Governance & Social Justice
- Union Budget 2021 – What is Asset Reconstruction Company or Bad Bank?
- RBI’s Revised Regulatory Framework for NBFC – RBI proposed 4 Tier Structure of NBFCs
- What is Financial Inclusion? What are the last mile challenges of Financial Inclusion?
- Union Budget 2021 – Is the Government selling everything? What are privatisation plans of Government?
- Sugarcane Farmers in Uttar Pradesh – What are the problems faced by UP sugarcane farmers?
- Union Budget 2021 – Urban Mobility Policy announced by Finance Minister in Union Budget 2021
- India’s first Geothermal Energy Project in Ladakh – ONGC signs MoU with Ladakh Government
- Four Day Work Week Model proposed by Centre – What are the terms & conditions for 4 Day Work Week?
- Liberalisation, Privatisation,and Globalisation – 30 years of LPG reforms – How India has changed?
- Boeing 777 Grounding explained – Pratt and Whitney engine failure incidents – Impact on Air India?
- Union Budget 2021 – Know about 5 Major Problems in Union Budget 2021
Defence & Security
Science & Technology
- Google and Facebook vs Australia – Government wants tech giants to pay News Outlets for content
- Bitcoin price hits all time high – Elon Musk’s Tesla invests $1.5 billion in digital currency
- Genetically Modified Crop explained – What are the PROS & CONS of GM Crop
- Role of Technology in Law Enforcement – How technology is a force multiplier for Law Enforcement?
- What is Hydrogen Economy? How India is planning to run cars on hydrogen?
- Solid Waste Management – Types, Methods, Challenges & Solutions for Solid Waste Management
- Status of Climate Finance in 2020 – Why 2020 is declared as Year of Green Wave
- What is Green Tax and New Scrappage Policy? How they complement each other? Will they succeed?
- What is Land Degradation? Causes & effects of Land Degradation – Sustainable management of Land
- Vulture Conservation in India – Causes and consequences of decline in Vulture population
- What is Ozone Depletion? Facts, causes and effects of Ozone Depletion explained
- What is Eutrophication? Types, Causes and Effects of Eutrophication explained
- GS 3 || Economy || Public Finance || Budget
Why in the news?
Recently govt. has announced the budget, there are many aspects of budget that we need to know properly. The budget gave major emphasis to healthcare and infra sectors. Besides, a host of substantial announcements were made on the divestment front, including the coming IPO of Life Insurance Corporation.
Highlight of the budget:
- Fiscal deficit:
- Sitharaman pegged FY21 fiscal deficit at 9.5% of GDP, with FY22 fiscal deficit target at 6.8% of GDP. Hope to get to back to fiscal consolidation path by FY26.
- Fiscal deficit will reach below 4.5% by FY26. FY22 gross expenditure seen at Rs 34.83 lakh crore.
- Capital expenditure:
- FY22 capital expenditure provided is up 34.5% (vs FY21 BE) at Rs 5.54 lakh crore, said the Finance Minister.
- Rs 44,000 crore under capital expenditure will be given to Department of Economic Affairs in FY22, she added. FY21 capital expenditure is seen at Rs 4.39 lakh crore.
- No tax change:
- The government has left direct taxes unchanged, but took steps in direct tax incentives to ease compliance for taxpayers.
- The FM proposed making it so that advance tax liability on dividend income shall arise only after payment of dividend.
- The Budget also looked at pre-filled tax forms with respect to details like salary income, tax payment and TDS.
- Relief for seniors, small taxpayers:
- No tax filing for seniors above 75 with only pension, interest income. A dispute resolution committee for small taxpayers is being planned.
- Anyone with taxable income of up to Rs 50 lakh, disputed income of up to Rs 10 lakh eligible to approach dispute resolution committee.
- Faceless resolution:
- The Budget proposes setting up faceless dispute resolution committee for individual tax payers, making Income Tax Appellate Tribunal faceless, and constituting the dispute resolution committee for small taxpayers.
- Atmanirbhar Bharat:
- The FM outlined six pillars of proposals to strengthen the vision of Atmanirbharta, namely health and wellbeing, capital and infrastructure, inclusive development, reinvigorating human capital, innovation and R&D and minimum government and maximum governance.
