The “ Actual ” Versus The “ Variance ” And Examples Of The Union Budget Of Last Trading Year To This Trading Year
Finally the
Union budget for the year 2021-2022 has
ben placed on the table. I have in my previous article compared and analysed
all about the salient features of the budget placed.
The present
budget gives a lot of hopes for the nation for all the sector to do twice as
well as they did in the last year but that also explains it very properly to
WORK as much as 35 times to 40 times more harder with accurate efficiency to
achieve that feat as without it this budget will not give the desired fruit to
anybody to get the best out of the same.
The Finance
Minister said that 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 . To
achieve this the technology has to raise it’s standard and also that the
quality has to be the BEST in terms of facing the competition beside the
cost-effectiveness also ought to be considered .
Competing at
the global stage not only requires the quality to be maintained at it’s best
but it also calls in for maintain the cost at the most comparable level and the
durability too comes into the forbeing .Unless and until that is maintained and
all the three factors balanced, in an manner to balance every factor of
production the global success for our product to compete against the best of the
world will never be fulfilled.
The Union Minister for Finance & Corporate Affairs, Smt
Nirmala Sitharaman presented the Union Budget 2021-22 in Parliamenton February
ist 2021, , which is the first budget of this new decade and also a digital one
in the backdrop of unprecedented COVID-19 crisis. Laying a vision for
AatmaNirbhar Bharat, she said this is an
expression of 135 crore Indians who have full confidence in their capabilities
and skills. She said that Budget proposals will further strengthen the Sankalp
of Nation First, Doubling Farmer’s Income, Strong Infrastructure, Healthy
India, Good Governance, Opportunities for youth, Education for All, Women
Empowerment, and Inclusive Development among others.
She further reiterated that, some important materials very
important from the national view point, some past budget and it’s missed out
achievements are also included in this budget as an addition, which would be added up to this budget , as also
on the path to fast-implementation are the 13 promises of Budget
2015-16-which were to materialize during the Amrut Mahotsav of 2022, on the
75th year of our Independence. They too resonate with this vision of Aatma Nirbharta,
she added.
The Budget proposals for 2021-22 rest on 6 pillars.
There are six important factors as well as the point taken which
mainly covers the SIX sectors, of the Union Budget . Broadly
speaking the six important sectors are as follow - :
Health and Wellbeing
1 ) . Physical & Financial
Capital, and Infrastructure
2 ) . Inclusive Development for Aspirational India
3 ) . Reinvigorating Human
Capital
4 ) . Innovation and R&D
5 ) . Minimum Government and
Maximum Governance
6 ) . Health and Wellbeing
There is substantial increase
in investment in Health Infrastructure and the Budget outlay for Health and
Wellbeing is Rs 2,23,846 crore in BE 2021-22 as against this year’s
BE of Rs 94,452 crore, an increase of 137 percentage.
The Finance Minister announced
that a new centrally sponsored scheme, PM Aatma Nirbhar Swasth Bharat Yojana, will
be launched with an outlay of about Rs 64, 180 crore 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. This
will be in addition to the National Health Mission.
Though well addressed and explained there would be some humps on
the road for making this budget that encompasses the National Health as a main
issue, and some of them are illustrated down under .The intervention is due to
occur while going in for the task to meet the outlay on the Health sector and
it could be illustrated in a few words as under-:
The main interventions under
the scheme are:
1 ) . Support for 17,788 rural
and 11,024 urban Health and Wellness Centers
2 ) . Setting up integrated public
health labs in all districts and 3382 block public health units in 11 states;
3 ) . Establishing critical
care hospital blocks in 602 districts and 12 central institutions;
4 ) . Strengthening of the
National Centre for Disease Control (NCDC), its 5 regional branches and 20
metropolitan health surveillance units;
5 ) . Expansion of the
Integrated Health Information Portal to all States/UTs to connect all public
health labs;
Operationalisation of 17 new
Public Health Units and strengthening of 33 existing Public Health Units at
Points of Entry, that is at 32 Airports, 11 Seaports and 7 land
crossings;
Setting up of 15
Health Emergency Operation Centers and 2 mobile hospitals; and
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.
Vaccines - :
Provision of Rs 35,000
crore made for Covid-19 vaccine in BE 2021-22. The Pneumococcal Vaccine, a Made
in India product, presently limited to only 5 states, will be rolled out across
the country aimed at averting 50,000 child deaths annually.
Nutrition
To strengthen nutritional
content, delivery, outreach, and outcome, the Government will merge the
Supplementary Nutrition Programme and the PoshanAbhiyan and launch the Mission
Poshan 2.0. The government will adopt an intensified strategy to improve nutritional
outcomes across 112 Aspirational Districts.
Universal Coverage of Water Supply and Swachch Bharat Mission
The Finance Minister announced
that the Jal Jeevan Mission (Urban), will be launched for universal water
supply in all 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 5 years, with an
outlay of Rs. 2,87,000 crore. Moreover,
the Urban Swachh Bharat Mission will be implemented with a
total financial allocation of Rs 1,41,678 crore over a
period of 5 years from 2021-2026. Also to tackle the burgeoning problem of air
pollution, the government proposed to provide an amount of Rs.
