Union Budget 2021

Dr. Mahipal Singh

Rathore

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1 February 2021
 The Build-up
• The continued protest by farmer unions on the three
agriculture-related laws cleared by Parliament in the
last Monsoon Session, had put the pressure on the
government to deliver.

• The Union General Budget provided the best

opportunity.
On 29th January, 2021, Prime Minister Narendra
Modi described the current Budget Session as
an opportunity to fulfil the dreams of freedom
fighters.
To deal with COVID-19 induced lockdowns, several
mini-budget-like packages were announced last year.
The word "Budget" originates from the
French word "bougette“, which means
leather bag.
The Budget 2021
• Nirmala Sitharaman – The first Full Time female
Finance Minster presented the Budget.

• The first budget of the decade – was also a digital

budget.

• The speech lasted for 112 min.

• The last General Budget 2020-21 was presented on 1st

February, 2020.
Rupee comes
in
Rupee goes
out
 Item BE 2020-21 RE 2020-21 BE 2021-22

Expenditure 30.42 lakh crore 34.50 lakh crore 34.83 lakh crore

Capital 4.12 lakh crore 4.39 lakh crore 5.5 lakh crore
Expenditure
Fiscal Deficit 3.5 % 9.5% 6.8%
(as % of GDP)
GST collection in January, 2021, was the
highest recorded, since the inception of GST
 Recap of the Indian Economy in
COVID times
• While the global economy was slowing down,
COVID-19 pushed it to further uncertainty.

• The risk of not having a lockdown was too high.

• The total estimate of all relief measures announced by govt
& RBI so far is ₹27.1 lakh crores.

 13% of GDP.

• India has two COVID-19 vaccines available.

 Two more vaccines will be rolled out soon.

To tackle the COVID-19 induced economic difficulties, the
Government announced a ₹30-lakh-crore plan, through
the following ‘mini-budgets’:

• AtmaNirbhar Bharat programmes

• Performance-linked incentives
• Boost for domestic manufacturing
• Improved credit access for enterprises
• Moratorium on interest payments
• Thrust on affordable housing
• Booster shots for MNREGA
• Within 48 hours of India’s lockdown
declaration, the PM announced Pradhan
Mantri Gareeb Kalyan Yojna.

₹2.76 lakh crores.

1 February 2021
 Theme of the Budget
AtmaNirbhar Bharat and

the sankalp of Nation-first

is planned to be strengthened through

6 pillars in FY22:
1. Health and Wellbeing
2. Physical & Financial Capital, and Infrastructure
3. Inclusive Development for Aspirational India
4. Reinvigorating Human Capital
5. Innovation and R&D
6. Minimum Government and Maximum
Governance
 Healthcare
₹64,180 crores to be spent on a centrally sponsored scheme
‘AtmaNirbhar Swastha Bharat Yojana’ over the next six years:

• Critical care hospital blocks

• Strengthening of National Centre for Disease Control
• Setting up of 17,000 rural and 11,000 urban health and
wellness centres
• Setting up of Integrated Public Health Labs in each district
• ₹ 35,000 crore for COVID-19 Vaccine in the financial
year 2021-22.

• The government will provide more funds, if

required.
• The pneumococcal vaccine is limited to only 5 states
at present.

• Now it will be rolled out across the country.

• Will avert more than 50,000 child deaths annually.

• National Commission for Allied Healthcare Professionals Bill
introduced.

• Will ensure transparent and efficient regulation of 56 allied

healthcare professions.

• National Nursing and Midwifery Commission Bill introduced

• Supplementary Nutrition Programme & POSHAN
Abhiyaan to be merged.

 Mission POSHAN 2.0 to be launched.

• Will strengthen nutritional content, delivery & outcome.

• Intensified strategy for improving nutritional outcomes in

aspirational districts.
• Outlay for health, therefore, increased to ₹2,23,846 crores.

Increase of 137% relative to previous year's

budget.
Jal Jeevan Mission Urban

• Spending of ₹2.87 lakh crores.

• To achieve better health and quality of life, the government
aims to provide universal water supply to 4378 urban
bodies.
• Liquid Waste management in 500 AMRUT cities.
Urban Clean India Mission

• Urban Swachh Bharat 2.0 Mission to be launched, which will

cost ₹1.41 lakh crore over 5 years.

 Fecal sludge management.

 Waste water treatment.
 Management of waste from urban construction.
• To tackle air pollution, the FM announced
₹2217 crores.

Will cover 42 urban centres.

Vehicles to undergo fitness test in automated fitness
centres:

 After 20 years for personal vehicles, and

 After 15 years for commercial vehicles.

 Voluntary vehicle scrapping policy to phase out old and unfit

vehicles.
 Industry
• ₹ 1.97 lakh crores over 5 years starting this FY, for Production
Linked Incentive Schemes.

