Finance Minister Nirmala Sitharaman announces a slew of allocations, including revising capital expenditure by 34.5% to Rs 5.54 lakh crore, as she presents her third budget in Lok Sabha. The Finance Minister announces a 137% hike in the health and wellness budget, while introducing an agriculture infrastructure and development cess on a host of items, including gold and silver dore bars, alcoholic beverages, palm oil, apples, and petrol and diesel. The Finance Minister also announces an extension of tax breaks for affordable housing, but refrains from making any changes to personal income tax slabs or providing any new exemptions to taxpayers.
After a Covid hit year, six pillars of health, physical and financial capital and infrastructure, inclusive development, human capital, innovation and minimum government and maximum governance have been identified as the cornerstones to build a new economy in a New India.
Presenting the Union Budget 2021-22 on Monday, Finance Minister Nirmala Sitharaman said that the Budget rests on these six pillars.
There is a substantial increase in investment in health infrastructure and the Budget outlay for health and wellbeing is Rs 2.23 lakh crore, as against this year’s budget estimates of Rs 94,452 crore, an increase of 137 per cent.
The Finance Minister announced that a new centrally sponsored scheme, ‘PM AatmaNirbhar Swasth Bharat Yojana’, will be launched with an outlay of about Rs 64,180 crore over six years.
For vaccines, there is a provision of Rs 35,000 crore. The pneumococcal vaccine, a Made in India product presently limited to just five states, will be rolled out across the country, aimed at averting 50,000 child deaths annually.
The Budget also puts emphasis on universal coverage of water supply and the Swachh Bharat Mission.
The Finance Minister announced that the Jal Jeevan Mission (Urban) will be launched for universal water supply in all the 4,378 urban local bodies with 2.86 crore household tap connections, as well as liquid waste management in 500 AMRUT cities.
It will be implemented over five years with an outlay of Rs 2.87 lakh crore. Moreover, the urban Swachh Bharat Mission will be implemented with a total financial allocation of Rs 1.41 lakh crore over a period of five years from 2021-2026.
The second pillar of physical and financial capital and infrastructure has several key areas, including the Aatmanirbhar Bharat-Production Linked Incentive Scheme.
Sitharaman said that to boost manufacturing, PLI schemes for an Aatmanirbhar Bharat have been announced for 13 sectors. For this, the government has committed nearly Rs 1.97 lakh crore in the next five years starting FY 2021-22. This initiative will help bring scale and size in key sectors, create and nurture global champions and provide jobs to the youth.
For textiles, to enable the textile industry to become globally competitive, attract large investments and boost employment generation, a scheme of Mega Investment Textiles Parks will be launched in addition to the PLI schemes. This will create world-class infrastructure with plug and play facilities to enable to create global champions in exports. As part of this scheme, seven textile parks will be established over three years.
Sitharaman said that infrastructure needs long term debt financing. A professionally managed ‘Development Financial Institution’ (DFI) is necessary to act as a provider, enabler and catalyst for infrastructure financing. Accordingly, a Bill to set up a DFI will be introduced. The government has provided a sum of Rs 20,000 crore to capitalise this institution and the ambition is to have a lending portfolio of at least Rs 5 lakh crore for this DFI in three years’ time.
Sitharaman also provided an enhanced outlay of Rs 1.18 lakh crore for the Ministry of Road Transport and Highways, of which Rs 1.08 lakh crore is for capital, the highest ever.
Expressing serious concern over the viability of distribution companies, the Finance Minister proposed to launch a revamped reforms-based result-linked power distribution sector scheme with an outlay of Rs 3.05 lakh crore over five years. The scheme will provide assistance to DISCOMS for infrastructure creation, including pre-paid smart metering and feeder separation, upgradation of systems etc.
For financial capital, Sitharaman proposed to consolidate the provisions of SEBI Act, 1992, Depositories Act, 1996, Securities Contracts (Regulation) Act, 1956 and Government Securities Act, 2007 into a rationalised single Securities Markets Code.
In a major move for FDI, she also proposed to amend the Insurance Act, 1938 to increase the permissible FDI limit from 49 per cent to 74 per cent and allow foreign ownership and control with safeguards. Under the new structure, the majority of directors on the board and key management persons would be resident Indians, with at least 50 per cent of directors being independent directors, and specified percentage of profits being retained as general reserve.
On disinvestment, the Finance Minister said a number of transactions namely BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans and NeelachalIspat Nigam Limited, among others, would be completed in 2021-22. Other than IDBI Bank, the government proposes to take up the privatisation of two public sector banks and one general insurance company in 2021-22.
In 2021-22, the government would also bring the IPO of LIC for which requisite amendments will be made in the Budget Session itself.
Under the pillar of Inclusive Development for Aspirational India, the Finance Minister announced to cover agriculture and allied sectors, farmers’ welfare and rural India, migrant workers and labour, and financial inclusion.
To provide adequate credit to the farmers, the government has enhanced the agricultural credit target to Rs 16.5 lakh crore in FY22. Similarly, the allocation to the Rural Infrastructure Development Fund has been increased from Rs 30,000 crore to Rs 40,000 crore.
The Finance Minister said that more than 15,000 schools will be qualitatively strengthened to include all components of the National Education Policy.
On the pillar of innovation and R&D, the Finance Minister said that in her Budget speech of 2019, she had announced the National Research Foundation and added that the NRF outlay will be of Rs 50,000 crore over five years. It will ensure that the overall research ecosystem of the country is strengthened with a focus on the identified national thrust areas.
On minimum government, maximum governance, the Finance Minister proposed to take a number of steps to bring reforms in the tribunals for the speedy delivery of justice besides proposing to take further measures to rationalised the functioning of the tribunals. (IANS)