2,217 crore for 42 urban centres with a million-plus population in
this budget. A voluntary vehicle scrapping policy to phase out old and unfit
vehicles was also announced. Fitness tests have been proposed in automated
fitness centres after 20 years in case of personal
vehicles, and after 15 years in case of commercial vehicles.
This as and if compared to the previous budget and if this is
obtained by the end of the next year ofcourse some of the long terms plans of
five years to six years, that I have explained it over here, it would be over
2% above the GDP figure that was outlayed for the lasy year’s budget and this
augurs well for a definite overall improvement envisaged in the overall
measures to be fast to grow on the improvement trajectory.
Physical and Financial Capital and Infrastructure - :
Aatma Nirbhar Bharat-Production Linked Incentive Scheme
The Finance Minister said that
for a USD 5 trillion economy, our manufacturing sector has to grow in double
digits on a sustained basis. The problem here is that the manufacturing unit is
even below placed with it’s point not even at the half way mark of 5 units and
the overall GDP from the manufacturing unit is not even 3.0 on the GDP
svcale.IOt is even below that. This is a area of concern.
Our manufacturing companies
need to become an integral part of global supply chains, possess core
competence and cutting-edge technology. To achieve all of the above, PLI
schemes to create manufacturing global champions for an Atma Nirbhar Bharat have
been announced for 13 sectors. For this, the
government has committed nearly Rs.1.97 lakh crore in the next
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. All said and done , the scaling done ought to be over 10 points
from the present five and the GDP ought to be 6 points ie 6 percent from the
present so abysmal below 3, and that requires a lot of hard work to be done
with neat and accurate precision and efficiency , on the scale of industrious hard work.
Textiles
Similarly, to enable the
textile industry to become globally competitive, attract large investments and
boost employment generation, a scheme of Mega Investment Textiles
Parks (MITRA) will be launched in addition to the PLI scheme. This will create
world-class infrastructure with plug and play facilities to enable the creation
of global champions in exports. Seven ( 7
) Textile Parks will be
established over 3 years.
The
real picture of
the textile industry is all the textile industry under the state or the Central
Government does not exists at all. The Khadi Gram Udyog is the
exception and a few that are on the run are also breathing very badly. This
needs to be seen and addressed properly as this is a grave concern and a
bravious matter for all to bear it.
It is on the light which is not at all so clear and bright to see
that everything in this sector is so very clear and bright to see. The picture
does not appears that rosy. The plan outlay in the budget is very good but the
reality is far from the truth that one forsees that and this needs to be taken
care of.
Infrastructure
The National Infrastructure
Pipeline (NIP) which the Finance Minister announced in December 2019 is the first-of-its-kind,
whole-of-government exercise ever undertaken. The NIP was launched with 6835 projects; the project
pipeline has now expanded to 7,400
projects. Around 217 projects worth Rs 1.10 lakh crore under some key
infrastructure Ministries have been completed. This if completed well in time
within the laid capital as outlayed and mentioned in the previous budget, will
definitely give a boost to the oil sector and the refineries in large. That
will help the GDP to swell by atleast 1.5% on the GDP points and it’s scale.
This gives a hope of being confident to
revieve the oil sector which now is badly looking at the Government to provide
itself a good breathe.
Infrastructure financing - Development Financial Institution (DFI)
Dwelling on the infrastructure
sector, Smt Sitharaman said that infrastructure needs long term debt financing.
A professionally managed Development
Financial Institution 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.
Asset Monetisation
Monetizing operating public
infrastructure assets is a very important financing option for new
infrastructure construction. A “ National Monetization Pipeline ”
of potential Brownfield infrastructure assets will be launched. An Asset
Monetization dashboard will also be created for tracking the progress and to
provide visibility to investors. Some important measures in the direction of
monetisation are:
1). National Highways Authority
of India and PGCIL each have sponsored one Investment IT that will attract
international and domestic institutional investors. Five operational roads with
an estimated enterprise value of Rs 5,000 crore are being transferred to the
NHA II investment IT. Similarly, transmission assets of a value of Rs
7,000 crore will be transferred to the PGCIL Inv IT.
2). Railways will monetize
Dedicated Freight Corridor assets for operations and maintenance, after
commissioning.
3). The next lot of Airports will
be monetised for operations and management concession.
4). Other core infrastructure
assets that will be rolled out under the Asset Monetization Programme are: (i) NHAI Operational Toll Roads (ii)
Transmission Assets of PGCIL
(iii) Oil and Gas Pipelines of GAIL,
IOCL and HPCL (iv) AAI
Airports in Tier II and III cities, (v) Other Railway Infrastructure Assets (vi) Warehousing
Assets of CPSEs such as Central Warehousing Corporation and NAFED among others
and (vii) Sports Stadiums.
This appears to be well and fairly chosen to put all the inputs of
investment and upscale the infrastructure which except for some, will add on to
the overall NETT-GDP of this country .However the caution would be
that it ought to be seen that nothing in terms of the pilferages or the spills
takes place and the infrastructure on this remains without it being destructed
and damaged. These Infra Structures indirectly will bring in many an income to
the Government in the future through the labour and through the items that
would be required to construct and maintain thee infrastructure but it also
would depend that the destructions to them and the pilferages does not takes
palce at all.
