Union Budget 2021 | Key Highlights and Analysis | ETMONEY

Описание: On 1st February 2021, the Finance Minister Nirmala Sitharaman presented the Government of India’s Union Budget for 2021-22. This budget was truly significant as it came in the backdrop of a contracted Indian economy (a first in four decades) due to the disruption caused by the coronavirus pandemic. The government’s budget had to not only repair, restore and rebuild India’s finances but renew the faith of the citizens of India & show a pathway to progress.

What’s covered in this video?
00:00 Introduction
01:13 Healthcare and Wellness
02:09 Growth and Investment Drivers
05:22 Balancing the Books
07:47 Taxes
10:46 ETMONEY Opinion

Here are some major announcements and highlights of the Union Budget 2021-22

👉 HEALTHCARE AND WELLNESS

► The budget allocated ₹2,83,000 crores to the healthcare and wellness sector
► The plan of action allowed for the setting up on almost 30,000 rural and urban health and wellness centres
► The finance minister also allocated ₹35,000 crores for the Covid-19 vaccine with a commitment of providing additional funds if required.

👉 GROWTH & INVESTMENT DRIVERS

The finance minister reinforced the government’s commitment towards building an Aatmanirbhar Bharat with an expansionary budget aimed at boosting capital expenditure, increasing spending and providing greater employment opportunities.

Major announcements in Infrastructure:
► Public-Private partnership mode in major ports
► More projects under National Infrastructure Pipeline
► Public transport outlay of ₹18,000 crores
► Build Metrolite and related technology in Tier 2 cities
► ₹1,00,000 crores allocated to build 11,000 kilometers of the national highway corridor.

Major announcements in Manufacturing:
► Creation of 7 mega textile parks
► Production Linked Incentive scheme or PLI for large-scale electronics manufacturing which aims to make India a global hub for manufacturing and exports

Net net, the government’s capital expenditure for FY22 is quite generous at ₹5.54 lakh crores which is a good 35% higher than last year.

Major announcements in Investments:
► The increase in FDI from the current 49% to 74% in insurance companies
► Public sector bank recapitalization of ₹20,000 crores has been proposed for FY22
► Setting up of a Development Finance Institution

👉 BALANCING THE BOOKS & THE FISCAL DEFICIT

On a macro level, the country’s fiscal deficit is estimated at 9.5% of GDP for FY21 i.e. the period between April 2020 and March 2021. For FY22, the finance minister estimates a fiscal deficit of 6.8% with a projection of steadily reducing it to below 4.5% by 2025-26

How is the government managing the fiscal deficit for FY22?
► Borrowing of ₹12,00,000 crores
► Strategic divestment of 2 public sector banks and 1 general insurance company.
► Initial Public Offering (IPO) of LIC of India
► Sale of Air India and BPCL
► Sale of non-core assets like surplus land

All put together, the government has a divestment target of ₹1,75,000 crores for FY22

👉 TAXES

There are no major changes in the direct taxes

The focus is this budget was on improving the tax experience via:
► Extending the Vivad se vishwas scheme until 28th Feb 2021
► Reduction in tax assessment reopening from 6 to 3 years
► Lower litigation with small tax payers
► Increase tax audit limits

Further, in a relief to senior citizens aged 75 years and over who have only pension and interest income, the budget has waived off their income tax returns filing requirement.

Some relaxation has been provided to NRIs in terms of removing double taxation hardships. And in the same thread, foreign investors too will benefit from a lower treaty rate.

With regards to affordable housing, the budget has extended the tax holiday on affordable housing projects until 31st March 2022

👉 ETMONEY OPINION

From an investing perspective, the stock markets have taken very well to this budget. The NIFTY has closed over 14,200 points today which is a 4.7% jump over the last trading session.

And this makes perfect sense as the supporting pillars are all there to usher us towards a sustained 7-7.5% GDP growth with :
► Visible infrastructure and manufacturing policy that showcases the government’s willingness to spend
► There is continuity in the taxation policies and whatever little tinkering that has been done is with the rate of customs duty which will boost production further
► An environment of low interest rate and friendly policies will go a long way in attracting foreign and domestic private capital expenditure.

Overall, we found the budget having mass appeal and created with much care to get the country back on track.

#ETMONEY #Budget2021

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