Budget 2021: The Key Takeaways
Nirmala Sitharaman, the Union Minister of Finance, announced the Union budget 2021 on 1 February 2021. Like always, there was a blend of surprises and some glaring decisions. In the opening note, she mentioned that the committee found it tough to prepare the budget this time around, courtesy of the ongoing circumstances. She said, “We knew of calamities that have affected a country or a region within a country. But what we have endured with COVID-19 through 2020 is sui generis.” (Sui Generis means- unique)
The budget got introduced in 2 parts
The Union minister introduced the budget in two parts, i.e., A and B. The two sections were based on six pillars that are,
- Health and well-being
- Physical and financial capital and Infrastructure
- Inclusive development for aspirational India
- Reinvigorating human capital
- Innovation and R&D
- Minimum government and maximum governance
Part A was all about Individual sectors and the AtmaNirbhar Bharat initiative. On the other hand, Part B fixated on the tax amend, both direct and indirect taxes. Here are the key takeaways from Budget 2021. Let us discuss them in detail.
1. An Expenditure Budget
One of the greatest takeaways from Budget 2021 is the fact that the Union Minister has found space to transmit a fiscal impulse in 2021-22. As compared to the CAPEX of Rs 4.12 lakh crore in the revised estimate of 2020-21, Nirmala has hiked it up to 34.46% to Rs 5.54 lakh crore in 2021-22.
2. The MSME sector
The honourable Finance Minister has emphasized SMEs and MSMEs as one of the sectors to focus upon. SMEs have been contributing a significant lump to the country’s GDP. She said, “We have taken several steps to support the MSME sector. In this Budget, I have provided Rs 15,700 crores to this sector, more than double of this year’s BE.”
3. A focus on the healthcare industry
We all have witnessed the outrage of the global COVID-19 pandemic in 2020. The Financial minister was quick to bank upon this concern and allocated Rs 2,23,846 crore in this budget for the healthcare industry compared to Rs 94,452 crore in 2020-21. In addition, she provided Rs 35,000 crore for the Covid-19 vaccine and has promised to provide further funds if needed.
4. The rebirth of Development Finance Institutions (DFI)
The idea of DFIs was dropped earlier as IDBI and ICICI turning into banks. However, in this budget, a new DFI with a capital of Rs 20,000 crore has been allotted to provide debt to long gestation projects. The DFI will have statutory backing but will get managed professionally.
5. Asset Monetization
Asset monetization is an ongoing exercise where the government is making in-roads to inspire confidence. The National Monetisation Pipeline of potential assets of PGCIL, NHAI, airports, warehouses, railways, sports stadiums.
6. Agriculture and allied sectors
The farmer’s bill has created a rift in the entire nation already. Taking it into consideration, the Budget 2021 covered agriculture and allied sectors. The Finance Minister said that to provide adequate credit to our farmers, the government has enhanced the agricultural credit target to Rs 16.5 lakh crores in the financial year 2022. She said, “We will focus on ensuring increased credit flows to animal husbandry, dairy, and fisheries. We are enhancing the allocation to the Rural Infrastructure Development Fund from Rs 30,000 crores to Rs 40,000 crores.”
7. The Education sector
The Finance Minister has proposed that over 15,000 schools will get strengthened with quality to induce each and every component of the National Education Policy. Talking about the same, she said, “They shall emerge as exemplar schools in their regions; handholding and mentoring other schools to achieve the ideals of the Policy.” In addition, the Budget has also proposed setting up around 100 Sainik Schools in partnership with NGOs.
8. Innovation, Governance, and R&D
There were some noteworthy announcements for the R&D and Innovation sector in this year’s budget. The ministry has allocated Rs 15000 crores to the National Research Foundation for five years, Rs 4,000 crore over five years for a Deep Ocean Mission, the introduction of formal umbrella structures in 9 cities, and also the Glue Grant.
Right after the Part A speech, Finance Minister Nirmala Sitharaman said, “The forthcoming Census could be the first digital census in the history of India. For this monumental and milestone-marking task, I have allocated Rs3,768 crores in the year 2021-2022.”
Suggested: Highlights of the Budget 2020
Time to wrap up:
Well, this is not all that Budget 2021 had to offer. The Finance ministry focused on other sectors as well including FDI, Digitization, Infrastructure investment, and much more. What are your views about this budget? Do not forget to mention them right down in the comment section.