Roads and Highways Infrastructure
Finance Minister announced that
more than 13,000 km length of
roads, at a cost of Rs 3.3 lakh crore,
has already been awarded under the Rs. 5.35 lakh crore Bharatmala Pariyojana
project of which 3,800 kms have been constructed. By March 2022, the Government
would be awarding another 8,500 kms and completing an additional 11,000 kms of
national highway corridors. To further augment road infrastructure, more
economic corridors are also being planned. The Finance Minister also
provided an enhanced outlay of Rs.
1,18,101 lakh crore for the Ministry of Road Transport and Highways, of
which Rs.1,08,230 crore is
for capital, the highest
ever.
The road taxes and the Toll
Plaza Taxes or the Toll Tax will play an important
role to bring about the earning to the Government and this will be in over the
present earning and if successfully done, it could enhance the GDP by over 1% . This again is a advantage that scores over the previous annual
budget .
Railway Infrastructure
Indian Railways have prepared a
National Rail Plan for India – 2030. The coming TEN years of a national
preparation of the Indian Railways has been earmarked and has been taken into
account to make Indian Railways ONE-OF-THE-BEST-IN-THE-WORLD.
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 ’. It is
expected that Western Dedicated Freight Corridor (DFC) and Eastern DFC will be
commissioned by June 2022.
For Passenger convenience and
safety the following measures are proposed:
1). Introduction of
aesthetically designed Vista Dome LHB coach on tourist routes to give a better
travel experience to passengers.
2). The safety measures
undertaken in the past few years have borne results. To further strengthen this
effort, high-density network
and highly utilized network routes
of Indian railways will be provided with an indigenously developed automatic
train protection system that eliminates train collision due to human error.
3). Budget also provided a
record sum of Rs. 1,10,055 crore,
for Railways of which Rs. 1,07,100
crore is for capital expenditure.
As compared to the previous budget this
revised budget with some additional inputs to improve the core Railway
operating system if achieved properly will give an additional income of over 1%
on the NETT GDP of India and this again will be a great achievement in the
future if achieved.
Urban Infrastructure
The government will work
towards raising the share of public transport in urban areas through expansion
of the metro rail network and augmentation of city bus service. A new scheme
will be launched at a cost of Rs.
18,000 crore to support augmentation of public bus transport services.
A total of 702 km of
conventional metro is operational and another 1,016 km of metro and RRTS is
under construction in 27 cities. Two new technologies i.e., ‘MetroLite’ and
‘MetroNeo’ will be deployed to provide metro rail systems at much lesser cost
with the same experience, convenience and safety in Tier-2 cities and
peripheral areas of Tier-1 cities.
Metro that would be awarded to the cities have to fetch the
income.It is of no use to award a metro at a city where the disposable income
is very low and the people will never be able to use it for them. The Nagpur
Metro is an class example of the same .
A properly awarded metro is a big boon and it helps but it happens
otherwise as well if the metro runs without it’s full capacity. Hence
the success would depend upon the award of the METRO’s that the city would receive
.
Power Infrastructure
The past 6 years have seen
a number of reforms and achievements in the power sector with the addition of 139
Giga Watts of installed capacity, connecting an additional 2.8
crore households and addition of 1.41 lakh circuit km
of transmission lines.
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. 3,05,984 crore over 5
years. The scheme will provide assistance to DISCOMS for Infrastructure
creation including pre-paid smart metering and feeder separation, upgradation
of systems, etc., tied to financial improvements.
The overall condition of the power infrastructure is very poor. On
an average and overall the power sector works on the losses after losses that
it incurs and the technological inputs as well as the output of the power
generation is way way and way below the required normal mark that infuses any
good hope and a better achievement of the result that would accrue from this
budget.
It is this sector which will run the industry so fine or will
completely doom it to the state of being destructed, and this sector requires a
extra watch and look to an overall improvement. This again will make the INDIA
that we are waiting to see in terms of modernity in technology or it’s complete
failure .
Ports, Shipping, Waterways
Major Ports will be moving from
managing their operational services on their own to a model where a private partner will manage it
for them. For the purpose the budget proposes to offer more than
Rs. 2,000 crore by Major Ports on Public Private Partnership mode in FY21-22.
A scheme to promote flagging of
merchant ships in India will be launched by providing subsidy support to Indian
shipping companies in global tenders floated by Ministries and CPSEs. An amount
of Rs. 1624 crore will be
provided over 5 years. This initiative will enable greater training and
employment opportunities for Indian seafarers besides enhancing Indian
companies' share in global shipping.
The example of the failure of the SHIPPING CORPORATION OF INDIA
ought to be studied very carefully and thereupon it’s case study will help this
Government to prevent any further
mishaps like the Shipping Corporation of India has ever seen .
The
sector needs Government interruption and the Government scale of punishment to
the scoundrels beside the Government lateral aid to push itself further for a
overall improvement and add to the kitty of the government to be on the fast
run for the business to generate and prosper.
Petroleum & Natural Gas
Smt Sitharaman said that the
government has kept fuel supplies running across the country without
interruption during the COVID-19 lockdown period. Taking note of the crucial
nature of this sector in people’s lives, the following key initiatives are
being announced:
1). Ujjwala Scheme which has
benefited 8 crore households will be extended to cover 1 crore more
beneficiaries.
2). Government will add 100
more districts in next 3 years to the City Gas Distribution network.
