MACRO ECONOMICS (CUTM1214)

TOPIC – UNION BUDGET

SUBMITED BY :-
NEHA AGARWALLA (14)
SURBHI KUMARI (45)
JYOTI KUMARI (24)
ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude to my teacher Mrs Madhumita Das,
who gave us this golden opportunity to do this wonderful project of Macro Economics on
‘UNION BUDGET AND MONETARY POLICY’ . Who also helped us to completing
this project. We came to know about so many new things. We are really thankful to her.

CONTENT
1. Introduction
2. Union Budget
a. Capital Budget
b. Revenue Budget
c. Understanding the Importance of Union Budget
I. Ensure efficient allocation of resources
II. Reduce unemployment and poverty less
III. Reduce wealth and income disparities
IV. Keep a check on prices
V. Change tax structure
3. Summary of Union Budget
a. Health and Wellbeing
b. Physical & Financial Capital and Infrastructure
c. Inclusive Development for Aspirational India
d. Reinvigorating Human Capital
e. Innovation and R&D
f. Minimum Government Maximum Governance
g. Tax Proposals

INTODUCTION

Consistent with Article 112 of the Indian Constitution, the Union Budget of a year, also
mentioned because the annual budget, may be a statement of the estimated receipts and
expenditure of the government for that specific year. Union Budget keeps the account of
the government’s finances for he financial year that runs from 1st April to 31st March.
Union Budget is assessed into Revenue Budget and Capital Budget.

UNION BUDGET
The Union Budget contains details about the projected receivables and payables
of the government for a specific financial year . This budget statement is split into
two major parts—capital budget and revenue budget. The Union Budget is that the
annual report of India as a rustic . It contains the government of India's revenue and
expenditure for the top of a specific financial year , which runs from April 1 to
March 31. The Union Budget is that the most extensive account of the government's
finances, during which revenues from all sources and expenses of all activities
undertaken are aggregated. It comprises the revenue budget and therefore the capital
budget. It also contains estimates for subsequent financial year.

Capital budget

Capital budget accounts for government-related capital payment and receipts. Capital
receipts include loans from the general public or that from the Federal Reserve
Bank of India (RBI), while capital payment includes expenses incurred towards
health facilities, development and maintenance of kit , also as educational facilities.

Revenue budget

As the name suggests, a revenue budget accounts for all the revenue expenditure and
receipts. If the revenue expense is in more than the receipts, the govt suffers a
revenue deficit.

Understanding the importance of a Union Budget

The general objective of the Union Budget is to cause a rapid and balanced economic
process of our country including social justice and equality. Following are the key
objectives that highlight the importance of Union Budget in India.

o Ensure efficient allocation of resources

It is necessary to use the available resources within the best interest of the country.
Allocating resources optimally helps to realize profit maximization for the
government so on foster public welfare.

o Reduce unemployment and poverty levels

Another objective of the Union Budget is to wipe out poverty and make more job
opportunities. this may make sure that every citizen of the country is in a position to
satisfy his/her basic needs of food, shelter, and clothing, along side facilities for
health care and education.
 o Reduce wealth and income disparities

The budget aids in influencing the distribution of income through subsidies

and taxes. It helps to make sure that a high rate of tax is levied on the rich
class, thereby reducing their income. On the opposite hand, a lower rate of tax
is charged on the lower income group to make sure they need sufficient
income in hand.

o Keep a check on prices

The Union Budget aids in controlling the economic fluctuations also . It

ensures proper handling of inflation and deflation, thus bringing about
economic stability. During inflation, surplus budget policies are implemented,
while deficit budget policies are devised during deflation. This aids in
maintaining a price stability within the economy.

o Change tax structure

The Union Budget also dictates the possible changes within the direct and
indirect taxes of the country. It brings about changes to tax rates and tax
brackets. as an example , the upcoming tax slab F.Y. 2020-21 is a
component of this budget.

The Union Budget is indeed crucial because it features a widespread impact on

numerous areas. Hence, it's imperative to possess knowledge about what it
stands for and its importance.

SUMMARY OF UNION BUDGET

Union Minister of Finance and company Affairs Smt. Nirmala Sitharaman stated that
India’s fight against COVID-19 continues into 2021 which this moment in history,
when the political, economic, and strategic relations within the post-COVID world
are changing, is that the dawn of a replacement era – one during which India is well-
poised to really be the land of promise and hope.

