Key takeaways from Budget 2021
2021 FEB 5
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IN NEWS:
- The Union budget for 2021 was presented in the Parliament by the Finance Minister.
KEY TAKEAWAYS:
- Thrust on spending:
- To overcome the COVID-19 crisis, the government proposes to increase its spending and raise the productive capacity of the economy. For this, the Capital Expenditure of government has been hiked by 34.46% to Rs 5.54 lakh crore in 2021-22.
- Promote Investment:
- A National Monetisation Pipeline of potential brownfield infrastructure assets will be launched. An asset monetisation dashboard will also be created for tracking progress and to provide visibility to investors.
- FDI in insurance sector will be hiked to 74% from the existing 49%. There will also be Initial Public Offering for LIC.
- Fiscal deficit projections:
- Fiscal deficit is estimated to be at 6.8% of GDP in 2021-22. It will be brought down to 4.5 per cent of GDP by 2025-26.
- Healthcare: Finance Minister announced Rs 2,23,846 crore outlay for health and wellbeing, which is 137% higher than the allocation in 2020-21. Out of this:
- An outlay of about Rs 64,180 crore over six years is provided for a new centrally sponsored scheme, the PM Aatmanirbhar Swasth Bharat Yojana.
- Rs 35,000 crore was allocated for COVID-19 vaccination drive in BE 2021-22.
- Rs 2,217 crore to tackle air pollution for 42 urban centres with a million-plus population.
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PM Aatmanirbhar Swasth Bharat Yojana:
The scheme will develop capacities of primary, secondary, and tertiary care health systems, strengthen existing national institutions, and create new institutions to cater to detection and cure of new and emerging diseases. The main interventions under the scheme would be:
- Support for 17,788 rural and 11,024 urban health and wellness centres
- Setting up integrated public health labs in all districts and 3,382 block public health units in 11 states
- Establishing critical care hospital blocks in 602 districts and 12 central institutions.
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- Banking sector:
- Government has decided to set up a bad bank that will take over the bad loans of banks and thus provide flexibility to finance the economic recovery.
- Development Finance Institutions (DFI): Government will set up a Rs 20,000 crore Development Finance Institution (DFI) to fund the ambitious Rs 111 lakh crore national infrastructure pipeline. DFI aims to have a lending portfolio of at least Rs 5 lakh crore in three years.
- More reforms:
- Disinvestment of state-owned firms such as BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans and Neelachal Ispat Nigam limited, among others, would be completed in 2021-22
- Two public-sector banks and one state-owned general insurance company will be lined up for disinvestment.
- NITI Aayog has been asked to short list non-core PSUs for strategic sale. the government has estimated disinvestment receipts at Rs 1,75,000 crore.
- Housing:
- With focus on affordable housing, the budget extended the benefit of additional Rs 1.5 lakh tax deduction on home loan interest, until March 31, 2022. It will act as a further impetus to the residential property sector.
- Voluntary vehicle scrapping policy to phase out old and unfit vehicles post fitness tests for private vehicles after 20 years and commercial vehicles after 15 years.
- Agriculture: In the farm sector, the Centre has enhanced the agricultural credit target to Rs 16.5 lakh crore in FY22.
- Extension of Ujjwala: In the petroleum and gas sector, the Ujjwala Scheme, which has benefited 8 crore households, will be extended to cover 1 crore more beneficiaries, and 100 more districts will be added in the next three years to the city gas distribution network.
PRACTICE QUESTION:
Q. Examine how the recent budget seeks to revive the Indian economy from the impact of COVID-19 pandemic?