3). A gas pipeline project will
be taken up in Union Territory of Jammu & Kashmir.
An independent Gas
Transport System Operator will be set up for facilitation and
coordination of booking of common carrier capacity in all-natural gas pipelines
on a non-discriminatory open access basis.
As compared to the outlay of the previous budget, the new one
brings in a good hope for an overall increment of about 1% to about 1.50%
of an enhancement in the GDP only if the management sees the best of the input
and supervision for it to make it big and success for itself in the coming one
year.
Financial Capital
The Finance Minister proposed
to consolidate 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. The Government would
support the development of a world class Fin-Tech hub at the GIFT-IFSC.
Now this is where the people are looking into this Government for
a full scale support of the Government to work on this and make it a best
preposition for the people ho are above 60 to put in their money in all the
Financial Security scheme and to earn the best out of the same.
Properly implemented, effectively controlled will really bring
about a huge income to the Government by the way of the proposed TAX-DEDUCTION-AT-SOURCE from the
Banks and ther Financial Institute on the same.
This gives the present Government to eran as much as 2% on the GDP
scale if the schemes are properly taken care of.
Increasing FDI in Insurance Sector
Mrs Nirmala Sitaraman ,also proposed to amend
the Insurance Act, 1938 to increase the permissible FDI limit from 49% to 74% 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% of Directors being Independent
Directors, and specified percentage of profits being retained as
general reserve.
Disinvestment and Strategic Sale
In spite of COVID-19, the
Government has kept working towards strategic 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, NeelachalIspat Nigam limited among others would
be completed in 2021-22. Other than IDBI Bank, Government proposes to take up
the privatization of two Public Sector Banks and one General Insurance company
in the year 2021-22.
In 2021-22, Government would
also bring the IPO of LIC for which the requisite amendments will be made in
this Session itself.
In a very important
announcement, the Finance Minister said that in the AtmaNirbhar Package, she
had announced to come out with a policy of strategic disinvestment of public
sector enterprises and said that the Government has approved the said
policy. The policy provides a clear roadmap for disinvestment in all
non-strategic and strategic sectors. The government has kept four areas
that are strategic where bare minimum CPSEs will be maintained and rest
privatized. In the non-strategic sectors, CPSEs will be privatised, otherwise
shall be closed. She said that to fast forward the disinvestment policy,
NITI Aayog will work out on the next list of Central Public Sector companies
that would be taken up for strategic disinvestment. The government has
estimated Rs. 1,75,000 crore as receipts from disinvestment in BE 2020-21 .
However
I would advise this Government NOT to go FLAT and ALL-OUT to privatize or
disinvest in the Container Corporation Of India without reading so much of it
and into it.
3. Inclusive Development for Aspirational India
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.
Agriculture
Dwelling on agriculture, she
said that the Government is committed to the welfare of farmers. The MSP
regime has undergone a sea change to assure a price that is at least 1.5
times the cost of production across all commodities. The
procurement has also continued to increase at a steady pace. This has
resulted in increase in payment to farmers substantially.
In the case of wheat, the total
amount paid to farmers in 2013-2014 was Rs. 33,874 crore. In 2019-2020 it was
Rs. 62,802 crore, and even better, in 2020-2021, this amount, paid to farmers,
was Rs. 75,060 crore. 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 Rs. 63,928 crore. In 2019-2020, this increased to Rs.1,41,930
crore. Even better, in 2020-2021, this is further estimated to increase to Rs.
172,752 crore. The farmers benefitted increased from 1.24 crore in
2019-20 to 1.54 crore in 2020-21.
In the same vein, in the case
of pulses, the amount paid in 2013-2014 was ` 236 crore. In 2019-20 it
increased to Rs. 8,285 crore. Now, in 2020-2021, it is at Rs.10,530 crore, a
more than 40 times increase from 2013-14.
The receipts to cotton farmers
have seen a stupendous increase from Rs. 90
crore in 2013-14 to Rs.
25,974 crore (as on 27th
January 2021).
Early this year, the Honourable
Prime Minister had launched 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 and the Finance
Minister proposed during FY21-22 to extend this to cover all states/UTs.
To provide adequate credit to
our 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 increased from Rs. 30,000 crore to Rs. 40,000 crore. The Micro
Irrigation Fund, with a corpus of Rs.5,000 crore has been created under NABARD
will be doubled.
In an important announcement 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.
Around 1.68 crore farmers are
registered and Rs. 1.14 lakh crore of trade value has been carried out through
e-NAMs. Keeping in view the transparency and competitiveness that e-NAM has
brought into the agricultural market, 1,000 more mandis will be
integrated with e-NAM. The Agriculture Infrastructure Funds would be made
available to APMCs for augmenting their infrastructure facilities.
Fisheries
The Finance Minister proposed
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.
Migrant Workers and Labourers
The government has launched the
One Nation One Ration Card scheme
through which beneficiaries can claim their rations anywhere in the country. One
Nation One Ration Card plan is under implementation by 32 states
and UTs, reaching about 69 crore beneficiaries –
that’s a total of 86% beneficiaries covered. The remaining 4 states
and UTs will be integrated in the next few months.