6 pillars of the Union Budget 2021-22:

1. Health and Wellbeing

2. Physical & Financial Capital, and Infrastructure
3. Inclusive Development for Aspirational India
4. Reinvigorating Human Capital
 5. Innovation and R&D
6. Minimum Government and Maximum Governance

1.Health and Welbeing

a) Rs. 2,23,846 crore outlay for Health and Wellbeing in BE 2021-22 as against Rs.
94,452 crore in BE 2020-21 – a rise of 137%

b) Focus on strengthening three areas: Preventive, Curative, and Wellbeing

c) Steps being taken for improving health and wellbeing.

I. Vaccines

a) Rs. 35,000 crore for COVID-19 vaccine in BE 2021-22

b) The Made-in-India Pneumovax to be unrolled across the country, from
present 5 states – to avert 50,000 child deaths annually.
II. Health Systems

a) Rs. 64,180 crore outlay over 6 years for PM AatmaNirbhar Swasth Bharat
Yojana –a replacement centrally sponsored scheme to be
launched, additionally to NHM
b) Main interventions under PM Aatma Nirbhar Swasth Bharat Yojana:
c) National Institution for One Health
d) 17,788 rural and 11,024 urban Health and Wellness Centers
e) 4 regional National Institutes for Virology
f) 15 Health Emergency Operation Centers and a couple of mobile hospitals
g) Integrated public health labs altogether districts and 3382 block public
health units in 11 states
h) Critical care hospital blocks in 602 districts and 12 central institutions
i) Strengthening of the National Centre for Disease Control (NCDC), its 5
regional branches and 20 metropolitan health surveillance units
j) Expansion of the Integrated Health Information Portal to all or
any States/UTs to attach all public health labs
k) 17 new Public Health Units and strengthening of 33 existing Public Health
Units
l) Regional Research Platform for WHO South-East Asia Region
m) 9 Bio-Safety Level III laboratories

III. Nutrition
a) Mission Poshan 2.0 to be launched
b) To strengthen nutritional content, delivery, outreach, and outcome
 c) Merging the Supplementary Nutrition Programmed and therefore
the Poshan Abhiyan
d) Intensified strategy to be adopted to enhance nutritional outcomes across
112 Aspirational Districts

IV. Universal Coverage of Water Supply

a) Rs. 2,87,000 crore over 5 years for Jal Jeevan Mission (Urban) - to be
launched with an aim to provide:
b) 2.86 crore household tap connections
c) Universal water system altogether 4,378 Urban Local Bodies
d) Liquid waste management in 500 AMRUT cities

V. Swachch Bharat, Swasth Bharat

a) Rs. 1,41,678 crore over 5 years for Urban Swachh Bharat Mission 2.0
b) Main interventions under Swachh Bharat Mission (Urban) 2.0:
c) Complete fiscal sludge management and waste water treatment
d) Source segregation of garbage
e) Reduction in single-use plastic
f) Reduction in pollution by effectively managing waste from construction-
and-demolition
g) Bio-remediation of all legacy dump sites

VI. Clean Air

a) Rs. 2,217 crore to tackle pollution, for 42 urban centers with a million-plus
population.

VII. Scrapping Policy

a) Voluntary vehicle scrapping policy to end old and unfit vehicles
b) Fitness tests in automated fitness centres:
c) After 20 years just in case of private vehicles
d) After 15 years just in case of economic vehicles

2. Physical & Financial Capital and Infrastructure

I. Production Linked Incentive Scheme(PLI)

a) Rs. 1.97 lakh crore in next 5 years for PLI schemes in 13 Sectors
b) To create and nurture manufacturing global champions for an
AatmaNirbhar Bharat
c) To help manufacturing companies become an integral a part of global
supply chains, possess core competence and cutting-edge technology
d) To bring scale and size in key sectors
 e) To provide jobs to the youth

II. Textiles
a) Mega Investment Textiles Parks (MITRA) scheme, additionally to PLI:
b) 7 Textile Parks to be established over 3 years
c) Textile industry to become globally competitive, attract large investments
and boost employment generation & exports

