Budget speech 2021-2022

Finance minister Nirmala Sitharaman has presented a pandemic budget in the hardest times of Indian economy. Post unlock phases the Indian economy technically in recession. The economy contracted 23% attributed to poor consumer spending, public expenditure, unemployment etc. However, according to govt. the economy has recovered what is called ‘V’ shape recovery. Yet the challenges lie ahead. The pandemic exposed the suffering of poor, hunger, health infrastructure and income inequalities etc. In such scenario, the budget is expected to stimulate the economy to usher a prosperous growth.

Union Budget 2021: After IDFC, ICICI and IDBI's conversion into banks, govt  proposes new DFI

In her initial words of budget speech, the FM lauded the PM saying that within 48 hours of declaring a three-week-long complete lockdown, the Prime Minister announced the Pradhan Mantri Garib Kalyan Yojana, valued at `2.76 lakh crores – this provided, free food grain to 800 million people, free cooking gas for 80 million families for months, and cash directly to over 400 million farmers, women, elderly, the poor and the needy. In the 2020 Global Hunger Index, India ranks 94th out of the 107 countries. With a score of 27.2, India has a level of hunger that is serious. Further, the Global Nutrition Report 2020 says that India is among 88 countries that are likely to miss the global nutrition target by 2025. The hungriness in india had only deteriorated despite ever since lockdown imposed. Read here the terms and constitutional provisions of budget.

This is the first budget of the decade and also the digital budget. The Budget proposals for 2021-2022 rest on 6 pillars.

  • Health and Wellbeing
  • Physical & Financial Capital, and Infrastructure
  • Inclusive Development for Aspirational India
  • Reinvigorating Human Capital
  • Innovation and R&D
  • Minimum Government and Maximum Governance

Health and wellBeing

India’s health expenditure has never been more than the 2% of GDP. This was clearly exposed by the pandemic. In the budget she presented a new centrally sponsored scheme, PM Atma Nirbhar Swasth Bharat Yojana, will be launched with an outlay of about ` 64,180 crores over 6 years. This 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. some take aways are

  • Setting up integrated public health labs in all districts and 3382 block public health units in 11 states;Establishing critical care hospital blocks in 602 districts and 12 central institutions; Strengthening of the National Centre for Disease Control (NCDC), its 5 regional branches and 20 metropolitan health surveillance units;
  • merging the Supplementary Nutrition Programme and the Poshan Abhiyan and launch the Mission Poshan 2.0. Adopt an intensified strategy to improve nutritional outcomes across 112 Aspirational Districts.
  • The Jal Jeevan Mission (Urban), will be launched. It aims at universal water supply in all 4,378 Urban Local Bodies with 2.86 crores household tap connections, as well as liquid waste management in 500 AMRUT cities. It will be implemented over 5 years, with an outlay of `2,87,000 crores.
  • a voluntary vehicle scrapping policy, to phase out old and unfit vehicles. Clean air, tap water, Urban Swachh Bharat Mission 2.0 will be implemented with a total financial allocation of `1,41,678 crores over a period of 5 years from 2021-2026.

Physical & Financial Capital, and Infrastructure

Aiming for a USD 5 trillion economy, our manufacturing sector has to grow in double digits on a sustained basis. Our manufacturing companies need to become an integral part of global supply chains, possess core competence and cutting-edge technology. The proposals include

  • AtmaNirbhar Bharat – Production Linked Incentive scheme (PLI) with an outlay of 1.97 lakh crores, over 5 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 our youth.
  • a scheme of Mega Investment Textiles Parks (MITRA) to create world class infrastructure with plug and play facilities to enable create global champions in exports. 7 Textile Parks will be established over 3 years
  • National Infrastructure Pipeline (NIP), Infrastructure financing – Development Financial Institution (DFI) with 20,000 crores to capitalise this institution. The ambition is to have a lending portfolio of at least 5 lakh crores for this DFI in three years time.
  • Roads and Highways Infrastructure : More than 13,000 km length of roads, at a cost of 3.3 lakh crores, has already been awarded under the 5.35 lakh crores Bharatmala Pariyojana project (3,800 kms have been constructed). By March 2022, another 8,500 kms and complete an additional 11,000 kms of national highway corridors.
  • Indian Railways have prepared a National Rail Plan for India – 2030. The Plan is to create a ‘future ready’ Railway system by 2030. Bringing down the logistic costs for our industry is at the core of our strategy to enable ‘Make in India’. Western Dedicated Freight Corridor (DFC) and Eastern DFC will be commissioned by June 2022.
  • A revamped reforms-based result-linked power distribution sector scheme will be launched with an outlay of `3,05,984 crores over 5 years to DISCOMS for Infrastructure creation including pre-paid smart metering and feeder separation, upgradation of systems, etc., tied to financial improvements.
  • Consolidation of the provisions of SEBI Act, 1992, Depositories Act, 1996, Securities Contracts (Regulation) Act, 1956 and Government Securities Act, 2007 into a rationalized single Securities Markets Code.
  • Amendment the Insurance Act, 1938 to increase the permissible FDI limit from 49% to 74% in Insurance Companies and allow foreign ownership and control with safeguards.
  • To further consolidate the financial capacity of PSBs, further recapitalization of `20,000 crores is proposed in 2021-22.
  • Recommendation of the Fifteenth Finance Commission have undertaken a detailed exercise to rationalise and bring down the number of Centrally Sponsored Schemes.
  • The decriminalizing of the procedural & technical compoundable offences under the Companies Act, 2013, propose to next take up decriminalization of the Limited Liability Partnership (LLP) Act, 2008, revise the definition under the Companies Act, 2013 for Small Companies by increasing their thresholds for Paid up capital from “not exceeding 50 Lakh” to “not exceeding 22 Crore” and turnover from “not exceeding 2 Crore” to “not exceeding 20 Crore”.
  • Strategic disinvestment. A number of transactions namely BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam limited among others would be completed in 2021-22.
  • Recommendation of the Fifteenth Finance Commission,to be undertaken a detailed exercise to rationalise and bring down the number of Centrally Sponsored Schemes