- Shot in the arm for Healthcare:
- The allocation to healthcare in this budget has been increased substantially. The areas of focus will be preventive and curative healthcare as well as well-being, FM said.
- The allocation is likely to be around Rs 2,23,846 crore, a 137% percentage rise from the previous budget. Rs 35,000 cr has been budgeted for COVID-19 vaccination expenditure in FY22.
- Divestment target:
- The Govt sees FY22 fiscal deficit at 6.8%, according to the FM, while she had pegged deficit at 3.5% for FY21 in the last Budget.
- Govt aims to get Rs 1.75 lakh crore through divestments in 2021-22, according to Budget documents. In FY21, it planned to raise Rs 2.1 lakh crore through divestments, falling short
- Big borrowing:
- Sitharaman said govt will borrow Rs 80,000 crore in the remaining two months to meet FY21 expenditure, and is projected to borrow about Rs 12 lakh crore in FY22.
- LIC IPO:
- The FM announced plans to privatise 2 PSU banks and one general insurance company in FY22. The Govt will bring the long-awaited LIC IPO in FY22, adding that it plans to complete the divestments of BPCL, CONCOR and SCI in 2021-22
- Banking and companies:
- The Govt plans to allot Rs 20,000 crore for bank recapitalisation of PSBs.
- The FM also proposed to revise definition under Companies Act, 2013 for small companies by increasing their threshold for capitalisation.
- Minimum Wages:
- Minimum wages will now apply to all categories of workers and women will be allowed to work in all categories with adequate protection.
- Cell Phone parts
- The government has raised basic customs duty on import of sub-parts of mobile phones and battery chargers from nil to 2.5% in FY21-22.
- The price impact will be known once the details are clear.
- Agricultural Credit
- The Budget set agriculture credit target of Rs 16.5 lakh crore for FY22, and will further increase provision to rural infra development fund to Rs 40,000 crore from earlier Rs 30,000 crore.
- FM said the govt is committed to welfare of farmers, pointing at how 1.54 crore farmers benefited from MSP in paddy and wheat in FY21.
- Furthermore, underlined that Rs 75,060 crore was paid to farmers for wheat in FY21 versus Rs 62,802 crore in FY20.
- One-Nation, One-Ration card:
- 69 crore beneficiaries (86% beneficiaries) were covered under the One-Nation, One-Ration card implemented by 32 states and union territories.
- One-person companies:
- The govt plans to allow incorporation of one-person companies with no restriction on paid-up capital and turnover.
- Non-resident Indians will also be allowed to incorporate one-person companies in India, the FM added.
- Revised customs duty structure:
- Propose to review more than 400 old exemptions to customs duty, and from October 1 will put in place a revised customs duty structure free of any distortion, the FM said. Govt plans on reducing customs duty uniformly to 7.5% on products of non-alloy, alloy and stainless steel, exempting duty on steel scrap till March 2022.
- The FM added that to provide relief to copper recyclers, the govt will be reducing duty on copper scrap from 5% to 2.5%
More initiatives in detail:
Digital push under the National Education Policy:
- A National Digital Educational Architecture (‘NDEAR’) will be set up as a Digital First Mindset.
- Digital Architecture will support teaching and learning activities.
- The digital architecture will also support the educational planning, governance, and administrative activities of the Centre and the States/ Union Territories.
- It will provide a diverse education eco-system architecture for the development of digital infrastructure, a federated but interoperable system that will ensure the autonomy of all stakeholders, especially States and UTs.
- To enable increased access to resources, online modules covering the entire gamut of adult education will be introduced.
- Sectors Impacted:
- Technology; Startups; Education
Steps to harness technology for good governance and administration:
- NCLT framework will be strengthened by implementing an e-Courts system, and alternative methods of debt resolution. Additionally, a special framework for MSMEs shall be introduced. These measures will ensure faster resolution of cases.
- The launch of data analytics, artificial intelligence, machine learning-driven MCA21 Version 3.0 will be seen in this fiscal year. This Version 3.0 will have additional modules for e-scrutiny, e-Adjudication, e-Consultation, and Compliance Management.
