Mr. Arafattuzzafar and my fellow ISCian,
Since I was asked to enlighten you the budget pointwise, I took the help of my good old friend to prepare a suitable answer for you and the other ISCians. Just have a look at it and understand it.
We should know that Indian Budget is very complex and even the prominent expert economists are not always correct and failed to interpret the Budget document/speech.
Having said this, I am mentioning some key aspects of the Budget Speech of 2020-21 presented by our honourable Finance Minister Nirmala sitaraman, purely from a common man's perspective.
1. Government's Aatmanirbhar packages totalling Rs. 27.1 lakh crore to deal with the COVID pandemic, accelerated the pace of structural reforms. Introduction of Aatmanirbhar health programme with an outlay of Rs. 64,180 crore has been proposed. This will be in addition to the national health mission.
2. India has two COVID-19 vaccines (Covaxin and Covishield) and two more will be launched. Rs. 35,000 crore has been allocated towards COVID-19 vaccination in 2021-22 fiscal.
3. Pipelines of GAIL (India) Ltd, Indian Oil Corp (IOC) and HPCL will be monetised.
4. The FM announced the much-awaited voluntary vehicle scrapping policy to phase out old and polluting vehicles. Under voluntary vehicle scrapping policy, personal vehicles would undergo fitness test after 20 years while commercial vehicles would require it after completion of 15 years. This will promote fuel-efficient and environment friendly vehicles and reduce India's huge import bills.
5. The FM also proposed to increase the capital expenditure to Rs 5.54 lakh crore in the financial year starting April 1, 2021. The Budget estimate of capital expenditure for FY2020-21 was Rs 4.12 lakh crore.
6. The Government will launch national monetisation for potential brownfield infrastructure assets. National monetisation pipeline for potential brownfield infrastructure assets will be launched,
7. The Government has announced a Rs. 18,000 crore scheme to augment public transport in urban areas. There will be 100% electrification of broad gauge rail tracks by December 2023.
8. A record Rs. 1,10,055 crore will be provided for railways, of which Rs. 1,07,100 crore will be for capital expenditure in 2021-22.
9. The free cooking gas LPG scheme, Ujjwala, will be extended to one crore more beneficiaries. The FM said fuel supplies were kept running without interruption during COVID-19 lockdown. The city gas distribution network of providing CNG to automobiles and piped cooking gas to households will be expanded to 100 more districts.
10. Rs. 1,500 crore has been proposed to promote digital payments in the country.
As a common man, I always try to analyse the budget in respect of personal finance issues. The major impact on personal finance by the proposed budget will be in the following areas:
1. Senior citizens need not file income-tax returns: Filing tax returns will not be required for those of 75 years of age or above as pension and interest income is the only source of income for them.
2. Deposit insurance cover to be better structured: A better policy framework will be devised by the Government and the Reserve Bank of India for bank depositors to claim the deposit insurance cover when the banks get into trouble.
3. Social security benefits extended to more workers: Social Security Benefits will be extended to gig and platform workers. E-commerce workers will now be brought under Employees' State Insurance Scheme, Employees' Provident Fund and the minimum wage rule. Women will be allowed to work in all categories in night shifts.
4. Faceless assessment gets a boost: Budget 2021 has given a push to faceless assessment and aims to make it more robust. A (faceless) dispute resolution committee will be set up. Anyone with a taxable income of up to Rs 50 lakh and disputed income upto Rs. 10 lakh can approach the faceless committee.
5. Investment charter for financial products: In order to reduce mis-selling of financial products, the FM announced the setting up of an investment charter. This charter would pertain to investors of all products across the financial sector. The charter is expected to make all current financial products' grievance resolution mechanisms more robust.
6. Faster tax resolutions: The timeline for reopening of assessment under income tax returns will now go down to three years from the present six years. The FM announced that apart from tax deduction at source, now details of capital gains and interests from banks and post offices would be pre-filled. Pre-filled forms improve tax compliance.
7. Deduction on home loan interest extended: Affordable housing gets a boost. The benefits available to those who avail deduction for buying an affordable home will now be extended to those who take a housing loan until March 31, 2022.
8. Tax-efficient zero-coupon bonds for infrastructure: In order to encourage infrastructure growth, it is announced that infrastructure debt funds would now be able to raise funds by issuing tax-efficient zero-coupon bonds.
9. For defence. Rs. 20,776 crore has been allocated additionally for emergency procurement. This is due to LAC stand off.
Two areas of dissatisfaction:
we were expecting some income tax benefits after the pandemic period. But that hasn't happened. Further, the cess on petrol, diesel, gold and some imported agricultural products is not liked by many.
Conclusion about the Budget 2021-2022:
I am happy to state that this is the best budget considering the trying time the world including our country has been passing through due to pandemic and lockdown.
We hope to see an excellent budget for 2022-2023. Untill then, let us be satisfied with what has been provided to us in this grand budget.
No life without Sun