiting for the announcements. 

Finance Minister Announced many tax reforms in her 2021 budget 

HIGHLIGHTS OF BUDGET 

1. Increase in expenditure of around 35000 crore on healthcare for development of covid 19 vaccine 
2. Total of around 2 lakh crore on healthcare .
3. Scrapping of income tax for senior citizens under certain conditions.
4. New rules for removal of double taxation for NRI ‘S
5. Reduction in the time period of tax assessments .
6. Start up is going to get a tax extension holiday for another year .
7. Advance tax liability has arisen after declaration of dividend payment.
8. Benefit under ujjawala scheme .
9. Significant spending on highwayBUDGET 2021 

Union Budget 2021 was announced by Finance Minister Nirmala Sitaraman .

Everyone was waiting for the budget after the covid pandemic . Due to covid 19 market was getting very crash students , small medium large enterprises  manufacturers were eagerly waiting for the announcements. 

Finance Minister Announced many tax reforms in her 2021 budget 

HIGHLIGHTS OF BUDGET 

1. Increase in expenditure of around 35000 crore on healthcare for development of covid 19 vaccine 
2. Total of around 2 lakh crore on healthcare .
3. New rules for removal of double taxation for NRI ‘S
4. Reduction in the time period of tax assessments .
5. Start up is going to get a tax extension holiday for another year .
6. Advance tax liability has arisen after declaration of dividend payment.
7. Benefit under ujjawala scheme .
8. Significant spending on highway road expansion .

GOVERNMENT EMPHASISED ON CAPITAL EXPENDITURE 

1. Aim was to push the spendings on public infrastructure.
2. A sharp increase in capital expenditure to RS 5.54 lakh crore in 2021-2022
3. Creation of National Monetisation Pipeline of potential infrastructure assets.
4. Setting up a Development Financial Institution with almost 20000 crore.

Also she added that the National infrastructure pipeline was launched in December 2019 with around 6835 projects and now it has been extended to 7400 projects .

BUDGET 2021 : FINANCIAL YEAR 2022 FISCAL DEFICIT TARGET AT 6.8 %

 Government has projected a fiscal deficit of 6.8 % of Gross Domestic Product (GDP) for financial year 2021 - 22 .with aim to reduce it to 4.5 % by financial year 2025 - 26. Due to covid 19 the government faced an unprecedented adverse shock to the economy in 2020-2021 . It is the major reason for changing Fiscal Responsibility and Budget Management .

It marked a sharp departure from fiscal deficit projection of 3.3 percent of GDP for 2021-22 . earlier it was estimated to 3.5 % now has revised to 9.5% of GDP. 

NO RETURN FILLING FOR PENSIONERS OVER 75 

On Monday when Nirmala Sitaraman announced her budget she came out with measures to ease the tax compliance burden on senior citizens above the age of 75 years .

Small companies to improve dispute resolution mechanisms in the union budget for 2021-2022.

During her announcement she presented an extension of key provisions allowing  startups to claim a tax holiday for another year . 

Also she added that individual to claim an exemption on capital gains if it has been invested in startups.

For senior citizens who are above age of 75 who only have interest and pension as an income source will be exempted from filing their income tax returns . The bank is going to deduct the necessary tax on their income.

INSURANCE SECTOR THROWN OPEN :

Nirmala Sitaraman in her Financial Budget announced that the FDI limit would increase from 49 % to 79% in the insurance sector. 

Foreign companies will inflow in insurance which will enable them to become more effective for creating long term household saving in the market .

Also she proposed to amend the insurance act 1938 to increase the permissible FDI limit from 49% to 74% in insurance companies.

EASING CREDIT :TO FUND GROWTH CYCLE 

Union Finance Minister Nirmala Sitaraman on Monday announced a creation of assets reconstruction company / asset management company (ARC/ AMC) To clean up the books of banks .

She also proposed a development financial institution to start a long term funding of rs 5 lakh crore in 3 years for infrastructure projects .

The aim of “Bad Banks” is to estimate the bad assets at a discounted price in the market . This will help the commercial bank to clear their balance sheet . Around 899,803 crore of gross NPAs as on march 2020 is expected to be transferred to bad banks .

IMPACT OF BUDGET 2021 ON COVID 19 

As per now covid 19 has crossed 1 crore marks and claiming nearly 1.54 lakh lives , the Government has allocated RS 64180 crore .

The union budget which was presented on monday emphasised on upgrading public health care infrastructure under Pradhan Mantri Atam Nirbhar Swasth Bharat .

She proposed a total expenditure on “Health and wellbeing” at Rs 223,846 crore an increase of 137 % including Rs 35000 crore for immunisation .

LOWER SPENDING UNDER PRADHAN MANTRI KISAN YOJANA  

However the Union Finance Minister did not say anything regarding PM Kisan in her Budget but she confirmed the Minimum Support Price to the farmers . 

As per the figures which were earlier allocated to farmers in F.Y 2019 -2020 were not spended accurately by the agricultural Minister which led to reduction in allocation of revised estimate .

In the union budget

 Department of Agriculture , cooperation and Farmers welfare 

And Department of Agriculture Ministry 

Has now been allocated an amount of RS 131,531.19 crore lower than the current financial year .

While the DAM has evaluated a mild increase of RS 8513.62 crore 

LOAN THAT BRACE UP RAILWAY FINANCE :RS 80000

A Sum of 80000 was saved by indian railway this year and also helped to manage the finance when the train system was on halt during the pandemic . 

Rs 79,398 crore loan was provided to the government employers to meet their pension liability of RS 51000 crore  and cover up the shortfall that was faced by transporters in this financial years  it will be shown as “special loan” in books of account .

BUDGET INDICATE CENTRE’S EFFORTS TO SIDELINE NON -BJP STATES 

The Union Budget reflected sideline non-BJP government states ; such as Punjab . The Punjab finance minister claimed that the union budget has completely ignored the complete “NORTH INDIA '' He criticised and said that the government was neglected towards northern states .

The main focus of the budget revolved around covid 19 pandemic , recovery of deflation of the economy , promoting the growth and development of the country. They targeted creating job opportunities , higher spending on the growth and development sector .