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Post Budget Interactive Session on Union Budget – 2021

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It is important either for your household, your business for the entire country to set up a budget. The budget is an avenue to ensure that the country’s economic growth. The government makes provisions to increase budgetary spending and promote saving. It aims to accelerate the country’s economic growth. If in case of defamation the government will look at the ways to improve people’s spending power.

A budget can be simply looked upon as a spending plan that takes into account both current and future income and expenses. Having a budget will keep your spending in check and make sure your saving is on track for the future. As for your business, you use various services such as CA for small businesses, CA for income tax etc. to keep in track with your business budget. Similarly, the government also uses various provisions, methods, and tools to design an ideal budget in accordance with the current situations prevailing at that time.

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The union minister for finance & corporate affairs, Smt Nirmala Sitharaman had presented the Union budget 2021-2022 in the parliament recently. It is the first budget of the new decade and it is also the first digital budget in the backdrop of the unprecedented COVID-19 crisis.

In her budget, Mrs. Sitharaman has mentioned that the union budget of 2021-2022 will focus on the Six pillars- reinvigorating human capital, physical and financial capital, health and wellbeing, infrastructure inclusive of the development of India, innovation, and R&D, and minimum government and maximum governance.

Our prime minister Mr. Narendra Modi said that the budget was aimed at creating “wealth and wellness” in a country especially in the times when the country is fighting a battle against the spread of coronavirus and requires it to be strong and efficient in terms of medical facilities.

Lying for the vision for Atma Nirbhar Bharat, the Union budget of 2021-2022 will be expressed for 130 crore Indians who have full confidence in their capabilities and skills. This year the budget has focused on further strengthening the Sankalp of the nation first, doubling farming’s income and promoting small business. Strong infrastructure, women empowerment, healthy India, Good governance, Opportunities for youth, Education for All, and inclusive development among others.  

This year’s budget mainly focuses on making India AatmaNirmar and will fully contribute to helping the small business to grow to their full expansion. If you are running a small business you can avail CA firms for better services.

Here is a detailed discussion and understanding of the six pillars of the Union budget 2021-2022.

HEALTH AND WELLBEING

It has been planned to substantially increase the investment in the health infrastructure and the budget outlays for the health and wellbeing to be around Rs 2,23,846 crore in the budget 2021-2022. So there is a total increase of 137 percent in the health-care sector.

There have been provisions made to invest around Rs 35,000 crore for making the vaccine for COVID19. The pneumococcal vaccine which is currently being developed and manufactured in India is a made in India product and is presently limited to only 5 states, and will be rolled out across the country with an aim of averting 50,000 child deaths annually.

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PM Atma Nirbhar Swasth Bharat Yojana has also been launched with an outlay of about Rs64,180 crore over ^ years. This scheme especially aims to develop capacities and of primary, secondary, and tertiary health care systems of our country. It will also be beneficial and helpful in strengthening the existing national institutions and creating new institutions to cater to detection and to cure new and emerging diseases.

This scheme will focus on establishing critical care hospitals blocks in 602 districts and 12 centers, strengthening the national centre for disease control (NCDC) and its 5 regional branches and 20 metropolitan health surveillance units, Expanding the integral health information portal for all the states/UTs to connect all public health labs. 

 PHYSICAL AND FINANCIAL CAPITAL AND INFRASTRUCTURE.

This union budget has also made emphasis on Atma Nirbhar Bharat-production linked incentive scheme. It is now a substantial need to grow our manufacturing sector in double digits as an integral part of our global supply chain. 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. If you also run a small business in that case you can substantially benefit from this union budget as well as will contribute towards the growth of your business. CA for small businesses has also proved to be beneficial for the exponential growth of your business.

In order to enable the textile industry to become globally competitive, and attract large investments and boost employment generation, Mega Investment Textiles Parks (MITRA) is launched along with the PLI scheme. This aims to create a world class infrastructure with play and plug facilities to enable to create global champions in exports.

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.

INNOVATION AND R&D

The government has undertaken a new initiative which includes the National Language Translation Mission (NTLM). This will enable the governance and policy related knowledge wealth on the internet in order to make it available in major Indian languages.

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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 crores, over 5 years. It will ensure that the overall research ecosystem of the country is strengthened with focus on identified national-priority thrust areas.

INCLUSIVE DEVELOPMENT FOR ASPIRATIONAL INDIA.

Under this pillar the union budget aims to strengthen the Agriculture system of our country. It is aimed to benefit farmers as well as other markets related to agriculture as it is important to boost the value addition in agriculture and allied products as well as their exports. For providing our farmers the adequate credit, the government has enhanced the agricultural credit target to Rs.16.5 lakh crore in the union budget 2021-2022. In addition to this the allocation in rural infrastructure development has also been increased.

Finance minister has also accounted for substantial investments in the development of fishing in order to harbour fishery and fish landing sectors. 

