A budget built on 'six pillars'

Major allocations in the Union Budget 2021-22 has focused on six pillars.


Image source: Indiabudget.gov.in

By Ram Rakshith and Vedika Mane

Bengaluru: Finance Minister Nirmala Sitharaman unveiled the Union Budget 2021-22 on February 1 and it has come at a time when the country is reeling under an economic crisis owing to the COVID-19 pandemic. This was her third budget since she assumed office in 2019.

The budget has focused on six pillars including health and well-being; physical, financial capital and infrastructure; inclusive development for aspirational India; reinvigorating human capital; innovation, research and development; and minimum government and maximum governance.

The Finance Minister has announced a special package of Rs 27.1 lakh crore to deal with the pandemic under the Aatmanirbhar Bharat package. She has proposed the introduction of the Aatmanirbhar health programme with an outlay of Rs 64,180 crore.

“This programme will develop capacities of primary, secondary, and tertiary care health systems, strengthen existing national institutions and create better institutions, to cater to detection and cure of new and emerging diseases. This will be in addition to the National Health Mission,” according to Ms Sitharaman. She has announced Rs 2.23 lakh crore for healthcare, a 137 percent increase compared to the previous budget. In addition to this, Rs 35,000 crore has been allocated for COVID-19 vaccines.

With an eye on the upcoming Legislative Assembly polls in Kerala, Tamil Nadu, Assam, and West Bengal, Ms Sitharaman has allocated special funds for the roads and highways development projects in the four States. She has allotted Rs 65,000 crore for road and highway projects in Kerala, Rs 1.03 lakh crore for Tamil Nadu, Rs 25,000 crore for West Bengal, and Rs 3,400 crore for road infrastructure development in Assam. To further augment road infrastructure, 8,500 km of road projects and an additional 11,000 km of national highway corridors will be completed by March 2022.

“I have provided an enhanced outlay of Rs 1,18,101 crore for the Ministry of Road Transport and Highways, of which, Rs 1,08,230 crore is capital expenditure – the highest ever provided,” said the Finance Minister in her budget speech.

Amid the ongoing farm crisis, the government is increasing the credit target to Rs 16.5 lakh crore. “Our government is committed to the welfare of farmers. The Minimum Support Price (MSP) regime has changed to assure a price that is at least 1.5 times the cost of production across all commodities,” Ms Sitharaman said.

Presenting a budget, said to be ‘like never before’, Ms Sitharaman has announced a simpler method of income tax return filing wherein, details of capital gains, dividend income, and interest income will be pre-filled in the returns. “We shall reduce the compliance burden for senior citizens who are 75 years and above, and they will not have to file income tax returns,” she added.

The Education and Job sector have also been highlighted in the budget in which revamping scholarship schemes for the SC/STs; allocation of Rs 50,000 crore for research; and setting up a central university in Leh were the key inclusions. To incentivise the startups, the tax holiday for these businesses has been extended to March 2022. The budget has earmarked Rs 15,700 crore for the Ministry of Micro, Small and Medium Enterprises (MSME).

Benchmark stock indices, Nifty and Sensex, gave a thumbs up to the government’s expansionary budget as the Finance Minister chose the path of additional borrowing instead of taxing the super-rich.

Other announcements made in the budget include a push to the textile industry; a hike in customs duty on cotton and raw silk; a new agriculture development cess of Rs 2.5 a litre on petrol and Rs 4 a litre on diesel; a new vehicle scrapping policy to provide a boost for the automobile sector; and Rs 1.1 lakh crore for Indian Railways.

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