Government proposes to conclude
a process that began 20 years ago, with the
implementation of the 4 labour codes. For the first time globally, social
security benefits will extend to gig and platform workers. Minimum wages will
apply to all categories of workers, and they will all be covered by the Employees
State Insurance Corporation. Women will be allowed to work in all categories
and also in the night-shifts with adequate protection. At the same time,
compliance burden on employers will be reduced with single registration and
licensing, and online returns.
Financial Inclusion
To further facilitate credit
flow under the scheme of Stand Up India for SCs, STs, and women, the
Finance Minister proposed to reduce the margin money requirement from 25%
to 15%, and to also include loans for activities allied to
agriculture. Moreover, a number of steps were taken to support the MSME sector
and in this Budget, Government has provided Rs. 15,700 crore
to this sector – more than double of this year’s BE.
4. Reinvigorating Human Capital
The Finance Minister said that
the National Education Policy (NEP) announced recently has had good reception
while adding that more than 15,000 schools will be
qualitatively strengthened to include all components of the National Education
Policy. She also announced that 100
new Sainik Schools will be set up in partnership with NGOs/private
schools/states. She also proposed to set up a Higher Education Commission of
India, as an umbrella body having 4 separate vehicles for standard-setting,
accreditation, regulation, and funding. For accessible higher education in
Ladakh, the Government proposed to set up a Central University in Leh.
Scheduled Castes and Scheduled Tribes Welfare
The government has set a target
of establishing 750 Eklavya model residential schools in tribal areas
with an increase in the unit cost of each such school from Rs. 20 crore to Rs. 38 crore,
and for hilly and difficult areas, to Rs. 48 crore. Similarly,
under the revamped Post Matric Scholarship Scheme for the welfare of Scheduled
Castes, the Central Assistance was enhanced and allocated Rs.
35,219 crore for 6 years till 2025-2026, to
benefit 4 crore SC students.
Skilling
An initiative is underway, in
partnership with the United Arab Emirates (UAE), to benchmark skill
qualifications, assessment, and certification, accompanied by the deployment of
certified workforce. The Government also has a collaborative Training Inter
Training Programme (TITP) between India
and Japan to facilitate transfer of Japanese industrial and vocational
skills, technique, and knowledge and the same would be taken forward with many
more countries.
Here a piece of advise to the present Government is if you
really want the skill upgradation in India for almost everything and every
sector of the people working in the various industry, better if the Government
uses the Japanese and their techniques for doing the same and
upscaling the skill techniques here. Other than the Japanese skill
technique , the Indian will never be benefitted so much with the shill
technique of any other nation.
A wrongly chosen skill enhancing technique will see the nation
losing it’s capacity for skill enhancement by over 2% per annum and this would
be a catastrophe for anybody to bear at India. Be for the watchout this
Government.
5. Innovation and R&D
The Finance Minister said that
in her Budget Speech of July 2019, she had announced the National Research Foundation and added that the NRF
outlay will be of Rs. 50,000 crore, over 5 years. It will ensure that the overall research ecosystem
of the country is strengthened with focus on identified national-priority
thrust areas.
The government will undertake a
new initiative – National Language Translation Mission (NLTM). This will
enable the wealth of governance-and-policy related knowledge on the Internet
being made available in major Indian languages.
The New Space India Limited
(NSIL), a PSU under the Department of Space will execute the
PSLV-CS51 launch, carrying the Amazonia Satellite from Brazil, along with a few
smaller Indian satellites.
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.
6. Minimum Government, Maximum Governance
Dwelling on the last of the six
pillars of the Budget, the Finance Minister proposed to take a number of steps
to bring reforms in Tribunals
in the last few years for the speedy
delivery of justice and proposes to take further measures to rationalised the functioning
of Tribunals. The government has introduced the National Commission for
Allied Healthcare Professionals Bill in Parliament, with a view to ensure
transparent and efficient regulation of the 56 allied healthcare professions.
She also announced that the forthcoming Census could be the first digital
census in the history of India and for this monumental and milestone-marking
task, Rs. 3,768 crore allocated in the year 2021-2022.
On Fiscal position,
she underlined that the pandemic’s impact on the economy resulted in a weak
revenue inflow. Once the health situation stabilised, and the lockdown was
being slowly lifted, Government spending was ramped up so as to revive domestic
demand. As a result, against an original BE
expenditure of Rs. 30.42 lakh crore for 2020-2021, RE estimates are Rs. 34.50 lakh
crore and quality of expenditure were maintained. The capital
expenditure, estimated in RE is Rs. 4.39 lakh crore in 2020-2021 as against Rs.
4.12 lakh crore in BE 2020-21.
The Finance Minister said the fiscal
deficit in RE 2020-21 is
pegged at 9.5% of GDP and it has been funded through Government
borrowings, multilateral borrowings, Small Saving Funds and short term
borrowings. She added that the Government would need another Rs 80,000 crore
for which it would be approaching the markets in these 2 months. The
fiscal deficit in BE 2021-2022 is estimated to be 6.8% of GDP. The
gross borrowing from the market for the next year would be around 12 lakh
crore.
Smt Sitharaman announced that
the Government plans to continue the path of fiscal consolidation, and intends
to reach a fiscal deficit level below
4.5% of GDP by 2025-2026 with a fairly steady decline over the period.