- The forthcoming Census could be the first digital census in India’s history, for which INR. 3,768 crores have been allocated for 2021-2022
- Faceless Income Tax Appellate Tribunal: Faceless assessment for income tax is already being implemented. The next step is to have a faceless appellate center. Electronic communications will be adopted for general communications. Video conferencing will be available for personal hearings.
- Sector impacted:
- Technology; MSMEs; Good governance
Atmanirbhar Swasth Bharat Yojana:
- A new centrally sponsored scheme, PM Atmanirbhar Swasth Bharat Yojana, will be launched with an outlay of INR. 64,180 crores over six years.
- One of the main interventions under this scheme is the setting up of a national institution for One Health, a Regional Research Platform for WHO South-East Asia Region, 9 Bio-Safety Level III laboratories, and 4 regional National Institutes for Virology
Indirect Tax Proposals (GST):
- Focus on custom duty rationalization to promote domestic manufacturing and export better, the thrust now being on easy access to raw materials. To this end, a review of more than 400 old exemptions will take place this year.
- For greater domestic value addition, the electronic and mobile phone industry will see the withdrawal of exemptions on some parts of mobiles and chargers. Additionally, some parts of mobiles will move from nil rate to moderate rate 2.5%.
- To support MSMEs’ products the following measures have been proposed:
- The duty on steel screws and plastic builder wares is being increased from 10% to 15%.
- The duty on prawn feed is being increased from 5% to 15%.
Roads and Highways infrastructure:
- Construction of another 8500kms of roads and 11,000kms of highway corridors.
- The focus areas for the highway corridors are:
- 3500 kms to be built in Tamil Nadu in the Madurai-Kollam and Chittoor-Thatchur corridors with an allocation of INR. 1.03 lakh crores.
- 1,100kms to be built in Kerala with an allocation of INR. 65,000 crores. This will include the 600km stretch of the Mumbai-Kanyakumari corridor.
- 675kms of highway road to be built in West Bengal with an allocation of INR. 25,000 crores. This will include upgrading the existing Kolkata-Siliguri highway.
- An additional 1300 kms of highways to be built in Assam over the next three years with an allocation of INR. 34,000 crores.
- National Railway Plan for 2030. Bringing down costs to enable make in India.
- Two corridors will be commissioned by June 2022 – the Western Dedicated Freight Corridor and the Eastern Dedicated Freight Corridor. The corridors will be developed through PPP mode.
- Broad Gauge Route Kilometers (RKM) electrification is likely to reach 46,000 RKM (72%) by end of 2021
- 100% electrification of Broad-Gauge routes will be completed by December 2023
- 1,10,055 crores for railways allocation. INR. 1,07,100 for Indian Railways’ capital expenditure.
- A new scheme will be launched to augment public bus transport services. The scheme will facilitate the deployment of innovative PPP models to enable private sector players to finance, acquire, operate and maintain over 20,000 buses.
- There is an allocation of INR. 18,000 crores for this scheme.
- Two new technology projects, namely Metro Lite and Metro NEO will be put in place, to provide a better experience and better safety at a lower cost in tier 2 cities
- Central counterpart funding will be provided for the following metro projects:
- Kochi metro;
- Chennai metro phase 2 also to get support;
- Bengaluru metro phase 2A and 2B, and
- Nagpur metro phase 2 and Nashik metro.
- The government will introduce a framework to allow consumers to choose from among more than one DISCOMs
- 3.5 lakh crores will be spent over 5 years to revamp infrastructure creation for DISCOMs. This will be used to assist DISCOMs in implementing prepaid smart metering, upgrading of various systems, etc. Renewable energy:
- A comprehensive National Hydrogen Mission will be implemented in 2021 and 2022 to generate hydrogen from green power sources.
- 1,000 crore infusion for Solar Energy Corporation of India (SECI), and INR 1,500 crore infusion for Indian Renewable Energy Development Agency.
- The government will release a phased manufacturing plan for solar cells and solar panels. Duties on imported solar inverters will be increased from 5% to 20%, and on solar lanterns from 5% to 15%
- Sector impacted:
- Power; Renewable Energy; MSMEs.
Budget presented by FM was though very balanced and it is more oriented towards “Atmanirbhar Bharat” as per govt. but privatization is one of the controversial part of the budget.