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Monday, 1 February 2021

Budget 2021 Highlights: Fiscal deficit pegged at 6.8% of GDP for FY22; FM proposes Rs 64,180 cr for Atma Nirbhar health programme

Union Finance Minister Nirmala Sitharaman on Monday presented the Budget 2021-22 in Parliament. A total of around Rs 2 lakh crore on healthcare with Rs 35,000 crore on COVID-19 vaccine development and inoculation was announced.

During her third Budget speech under the Narendra Modi-led NDA government, Sitharaman said the government has estimated a fiscal deficit of 6.8 percent of the gross domestic product (GDP) in the next financial year.

Follow LIVE Updates on Budget 2021 here

However, the fiscal deficit in 2020-21 is estimated to soar up to 9.5 percent due to a rise in expenditure on account of the outbreak of COVID-19 and moderation in revenue during this fiscal year.

The finance minister provided a major boost to healthcare and infrastructure in Union Budget 2021. However, there was no change in Income Tax slabs this year.

In her speech, the finance minister mentioned that this year's budget proposals rest on six pillars — health and well-being, physical, financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R and D and Minimum Government and Maximum Governance.

Here are the key highlights of Nirmala Sitharaman's Budget speech 2021-22:

1) The finance minister proposed the introduction of Aatma Nirbhar health programme with an outlay of Rs 64,180 crore over six years; this in addition to the national health mission.

2) Main interventions under PM Aatmanirbhar Swasth Bharat Yojana would include:
- Support for Health and Wellness Centres
- Setting up Integrated Public Health labs in all districts
- Critical care hospital blocks
- Strengthening of NCDC

3) Sitharaman allocated a record sum of Rs 1,10,055 crore for Indian Railways, of which Rs 1,07,100 crore has been reserved for capital expenditure in 2021-22.

4) Finance Minister Nirmala Sitharaman's budget comprised of a massive impetus for Highways and Road Transport projects. The minister set aside Rs 1.03 lakh crores from the government exchequer for the sector, of which a mammoth share was allocated to the states which are due for Legislative Assembly elections this year.

5) The government proposed further recapitalisation of state-owned banks and earmarked Rs 20,000 crore for the purpose in FY2022.

6) "FDI in insurance companies has been increased from 49 percent to 74 percent, subject to specific compliance," said Nirmala Sitharaman.

In her 2019 budget speech, Sitharaman had said that the government will explore further easing the foreign direct investment (FDI) limit in insurance. The Insurance Regulatory and Development Authority of India (IRDAI) has also backed an increase in the limit to 74 percent.

7) BPCL, Air India, Shipping Corp, Container Corp and other disinvestments will be completed in 2021-22.

8) Barring four strategic areas, PSUs in other sectors will be divested, the finance minister said announcing the new disinvestment policy.

9) Sitharaman said the government will borrow about Rs 12 lakh crore in 2021-22. Presenting the Union Budget for 2021-22, she said expenditure for the next fiscal year has been pegged at Rs 34.83 lakh crore, which includes Rs 5.54 lakh crore of capital spending.

10) An announcement of Rs 25,000 crore road projects in poll-bound West Bengal was made during the Budget speech.

11) Ujjwala scheme will be expanded to over one crore more beneficiaries. "We will add 100 more districts in the next three years to the city gas distribution network. A gas pipeline project will be taken up in Jammu and Kashmir," said Sitharaman.

12) The finance minister also announced the scrappage of income tax for senior citizens under certain conditions, new rules for the removal of double taxation, among others.

"We shall reduce the compliance burden on our senior citizens who are 75 years of age and above. For senior citizens who only have pension and interest income, I propose exemption from filing their Income Tax return," the Union minister said.

13) Agriculture Infrastructure and Development Cess (AIDC) has been proposed on petrol and diesel. It will Rs 2.5/litre on petrol and Rs 4/litre on diesel.

With inputs from agencies



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