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Budget 2021: Government forecasts growth of 11 per centfor the coming fiscal year
Finance Minister Nirmala Sitharaman on Monday unveiled the budget for fiscal 2021-22, which aims to shore up an economy badly-hit by the novel coronavirus pandemic. The economy is projected to contract 7.7 per cent in the current fiscal year, although the government forecasts growth of 11 per cent for the coming fiscal year, after a massive COVID-19 vaccination drive and a rebound in consumer demand and investments. These are the highlights from Sitharaman’s fiscal 2021-22 budget:
DEFICIT/GROWTH
* 2020/21 fiscal deficit seen at 9.5% of GDP
* 2021/22 fiscal deficit seen at 6.8% of GDP
* 2025/26 fiscal deficit target set at 4.5% of GDP
* 2021/22 nominal GDP growth seen at 14.4% YoY
EXPENDITURE
* 2020/21 revised expenditure 4.39 trillion rupees ($60.14 billion)
* 2021/22 capital expenditure estimated at 5.54 trillion rupees ($75.90 billion)
* Revised revenue expenditure to 34.5 trillion rupees ($472.70 billion) in 2020/21
* 2021/22 gross expenditure seen at 34.83 trillion rupees ($477.16 billion) in 2021/22
* To provide more than 2 trillion rupees ($27.40 billion)for states and autonomous bodies
* 2021/22 fertiliser subsidy seen at 795.30 billion rupees ($10.88 billion)
* 2020/21 food subsidy allocation revised to 4.23 trillion rupees ($57.88 billion) from 1.16 trillion rupees ($15.87 billion) estimated earlier
* 2021/22 food subsidy seen at 2.43 trillion rupees ($33.25 billion)
* 2021/22 petroleum subsidy seen at 129.95 billion rupees ($1.78 billion)
RECEIPTS
* 2021/22 revenue receipts seen at 17.88 trillion rupees ($244.98 billion)
* 2020/21 revenue receipts revised to 15.55 trillion rupees ($213.06 billion) from 20.21 trillion rupees ($276.91 billion)projected earlier
* Aims to get 6.3 trillion rupees ($86.32 billion) from goods and services tax in 2021/22
* Revised 2020/21 goods and services tax collection to 5.15 trillion rupees ($70.56 billion) from 6.91 trillion rupees ($94.68 billion) projected earlier
* Aims to get 1.04 trillion rupees ($14.25 billion) from dividends and profit in 2021/22
* Aims to get 535.11 billion rupees ($7.33 billion) dividend from Reserve Bank of India and financial institutions in 2021/22
BORROWING
* To raise 2.5 trillion rupees ($34.25 billion) via cash management bills in 2021/22
* 2021/22 gross market borrowing seen at 12 trillion rupees ($164.40 billion)
* India says will need 800 billion rupees ($10.96 billion) in next two months from bond market
HEALTHCARE
* India to allocate 2.2 trillion rupees ($30.20 billion) for healthcare in 2021/22
* Sitharaman says expect two or more COVID-19 vaccines soon
* India to launch new federal health scheme with outlay of around 641 billion rupees ($8.80 billion) over the next six years
* To allocate 350 billion rupees ($4.81 billion) for COVID-19 vaccines, and allocate more funds if needed.
FINANCE
* India to introduce bill for development financial institution with capital of 200 billion rupees ($2.74 billion)
* To infuse 200 billion rupees ($2.74 billion) for recapitalization of state-run banks in FY2022
* India to consolidate certain SEBI regulations for Securities Market Code
* To relax FDI cap for insurance sector to 74% from 49%
* Set up asset reconstruction company to take over toxic assets
* To cut money market requirement to 15% from 25%
* To allocate 15 billion rupees ($205.50 million) for scheme to incentivise use of digital payments
* India to incentivise incorporation of one-person companies
DUTY
* Basic customs duty of 1.4rs/litre on petrol, 1.8rs/liter on diesel
* Proposes agricultural cess of 2.5rs/litre on petrol, 4 rs/litre on diesel
* To withdraw a few exemptions on some mobile components
* Cuts customs duties to 7.5% on semis, some steel products
* Revokes customs duties on some steel products
* Rationalising customs duties on gold and silver
* Cuts tax on gold ore to 6.9% from 11.85%
* Raises import tax on solar inverters and lanterns
* Raising customs duties on some auto parts
* Raises customs duties on cotton to 10%
* To review more than 400 old exemptions for customs duty
* Proposes agricultural infrastructure and development cess
* Reduces customs duty on naphtha to 2.5%
* Proposes 17.5% cess on crude palm oil
* Proposes 20% cess on crude soybean and sunflower oil
INCOME TAX
* Proposes exemption to senior citizens for filing income tax returns
* Proposes changes in personal income taxes for non-resident Indian
* To set up dispute resolution panel for small taxpayers
DIVESTMENT
* India sets 2021/22 divestment target at 1.75 trillion rupees ($23.97 billion)
* India to divest two public sector banks and one general insurance company
* India to launch IPO of Life Insurance Corporation
* India to announce policy for privatization of state-run companies
* To create new list of companies for divestment
* India to introduce new mechanism for privatization of loss-running state-run companies
* To monetizes surplus lands of public sector entities
INFRASTRUCTURE
* To allocate 2.87 trillion rupees ($39.40 billion) for clean water supplies over the next five years
* To allocate 3 trillion rupees ($41.10 billion) for power sector for next five years
* To provide 10 billion rupees ($137.01 million)to Solar Energy Corporation of India
* Sitharaman says will move to end power distribution company monopolies
* To double ship recycling capacity by 2024
* India to monetizes infrastructure assets
* To extend tax holiday on low cost housing projects for one more year
TRANSPORT
* Allocates 1.18 trillion rupees ($16.17 billion) for ministry of roads and highways
* Allocates 1.1 trillion rupees ($15.07 billion) for railways
* Railways to monetizes freight corridors
* India to launch new vehicle scrapping policy
* Proposes tax holiday for aircraft leasing firms in India
AGRICULTURE
* India allocates an estimated 1.7 trillion rupees ($23.29 billion) for paddy procurement
* Hikes enhanced agriculture credit target to 16.5 trillion Indian rupees ($226.05 billion) in 2020/21
* To include loans for activities in allied sectors in agriculture
* To discontinue small savings fund loans to Food Corporation of India
LABOUR
* To launch database for gig economy, building and construction workers
* Social security benefits to be extended to gig economy workers
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