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.   

REINVIGORATING HUMAN CAPITAL

An initiative has been in partnership with the United Arab Emirates in order to benchmark the skill qualifications, assessment and certification, accompanied by the development of a certified workforce. This will help to increase the skill and quality workforce in our country.

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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 crores to Rs. 38 crores, 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.

FACTORS THAT MAKE BUDGET BENEFICIAL FOR SMALL BUSINESS.

  • Increased investments.

The Union budget this year has especially focused on increasing the investments offered for small businesses in order to contribute toward AtmaNirbhar Bharat. This will not only help the small start-up to grow but will also make it easier for them to establish a market. CA for business can help by providing the best guidance in order to benefit from union business.

  • Increased opportunities.

This year’s union budget has focused particularly on increasing the salary budget for the small business in every field, whether it be trade, commerce, manufacturing or any many other fields such as farming and fishery. If the small business owners properly maintain their record and appropriately complete their income tax duty then it can be a beneficial year for small businesses.  If you want to keep your income tax record up to date you can avail best CA for income tax services.

TOP 10 TAKE-AWAYS FOR UNION BUDGET 2021.

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  1. FOCUS ON GROWTH INSTEAD OF POPULISM.

Despite 2020 being a tough year due the onset of the coronavirus pandemic which led to the implementation of various lockdowns and caused a lot of problems for the common man. But the finance minister has avoided giving any income tax relief. So the union budget this year does not offer any either increase or deduction in the standards of tax slabs. So it is important that you do not believe any rumours or  misbeliefs about income tax filing.

  1. A GOOD IDEA OF BAD BANK.

After dithering and discussion for almost six years, the government has finally arrived at a decision to set up an asset reconstruction company that will take over the bad loans of the various private banks which will enable the government to have flexibility to finance and economic recovery.

  1. TILTING TOWARDS GROWTH –

As in the previous year, due to the covid 19 pandemic has severely affected our GDP. So, the union budget of 2021-2022 has especially laid emphasis on increasing and improving the GDP of India. Fiscal deficit estimated at 6.8 percent of GDP in 2021-2022. It is estimated to touch 9.5% in 2020-2021. It will be brought down to 4.5 per cent of GDP by 2025-2026. So it is very important in the current time to focus on the methods, techniques, and measures to increase the GDP of our country.

  1.  FOCUS ON ELECTIONS: – 

It is well aware that the election for the four-poll bound states are approaching. These include the election in the four major states including the Tamil Nadu, Kerala, West Bengal and Assam. In virtue of benefit for the upcoming poll-bond state election the government has included the major highway projects for these four states as a major  project in this year’s union budget. Tamil Nadu (3,500km – Rs 1.o3 lakh crore), Kerala (1,100km- Rs 65,000 crore), West Bengal (675 km- Rs 25,000 crore) and Assam (1,300Km-Rs 34,000 crore).

  1.  STRATEGIC DEVELOPMENT- NEEDS POLITICAL/BUREAUCRATIC PUSH.

NITI Aayog asked to short list non-core PSUs for strategic sale. After a poor show in 2020-21, the government has estimated disinvestment receipts at Rs 1,75,000 crore.

  1. RE-ESTABLISHMENT OF DEVELOPMENT FINANCE INSTITUTIONS: –

The idea was dead with earlier DFIs including IDBI and ICICI turning into banks. To provide debt to long gestation projects, a new DFI with a capital of Rs 20,000 crore. It will have statutory backing, but will be professionally managed. Lending portfolio of Rs 5 lakh crore within three years.

  1. AN EXPENDITURE BUDGET: –

Finance minister Mrs. Nirmala Sitharaman has found a well-defined space for imparting a fiscal impulse in 2021-2022. In comparison to the last years, this year there is a capex of Rs.4.12 lakh crore in revised estimate (RE) of 2020-2021, it has been hiked to 34.46 percent to Rs. 5.54 lakh crore in 2021-22.

  1. DEVELOPMENT FINANCE INSTITUTIONS (DFI) REBORN: 

The idea was dead with most earlier DFIs including IDBI and ICICI turning into banks. To provide debt to long gestation projects, a new DFI with a capital of Rs 20,000 crore. It will have statutory backing, but will be professionally managed. Lending portfolio of Rs 5 lakh crore within three years.

  1. A REFORM SIGNAL: –

The two most important public sectors such as banks and one state-owned general insurance company are not attempting to link up for the disinvestment. FDI in insurance to be hiked from 74% from 49% now. 

  1. MORE INVESTMENTS IN HEALTHCARE CENTRE.

As we all know that last year the world was ravaged by the covid-19 pandemic. So, it is very important for every country in the world to improve and focus on its health care system and services. The finance minister has given health the attention it always merited, health allocation jumped 137% to Rs 35,000 crore for the covid-19 vaccine, and promised to provide further funds that it requires.

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