 This will create global champions in manufacturing.

 Essential for an AatmaNirbhar Bharat.

 Will nurture and create jobs for youth.

• Scheme of Mega Investment Textile Parks to be launched.

 To create world class infra in textile sector, with plug-and-

play facilities.

• 7 textile parks to be set up over 3 years.

 To create global export champions.

 Infrastructure
To give further thrust to National Infrastructure
Pipeline, three concrete actions to be taken:

 Creating institutional structures.

 Monetizing assets.
 Increasing share of capital expenditure in central and state
budgets.
• Professionally managed Development Financial Institution to
be set up.

 Will provide, enable & catalyze infra financing.

 ₹ 20,000 crore to capitalize this institution.

 Aim is to have lending portfolio of at least ₹ 5 lakh crore in 3

years.
• National Monetization Pipeline of potential brownfield
infrastructure assets to be launched.

 Will help in monetizing operating public infra assets.

• Asset Monetization Dashboard to track progress and provide

visibility to investors.
• Five operational roads being transferred to NHAI.

• ₹7,000 crore assets to be transferred to PGCIL.

• Railways to monetize dedicated freight corridor assets for

O&M, after commissioning.

• Next lot of airports to be monetized for operation &

management concessions.
• Sharp increase of 34.5% in capital expenditure.

 Resulted in allocation of ₹ 5.54 lakh crore.

• Shows government’s effort to spend more on

capital expenditure, despite resource crunch.
• ₹ 40,000 crore for programmes, projects and
departments which show good progress in capital
expenditure, if they are in need of further funds .

 More than ₹ 2 lakh crore for states and autonomous

bodies for capex.
 Roads and Highways
• By March 2022, another 8,500 km of road projects
to be awarded.

• 11,000 km of NH corridors to be completed, under

Bharat Mala Pariyojna project.
• ₹ 1,18,101 crore for the Ministry of Road Transport
and Highways.

• Of this, ₹ 1.08 lakh crore is for capital – the highest

ever provided.
• Western Dedicated Freight Corridor and Eastern
Dedicated Freight Corridor to be commissioned by
June 2022.

• Various additional initiatives too being proposed.

• New scheme for augmentation of public bus transport
services.

• Will cost ₹18,000 crore.

• Will facilitate deployment of innovative PPP models

enabling private players to finance, acquire, operate
and maintain over 20,000 buses.
 Railways
• 100% electrification of rail broad gauge routes to be
completed by December 2023.

• High density rail networks and highly utilized rail routes to

be provided with indigenously developed automatic train
protection system.

• This will eliminate train collision due to human error.

• Record sum of ₹ 1,10,055 crore to be
provided for Indian Railways.

• Of this, ₹ 1,07,100 is for capital expenditure

only.
MetroLite and Metro New Technologies to be deployed to
provide metro rail systems in:

 tier 2 cities and

 peripheral areas of tier 1 cities.

**Costs less, but provides same experience, convenience

and safety.
 Ports
• Seven port projects worth more than ₹ 2,000 crore to
be offered by major ports in PPP Mode

• Will move to a model where private partner will

manage operations of ports.
• Scheme for promoting flagging of merchant ships in
India to be launched.

• Subsidy support to Indian shipping companies will be

provided by Ministries and CPSEs - ₹ 1,624 crore over
5 years for this
 Energy
• Framework to be put in place, to provide consumers
alternatives to choose from, from among multiple power
distribution companies.

• Revamped, reforms-based, result-linked Power Distribution

Sector Scheme to be launched, with outlay of ₹ 3,05,984
crore over 5 years.
 Will provide assistance to distribution companies for
infrastructure creation.
• Comprehensive National Hydrogen Energy
Mission to be launched.

• Will help generate hydrogen from green

power sources.
• Ujjwala scheme has benefited 8 crore households, so far.

• It will be extended to cover 1 crore more beneficiaries.

• 100 more districts to be added in next 3 years, to City Gas

Distribution Network.
• Independent Gas Transport System Operator to be
set up.

 This will allow facilitation and coordination of

booking of common gas carrier capacity.
 Cover all natural gas pipelines, on non-
discriminatory and open access basis.
• Additional capital infusion of ₹ 1000 crore to
Solar Energy Corporation of India.

• ₹ 1500 crore to IREDA, to give further boost

to green energy sector.
 Banking and Finance
• Insurance Act 1938 to be amended.

• To increase permissible FDI limit in insurance companies

from 49% to 74%.

• Allow foreign ownership and control with safeguards.

• Asset Reconstruction Company Ltd to be set up.

• It will consolidate and take over existing stressed

debts.

• Also, manage and dispose of assets for eventual

value realization.
• Deposit Insurance Cover for bank customers to be
increased from ₹ 1 lakh to ₹ 5 lakh.