III. Infrastructure
a) National Infrastructure Pipeline (NIP) expanded to 7,400 projects:
b) Around 217 projects worth Rs. 1.10 lakh crore completed
c) Measures in three thrust areas to extend funding for NIP
a. Creation of institutional structures
b. Big thrust on monetizing assets
c. Enhancing the share of cost
I. Creation of institutional structures
 Rs. 20,000 crore to line up and capitalize a Development Financial
Institution(DFI) – to act as a provider, enabler and catalyst for
infrastructure financing
 Rs. 5 lakh crore lending portfolio to be created under the proposed DFI
in 3 years
 Debt Financing by Foreign Portfolio Investors to be enabled by
amending InvITs’ and REITs’ legislations
II. Big thrust on monetizing assets

o National Monetization Pipeline to be launched

o Important asset monetization measures

a. 5 operational toll roads worth Rs. 5,000 crore being transferred to the NHAIInvIT
b. Transmission assets worth Rs. 7,000 crore to be transferred to the PGCILInvIT
c. Dedicated Freight Corridor assets to be monetized by Railways, for operations and
maintenance, after commissioning
d. Next lot of Airports to be monetized for operations and management concession
e. Other core infrastructure assets to be rolled out under the Asset Monetization
Programme:
 Oil and Gas Pipelines of GAIL, IOCL and HPCL
 AAI Airports in Tier II and III cities
 Other Railway Infrastructure Assets
 Warehousing Assets of CPSEs such as Central Warehousing Corporation
and NAFED
 Sports Stadiums

III. Enhancing the share of cost

 o Rs. 5.54 lakh crore capital expenditure in BE 2021-22 – sharp increase of
34.5% over Rs. 4.12 lakh crore allocated in BE 2020-21 :

 Over Rs. 2 lakh crore to States and Autonomous Bodies for their Capital
Expenditure.
 Over Rs. 44,000 crore for the Department of Economic Affairs to provide for
projects programmes departments exhibiting good progress on Capital
Expenditure

IV. Roads and Highway Infrastructure

a) Rs. 1,18,101 lakh crore, highest ever outlay, for Ministry of Road
Transport and Highways – of which Rs. 1,08,230 crore is for capital
b) Under the Rs. 5.35 lakh crore Bharatmala Pariyojana, quite 13,000 km
length of roads worth Rs. 3.3 lakh crore awarded for construction:
c) 3,800 km have already been constructed
d) Another 8,500 km to be awarded for construction by March 2022

 Additional 11,000 km of national highway corridors to be completed by March

2022
Economic corridors being planned:

o Rs. 1.03 lakh crore outlay for 3,500 km of NHs in Tamil Nadu
o Rs. 65,000 crore investment for 1,100 km of NHs in Kerala
o Rs. 25,000 crore for 675 km of NHs in West Bengal
o Over Rs. 34,000 crore to be allocated for 1300 km of NHs to be undertaken in
next 3 years in Assam, in addition to Rs. 19,000 crore works of NHs currently in
progress in the State

 Flagship Corridors/Expressways:

o Delhi-Mumbai Expressway – Remaining 260 km to be awarded before 31.3.2021

o Bengaluru-Chennai Expressway – 278 km to be initiated in the current FY;
construction to begin in 2021-22
o Kanpur-Lucknow Expressway – 63 km expressway providing an alternate route
to NH 27 to be initiated in 2021-22
o Delhi-Dehradun economic corridor – 210 km to be initiated in the current FY;
construction to begin in 2021-22
o Raipur-Vishakhapatnam – 464 km passing through Chhattisgarh, Odisha and
North Andhra Pradesh, to be awarded in the current year; construction to start in
2021-22
o Chennai-Salem corridor – 277 km expressway to be awarded and construction to
start in 2021-22
o Amritsar-Jamnagar – Construction to commence in 2021-22
 o Delhi-Katra – Construction will commence in 2021-22

 Advanced Traffic management system in all new 4 and 6-lane highways:

o Speed radars
o Variable message signboards
o GPS enabled recovery vans will be installed

V. Railway Infrastructure
a) Rs. 1,10,055 crore for Railways of which Rs. 1,07,100 crore is for cost
b) National Rail Plan for India (2030): to make a ‘future ready’ railway by
2030
c) 100% electrification of Broad-Gauge routes to be completed by
December, 2023
d) Broad Gauge Route Kilometers (RKM) electrification to succeed
in 46,000 RKM, i.e. 72% by end of 2021
e) Western Dedicated Freight Corridor (DFC) and Eastern DFC to be
commissioned by June 2022, to bring down the logistic costs – enabling
Make in India strategy
f) Additional initiatives proposed
g) The Sonnagar-Gomoh Section (263.7 km) of Eastern DFC to
be haunted in PPP mode in 2021-22
h) Future dedicated freight corridor projects
i) East Coast corridor from Kharagpur to Vijayawada
j) East-West Corridor from Bhusaval to Kharagpur to Dankuni
k) North-South corridor from Itarsi to Vijayawada
l) Measures for passenger convenience and safety:
m) Aesthetically designed Vista Dome LHB coach on tourist routes for
better travel
n) High density network and highly utilized network routes to possess an
indigenously developed automatic train protection system, eliminating
train collision thanks to human error