Inclusive Development for Aspirational India

  • In case of wheat, the total amount paid to farmers in 2013-2014 was 33,874 crores. In 2019-2020 it was 62,802 crores, and even better, in 2020-2021, this amount, paid to farmers, was `75,060 crores. The number of wheat growing farmers that were benefited increased in 2020-21 to 43.36 lakhs as compared to 35.57 lakhs in 2019-20.
  • For paddy, the amount paid in 2013-14 was 63,928 crores. In 2019- 2020 this increased 11,41,930 crores. Even better, in 2020-2021, this is further estimated to increase to `172,752 crores. The number of farmers benefitted increased from 1.24 crores in 2019-20 to 1.54 crores in 2020-21.
  • In the same vein, in case of pulses, the amount paid in 2013-2014 was 236 crores. In 2019-20 it increased 8,285 crores. Now, in 2020-2021, it is at `10,530 crores, a more than 40 times increase from 2013-14.
  • SWAMITVA Scheme. Under this, a record of rights is being given to property owners in villages. Up till now, about 1.80 lakh property-owners in 1,241 villages have been provided cards. I now propose during FY 21-22 to extend this to cover all states/UTs.
  • To boost value addition in agriculture and allied products and their exports, the scope of ‘Operation Green Scheme’ that is presently applicable to tomatoes, onions, and potatoes, will be enlarged to include 22 perishable products.
  • proposal for substantial investments in the development of modern fishing harbours and fish landing centres. To start with, 5 major fishing harbours – Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat – will be developed as hubs of economic activity.
  • Efforts towards the unorganised labour force migrant workers particularly, I propose to launch a portal that will collect relevant information on gig, building, and construction-workers among others. This will help formulate Health, Housing, Skill, Insurance, Credit, and food schemes for migrant workers.

Reinvigorating Human Capital

  • Setting-up of Higher Education Commission of India. We would be introducing Legislation this year to implement the same. It will be an umbrella body having 4 separate vehicles for standard-setting, accreditation, regulation, and funding.
  • Proposal to set up a Central University in Leh.
  • establishing 750 Eklavya model residential schools in our tribal areas. Increase the unit cost of each such school from 20 crores to 38 crores, and for hilly and difficult areas, to `48 crores. This would help in creating robust infrastructure facilities for our tribal students.
  • We have revamped the Post Matric Scholarship Scheme, for the welfare of Scheduled Castes. allotted ` 35,219 crores for 6 years till 2025-2026, to benefit 4 crores SC students.

Innovation and R&D

  • National Research Foundation(NRF), worked out the modalities and the NRF outlay will be of `50,000 crores, over 5 years. It will ensure that the overall research ecosystem of the country is strengthened with focus on identified national-priority thrust areas.
  • National Language Translation Mission (NTLM). This will enable the wealth of governance-and-policy related knowledge on the Internet being made available in major Indian languages.
  • As part of the Gaganyaan mission activities, four Indian astronauts are being trained on Generic Space Flight aspects, in Russia. The first unmanned launch is slated for December 2021.
  •  Deep Ocean Mission with a budget outlay of more than 4,000 crores, over five years is launched. This Mission will cover deep ocean survey exploration and projects for the conservation of deep-sea biodiversity.

Minimum Government, Maximum Governance

  • Some extra measures added to the last few years efforts to reform in Tribunals for the speedy delivery of justice.
  • To bring about transparency, efficiency and governance reforms in the nursing profession, The National Nursing and Midwifery Commission Bill will be introduced by the government for passing.
  • As a measure of promoting ease of doing business, a Conciliation Mechanism and mandate its use for quick resolution of contractual disputes is decided to set up. This may instil confidence in private investors and contractors.
  • The forthcoming Census could be the first digital census in the history of India. For this monumental task, 3,768 crores have allocated in the year 2021-2022.
  •  For the welfare of Tea workers, especially women and their children in Assam and West Bengal, budget provides 1,000 crores.

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