• Provision to be streamlined to enable depositors

get access to funds within insurance cover limit.
Minimum loan size eligible for debt recovery
under SARFAESI Act 2002, to be reduced from
₹ 50 lakh to ₹ 20 lakh.

For NBFCs with minimum asset size of ₹ 100

crore
A single and rationalized Securities Markets Code to
be set up, by consolidating provisions of:

 SEBI Act 1992,

 Depositories Act 1996,
 Securities Contracts Regulation 1956 and
 Govt. Securities Act 2007.
• For investor protection, Investor Charter to be
introduced.

• Permanent institutional framework to set up, to

instill confidence in corporate bond market
participants during times of stress.
• To set up a system of regulated gold
exchanges in the country, SEBI will be
notified as regulator.

• Warehousing Dev. and Regulatory Authority

will be strengthened.
• Two public sector banks apart from IDBI and one general
insurance company to be taken up for strategic
disinvestment in 2021-'22.

• IPO of LIC to be brought in this year.

• Policy on Strategic Disinvestment of Public Sector

Enterprises has been approved.
₹ 1.75 lakh crore is estimated to be the receipts in 2021-'22, by
way of strategic disinvestment.

Previous budget for 2020-21 set a target of raising ₹2.1 lakh

crore
 Companies
• Definition of small companies under Companies Act 2013 to
be revised.

• Companies with paid-up capital up to ₹ 2 crore & turnover

up to ₹ 20 crore will fall under small companies.

• Benefit more than 2 lakh companies in compliance

requirements.
• Promoting start-ups and innovators by incentivizing the
incorporation of One Person Companies (OPCs):
• Allowing Non Resident Indians (NRIs) to incorporate OPCs
in India.

• To further streamline Ease of Doing Business for

cooperatives, a separate administrative structure for them
to be set up .
 Defence
• Ministry of defence has been allocated Rs 4,78,195.62 crore.

• Excluding pensions, it is pegged at Rs 3.62 lakh crore from last

year's Rs 3.37 lakh crore.

• Modernisation fund for the armed forces has gone up from Rs

1,13,734 last year to Rs 1,35,060 crore for the financial year
2021-22.
Agriculture
• Agricultural credit target enhanced to ₹ 16.5 lakh crore.

• Focus will be on ensuring increased credit flow to animal

husbandry, dairy and fisheries sectors.

• Scope of Operation Greens Scheme to be extended from

tomatoes, onions and potatoes to 22 perishable crops.
• Allocation for Rural Infrastructure Development Fund to be
enhanced from ₹ 30,000 crore to ₹ 40,000 crore

• ₹ 5,000 crore Micro Irrigation Fund to be augmented by

another ₹ 5,000 crore.

• 1,000 more mandis to be integrated with National

Agriculture Market or eNAM.
Agricultural Infrastructure Fund to be made
available to APMCs for augmenting their
infrastructure facilities
Dairy & Fisheries
 Labour
• Portal that will collect relevant information on gig workers,
building and construction workers and others to be
launched.

• Will help formulate health, housing, skill, food, credit and

insurance schemes for all migrant workers.
 Education
• More than 15,000 schools to be qualitatively strengthened,
with all components of National Education Policy.

• 100 new ‘Sainik’ schools to be set up.

• Higher Education Commission to be set up.

• Umbrella structure to be created in 9 cities for better
synergy among government supported institutions.

• Central University to be set up in Leh, for providing

accessible higher education in Ladakh.

• ₹ 35,219 crore allocated for 6 years till 2025-26, to provide

post matric scholarship to 4 crore Scheduled Caste students.
• Unit cost for setting up 750 Eklavya Model
Residential Schools in tribal areas, increased from ₹
20 crore per school to ₹ 38 crore.

• ₹ 48 crore per school in hilly and difficult areas.

• National Research Foundation outlay will be ₹ 50,000 crore
over 5 years.

• Will ensure strengthening of research ecosystem, with focus

on identified national priority thrust areas.

• National Language Translation Mission to be launched.

• Rs. 3,768 crore allocated for first digital census in the
history of India
• Rs. 300 crore grant to the Government of Goa for the
diamond jubilee celebrations of the state’s liberation from
Portuguese
• Rs. 1,000 crore for the welfare of Tea workers especially
women and their children in Assam and West Bengal
through a special scheme
 Science
• Deep Ocean Mission with outlay of more than ₹ 4,000 crore
over 5 years, to be launched.

 Will help in deep ocean exploration and ocean biodiversity

conversation.

• NewSpace India Limited will execute PSLV-C51 launch.

First unmanned launch of space flight
'Gaganyaan' slated for December 2021.
 THANK YOU
Dr. Mahipal Singh Rathore

mahipalrathore
mahipalrathore
mahipalrathore
mahipalrathore (Telegram channel for PDF)