“ We hope to achieve the consolidation by first, increasing the buoyancy of tax
revenue through improved compliance, and secondly, by increased receipts from
monetisation of assets, including Public Sector Enterprises and land”, she
said.
In accordance with the views of
the 15th Finance Commission, the Government is allowing a normal ceiling of net
borrowing for the states at 4% of GSDP for the year 2021-2022.
The FRBM Act mandates a fiscal
deficit of 3% of GDP to be achieved by 31st March 2020-2021. The effect of this
year’s unforeseen and unprecedented circumstances has necessitated the submission
of a deviation statement under Sections 4 (5) and 7 (3) (b) of the FRBM Act
which the Finance Minister laid on the Table of the House as part of the FRBM
Documents.
On 9th December 2020, the 15th
Finance Commission submitted its final report, covering the period 2021-2026 to
the Rashtrapatiji. The Government has laid the Commission’s report, along with
the explanatory memorandum retaining the vertical shares of the states at
41%. On the Commission’s recommendation, the Budget provided Rs.
1,18,452 crore as revenue deficit grant to 17 states in 2021-22.
In Part B of the Budget Speech,
the Union Minister Smt. Nirmala Sitharaman seeks to further simplify the Tax
Administration, Litigation Management and ease the compliance of Direct Tax
Administration. The indirect proposal focuses on custom duty rationalization as
well as rationalization of procedures and easing of compliance.
DIRECT TAX PROPOSALS
The Finance Minister provided
relief to senior citizens in the filing of income tax returns, the reduced time
limit for income tax proceedings announced setting up of the Dispute Resolution
Committee, faceless ITAT, relaxation to NRIs, increase in exemption limit from
audit and relief for dividend income. She also announced steps to attract
foreign investment into infrastructure, relief to affordable housing and rental
housing, tax incentives to IFSC, relief to small charitable trusts, and steps
for incentivizing Startups in the country.
Smt.Nirmala Sitharaman, in her
Budget speech, said that post-pandemic, a new world order seems to be emerging
and India will have a leading role therein. She said in this scenario,
our tax system has to be transparent, efficient and should promote investment
and employment in the country. The Minister said that at the same time,
it should put minimum burden on our tax payers. She said that a series of
reforms had been introduced by the Government for the benefit of tax payers and
the economy, including slashing of corporate tax rate, abolition of dividend
distribution tax, and increasing of rebate for small taxpayers. In the
year 2020, the income tax return filers saw a dramatic increase to 6.48 crore
from 3.31 crore in 2014.
The Budget seeks to reduce
compliance burden on senior citizens who are of 75 years of age and above.
Such senior citizens having only pension and interest income will be exempted
from filing their income tax return. The paying Bank will deduct the
necessary tax on their income. The Budget proposes to notify rules for
removing the hardship of non-Resident Indians returning to India on the issue
of their accrued incomes in their foreign retirement account. The Budget
proposes to make dividend payment to REIT/InvIT exempt from TDS. For
Foreign Portfolio Investors, the Budget proposes deduction of tax on dividend
income at lower treaty rate. The Budget provides that advanced tax
liability on dividend income shall arise only after the declaration or payment
of dividend. The Minister said that this was being done as the amount of
dividend income cannot be estimated correctly by the shareholders for paying
advance tax.
The Finance Minister proposed
to extend the eligibility period for claims of additional deduction for
interest of Rs. 1.5 lakh paid for loan taken for purchase of an affordable
house to 31st March, 2022. In order to increase the supply of affordable
houses, she also announced an extension of eligibility period for claiming tax
holiday for affordable housing projects by one more year to 31st March,
2022. For promoting supply of affordable rental housing for the migrant
workers, the Minister announced a new tax exemption for the notified affordable
rental housing projects.
In order to incentivize
startups in the country, Smt. Sitharaman announced an extension in the
eligibility for claiming tax holiday for startups by one more year till 31st
March 2022. In order to incentivize funding of startups, she proposed
extending the Capital Gains exemption for investment in startups by one more
year till 31st March 2022.
The Finance Minister said that
delay in deposit of the contribution of employees towards various welfare funds
results in permanent loss of interest/income for the employees. In order
to ensure timely deposit of employee’s contribution to these funds by the
employers, she announced that late deposit of employee’s contribution shall
never be allowed as a deduction to the employer.
In order to reduce the
compliance burden, the Budget provides a reduction in the time-limit for
reopening of income tax proceeding for three years from the present six
years. In serious tax evasion cases, where there is evidence of
concealment of income of Rs. 50 lakh or more in a year, the assessment can be
reopened up to 10 years but only after the approval of the Principal Chief
Commissioner.
Stating the resolve of the
Government to reduce litigation in the taxation system, the Finance Minister
said that the Direct Tax Vivad se Vishwas Scheme announced by the Government
has been received well. Until 30th January, 2021, over one lakh ten
thousand taxpayers have opted to settle tax disputes of over Rs. 85
thousand crores under the Scheme. To further reduce litigation of small
taxpayers, she proposed to constitute a Dispute Resolution Committee.
Anyone with a taxable income upto Rs. 50 lakh and disputed income upto Rs. 10
lakh shall be eligible to approach the Committee. She also announced the
setting up of the National Faceless Income Tax Appellate Tribunal Centre.
