Union Budget 2021 just got announced in India on 1st February by Finance Minister Nirmala Sitharaman in Parliament. The budget carries major section devoted to the healthcare sector which has been appreciated. Apart from it sectors like taxation process, startups, digital mode of payment, transportation, infrastructure development and push to textile industry are kept in focus by the administration.
After releasing the budget, Prime Minister Narendra Modi while addressing the nation said that the budget speaks of “all-round development”. He added, “From Covid reforms to Atmanirbhar resolve we moved ahead with this mantra in the Budget 2021. It is an active budget and not the reactive one.” He congratulates the Finance Ministry team to introduce its second budget under the National Democratic Alliance (NDA) administration led by the Prime Minster Narendra Modi.
Highlights of the Budget 2021
- Rs 35,000 crore for Covid-19 vaccine.
- Rs 95,000 crore for road development in Bengal.
- Centre to provide Rs 18,000 crore for public buses.
- Rs 1,000 crore to solar energy corporation and Rs 1,500 to a renewable energy development agency.
- Tax holiday for start-ups increased by one more year, till March 31, 2022.
- NRIs allowed to operate One person Companies in India.
- Customs duty on some auto parts raised to 15 percent.
- Rs 1.5 lakh deduction on payment of interest for affordable housing extended by 1 year.
- Rs 18,000 crore scheme to augment public transport in urban areas.
- Rs 1,500 crore for promoting a digital mode of payment.
- Special scheme for the welfare of women and children in Assam and West Bengal. Rs 1,000 crore for Bengal, Assam tea workers.
- Elderly exempted for filing tax.
Economist Amit Singh gave his views about the Budget 2021. He said, “It is a good budget overall, if I have to rate it, it will be 7 out of 10. Since this budget is mainly for the revival of the business sectors, there is nothing major for the middle class or the low-income class groups. The budget mainly focused on health & well-being, infrastructure development, inclusive development, reinvigorating human capital, innovation & R&D and lastly minimum government and maximum governance.”
The healthcare sector got huge amount of 2 lakh crore. During the pandemic situation, spending the correct amount was needed. “It is very important for a country like India, since the pandemic has opened our eyes regarding our health infrastructure and necessities. The health care sector has seen a whopping jump of 137% if we compare to the last time, and additionally allocating INR 35000 crore for corona vaccination. This clearly shows that the government is keen on improving the health sector and showing the world that they are not behind any other developed nations. If we see India is the biggest vaccine supplier and wants to hold that position firm and also India is providing basic medical amenities to its neighbors and other nations”, said Amit.
Apart from healthcare sector, administration also focused on public transportation. According to Amit, “Yes absolutely, the government is very keen on promoting public transportation in urban as well as rural areas for inter state travels or be it intra-state travels. The scheme to support augmentation of public bus transport service at the cost of 18,000 crores. The scheme will facilitate deployment of innovative PPP models to enable private sector players to finance, acquire, operate and maintain over 20,000 buses.”
The budget also included special scheme for the welfare of women and children in Assam and West Bengal and the particular amount for tea workers there. Then the road development in Bengal, and all these considerations are happening when both the states are preparing for the upcoming elections, which can also be one of the reasons. “Yes, the West Bengal election will be one of the toughest tests for the current central administration(Bharatiya Janata Party), as they aim to win the state where they have not before. These policies were introduced but at the end it’s the state administration which will tend to execute and seeing the current administration ruling the state it tends to refuse several policy initiatives taken by the central government. The election will be a pivotal point for sure”, said Amit.
His opinion on Fiscal deficit of 2021-22 at 6.8% of GDP is that it was expected due to the increase in expenses during this pandemic and is highly appreciable. He said, “The government is spending more than what it is receiving. In a recent figure published by RBI, the current administration has given financial relief packages during this pandemic to be 13% of the GDP which is a huge number. Even several developed nations have not shed this much money on their economy. But in the coming years we will tend to see a slight drop in the fiscal deficit once the economy gets back in its pre-pandemic shape.”
He also mentioned about the digital mode of payment that has been planned to be encouraged more. He quoted Eat News, “It’s clear that the administration wants to increase its digital footprint even to remote areas. As this pandemic has taught us how to work form home. Study from home and others. This initiative will definitely provide easy, fast and minimal paperwork loans should come under scrutiny of the administration. During the pandemic several people have taken these types of loans to keep their business and house running but these also come in return with high interest rates which are way above the Reserve Bank of India rates.“
The budget is declared overall good but the military sector was not given satisfying amount when the situation at borders is not stable, to which Amit described, “According to the 2021-22 budget documents presented by the Finance Minister, the budget has been increased to INR 4.78 lakh crore from INR 4.71 lakh crore of last year. This shows that the administration is ready to tackle any difficulty at this moment. Also the incoming of Rafael fighter Jets in the Air Force squadron is a plus point at this moment.“
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