To incentivize digital
transactions and to reduce the compliance burden of the person who is carrying
almost all of the transactions digitally, the Budget proposes to increase the
limit for tax audit for persons who are undertaking 95 per cent of their
transaction digitally from Rs. 5 Crore to Rs. 10 Crore.
To attract foreign investment
into the infrastructure sector, the Budget proposes to relax certain conditions
relating to prohibition on private funding, restriction on commercial
activities and direct investment in infrastructure. In order to allow
funding of infrastructure by issuing zero coupon bonds, the Budget proposes to
make notified infrastructure debt funds eligible to raise funds by issuing tax
efficient zero coupon bonds.
In order to promote the
International Financial Services Centre (IFSC) in GIFT City, the Budget
proposes more tax incentives.
The Budget proposes that
details of capital gains from listed securities, dividend income and interest
from banks, post offices etc. will also be pre-filled to ease filing of
returns. Details of salary income, tax payment, TDS etc already come
pre-filled in returns.
In order to reduce compliance
burden on the small charitable trust running educational institutions and
hospitals, the Budget proposes to increase the limit on annual receipts for
these trusts from present Rs.1 Crore to Rs. 5 Crore for non-applicability of
various compliances.
INDIRECT TAX PROPOSALS
On the issue of Indirect Tax
proposals, the Minister said that record GST collections have been made in the
last few months. She said several measures have been taken to further
simplify the GST. The capacity of the GSTN system has been
announced. Deep analytics and artificial intelligence have been deployed
to identity tax evaders and fake billers, launching special drives against
them. The Finance Minister assured the House that every possible measure
shall be taken to smoothen the GST further and remove anomalies such as the
inverted duty structure.
With respect to the custom duty
policy, the Finance Minister said that it has the twin objectives of promoting
domestic manufacturing and helping India get on to global value change and
export better. She said that the thrust now has to be on easy access to raw
materials and exports of value-added products. In this regard, she
proposed to review 400 old exemptions in the custom duty structure this
year. She announced that extensive consultation will be conducted and
from 1st October 2021, a revised custom duty structure free of distortions will
be put in place. She also proposed that any new custom duty exemptions henceforth
will have validity upto to the 31st March following 2 years of the date of its
issue.
The Finance Minister announced
the withdrawal of a few exemptions on parts of chargers and sub-parts of mobile
phones further some parts of mobiles will move from “NIL” rate to a moderate
2.5 per cent. She also announced reducing custom duty uniformly to 7.5
per cent on semis, flat, and long products of non-alloy and stainless
steel. She also announced exempting duty on steel scrap for a period upto
31st March 2022.
Stressing on the need to
rationalize duty on raw material inputs to man-made textile, the Finance
Minister announced bringing nylon chains on par with polyester and other
man-made fibers. Announcing uniform deduction of the BCD rates on Caprolactam,
nylon chips and nylon fiber and yarn to 5 per cent, the Minister said this will
help the textile industry, MSMEs and exports too. She also announced
calibration of customs duty rate on chemical to encourage domestic value
addition and to remove inversions. The Minister also announced
rationalization of custom duty on gold and silver.
The Finance Minister said that
a phased manufacturing plan for solar cells and solar panels will be notified
to build up domestic capacity. She announced raising duty on solar
inverters from 5 per cent to 20 percent and on solar lanterns from 5 per cent to
15 per cent.
The Finance Minister in her
Budget speech said that there is immense potential in manufacturing heavy
capital equipment domestically and the rate structure will be comprehensively
reviewed in due course. However, she announced revision in duty rates on
certain items immediately including tunnel boring machines and certain auto
parts.
The Budget proposes certain
changes to benefit MSMEs which include increasing duty on steel screws, plastic
builder wares and prawn feed. It also provides for rationalizing
exemption on import of duty free items as an incentive to exporters of
garments, leather and handicraft items. It also provides withdrawing
exemption on imports of certain kinds of leather and raising custom duty on
finished synthetic gemstones.
To benefit farmers, the Finance
Minister announced raising custom duty on cotton, raw silk and silk yarn.
She also announced withdrawing end-use based concessions on denatured ethyl
alcohol. The Minister also proposed an Agriculture Infrastructure and
Development Cess on a small number of items. She said “while applying the
cess, we have taken care not to put additional burden on consumers on most
items.
Regarding rationalization of
procedures and easing of compliance, the Finance Minister proposed certain
changes in the provisions relating to ADD and CVD levies. She also said
that to complete customs investigation, definite time-lines are being
prescribed. The Minister said that the Turant Custom Initiative rolled
out in 2020 has helped in putting a check of misuse of FTAs.
Comparism of the previous year Budget, it’s
“ FISCALITY ” with this years budget
The pervious budget was the first one by Mrs Nirmala
Sitaraman as the union Minister where a GDP growth of a bare minimum of 6.5%
was unvisaged.
That budget actually did not take into account the deep end
of the operation that the Union Government was planning to do in all the
exploration sectors like the Oil and Gas, the sector that is attached to the
water like the Fisheries, the river and the Ocean development , the water
management where the water ought to be taken to every household in the
moffusils and the villages, and more importantly all the spheres that encompasses the farming
as well as the agricultural sector , be it the petty or the huge big
agriculrural operations.
The previous budget also did not speak so precisely about
the cutting down of the Capital expenditure by almost 50 percent in the coming
year and to cut it also to about 4.5% in the
next four years to have a RESERVE FUND in the banks so that in case of any eventualities that the country would
face like it faced recently during the COVID-19, the Government would have
enough cash under it’s belly to cover itself gloriously for atleast two years
in the minimum.
The previous budget did not throw any chance to even meet
the existing and the propsed GDP placed at 6.5% because of the lack of the
informations that could have been provided to the sectors by the Research and
Intelligence unit.That was a bane .This budget provides the establishment in
almost all the units and the sector which will provide it.There is a provision
that the new PSU as that may be deemed to say it would be created which will do
every kind of a research and would provide the information to the sectors to
implement them immediately and to upscale the operation of those sectors to increase it’s productivity and
enhance it’s skill and technology to the required scale to transform everything into being qualitative
output and in accordance to the requirement of the needy.
A lot of schemes and openings are put into the
manufacturing, infrastructure and the efense unit and this sector would see the
self manufactured and self producing end products which would be cost
effective, scientic precise in term of precision and perfection and it would
save the money going out to the foreign manufactures from where this components would be procured for
production and this again will help in reducing the foreign currency to go out
of the Indian Banks, as a result the Capital Expenditure would be reduced to an
large extent and the foreign reserves would help in balancing the Indian
currency to stand up against the dollars.
This will boost and enhance the TOURISM SECTOR , both
directly and indirectly .This will help
the Government to also put it’s money on improving the Health sector for which
there is an increment of 137% in the budget as compared to the last year
budget.The good health maintenance definitely will help in the output of the
productivity which indirectly or directly will help in the contribution of the
GDP to a large extent.
Overall the last year budget did not give any chance to the
GDP to outscale itself more than 6.5% and the COVID-19 has brought it down to
about 1.9% .
Pic - :: The" EXAMPLE" of the " Reality " Of Collection As Against The Actuals
The new budget if worked upon very sincerely will YIELD AS MUCH AS “ 15 % ” AND AS LOW AS “
11% ”
It is that the amount of the work has to be atleast 35 times
more to achieve this kind of an outstanding result. All the Government
machineries will have to be-:
1). Very SERIOUS about their work.
2). The output has to be perfect and precise by almost 100%.
3).The working hours ought to be extended by atleast two
hours per day if NOT working on Saturday or it has to be that SATURDAY
will not be a HOLIDAY or a OFF-DAY for the Government
employee .
4). The QUALITY of being “ CHALTA-HAI ” and
it’s attitude has to be wiped away and the seriousness that comes into the work
will have to be on the view for every moment.
5). NO “ UNDER-HAND ” dealing has to
be the MINDSET in the FIRST place .The machineries which
collected TAXES had it in plenty and as a result the DEFICIT BUDGETTING took
place for more than 60 years which has CHASMED the gulf between the daily
workers and the middle class of the people and the middle class to the filthy
rich. The consumption did get reduced and it told upon the producing units be
it small, be it big in a big manner.
6). The CHECK-AND-BALANCE
and the “ COUNTER- BALANCE ” will have to be on the toe always to execute
and balance the offset that arises out while achieving the target set in this
budget.
These are the SIX- MODEL of many a MODALITIES
that will fall and come under the umbrella and the GAMBUIT of roll on the work
to work for the budget as proposed and without this six fundamental’s it would
not be possible for anybody to achieve anything.
IT IS SAID THAT-:
PLAN THE WORK AND
WORK THE PLAN.
The planning of
the work as stated in the budget is over. The WORK-THE-PLAN is as stated in the
SIX PILLARS as described above.
Atlast if the entire expenditure of the nation from even a
15% or a 11% in either case if it is reduced to about six percent from the 15% that I envisage or
about 2% from 11% as I see that, as envisaged by the Hon'ble Finance Minister , is done and achieved and if the capital
Expenditure as a whole is reduced to about 4.5% in the coming two years-:
THERE WOULD BE ATLEAST TWO
CRORES OF EMPLOYMENT GENERATED PER ANNUM WHICH Mr MODI HAD PROMISED IN 2014 AND
THAT WOULD BECOME A REALITY- A PROMISE DELIVERED BY HIM IN 2014 .
Mind you an enhancement of 1% in the GDP give
the BIRTH to about 1 crores of employment generation per annum.
Well , that is it and That sums it all.
Regards and Thanks
Pics
Shyamal Bhattacharjee
Mr Shyamal Bhattacharjee, the author was born at West Chirimiri Colliery at District Surguja, Chattisgarh on July 6th 1959 He received his early education at Carmel Convent School Bishrampur and later at Christ Church Boys' Higher Secondary School at Jabalpur. He later joined Hislop College at Nagpur and completed his graduation in Science and he also added a degree in B A thereafter. He joined the HITAVADA, a leading dailies of Central India at Nagpur as a Sub-Editor ( Sports ) but gave up to complete his MBA in 1984 He thereafter added a Diploma In Export Management. He has authored THREE books namely Notable Quotes and Noble Thought published by Pustak Mahal in 2001 Indian Cricket : Faces That Changed It published by Manas Publications in 2009 and Essential Of Office Management published by NBCA, Kolkatta in 2012. He has a experience of about 35 years in Marketing .
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