VI. Urban Infrastructure

a) Raising the share of conveyance in urban areas by expansion of metro
rail network and augmentation of city bus company
b) Rs. 18,000 crore for a replacement scheme, to reinforce public bus
transport:
c) Innovative PPP models to run quite 20,000 buses
d) To boost automobile sector, provide fillip to economic process , create
employment opportunities for our youth
e) 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
 f) ‘MetroLite’ and ‘MetroNeo’ technologies to supply metro rail systems
at much lesser cost with similar experience in Tier-2 cities and
peripheral areas of Tier-1 cities.
g) Central counterpart funding to:
h) Kochi Metro Railway Phase-II of 11.5 km at a price of Rs. 1957.05
crore
i) Chennai Metro Railway Phase –II of 118.9 km at a price of Rs. 63,246
crore
j) Bengaluru Metro Railway Project Phase 2A and 2B of 58.19 km at a
price of Rs. 14,788 crore
k) Nagpur Metro Rail Project Phase-II and Nashik Metro at a price of Rs.
5,976 crore and Rs. 2,092 crore respectively
.
VII. Power Infrastructure
a) 139 Giga Watts of installed capacity and 1.41 lakh circuit km of
transmission lines added, and extra 2.8 crore households connected in
past 6 years
b) Consumers to possess alternatives to settle on the Distribution Company
for enhancing competitiveness
c) Rs. 3,05,984 crore over 5 years for a revamped, reforms-based and
result-linked new power distribution sector scheme
d) A comprehensive National Hydrogen Energy Mission 2021-22 to be
launched

VIII. Ports,Shipping,.Waterways
a) Rs. 2,000 crore worth 7 projects to be offered in PPP-mode in FY21-22
for operation of major ports
b) Indian shipping companies to urge Rs. 1624 crore worth subsidy support
over 5 years in global tenders of Ministries and CPSEs
c) To double the recycling capacity of around 4.5 Million Light
Displacement Tonne (LDT) by 2024; to get a further 1.5 lakh jobs

IX. Petroleum & Natural Gas

a) Extention of Ujjwala Scheme to hide 1 crore more beneficiaries
b) To add 100 more districts to the town Gas Distribution network in next
3 years
c) A new gas pipeline project in J&K
d) An independent Gas Transport System Operator to be found out for
facilitation and coordination of booking of carrier capacity in all-natural
gas pipelines on a non-discriminatory open access basis

X. Financial Capital
a) A single Securities Markets Code to be evolved
 b) Support for development of a world class Fin-Tech hub at the GIFT-
IFSC
c) A new permanent institutional framework to assist in development of
Bond market by purchasing investment grade debt securities both in
stressed and normal times
d) Setting up a system of Regulated Gold Exchanges: SEBI to be notified
as a regulator and Warehousing Development and regulatory agency to
be strengthened
e) To develop an investor charter as a right of all financial investors
f) Capital infusion of Rs. 1,000 crore to solar power Corporation of India
and Rs. 1,500 crore to Indian Renewable Energy Development Agency
XI. Increasing FDI in Insurance Sector
To increase the permissible FDI limit from 49% to 74% and permit foreign
ownership and control with safeguards

XII. Stressed Asset Resolution

Asset Reconstruction Company Limited and Asset Management Company to
be found out

XIII. Recapitalization of PSBs

Rs. 20,000 crore in 2021-22 to further consolidate the financial capacity of
PSBs

XIV. Deposit Insurance

a) Amendments to the DICGC Act, 1961, to assist depositors get a
simple and time-bound access to their deposits to the extent of the
deposit insurance cover
b) Minimum loan size eligible for debt recovery under the Securitisation
and Reconstruction of monetary Assets and Enforcement
of interest (SARFAESI) Act, 2002 proposed to be reduced from Rs. 50
lakh to Rs. 20 lakh for NBFCs with minimum asset size of Rs. 100 crore

XV. Company Matters

 To decriminalize the Limited Liability Partnership (LLP) Act, 2008

 Easing Compliance requirement of Small companies by revising their
definition under Companies Act, 2013 by increasing their thresholds for Paid up
capital from “not exceeding Rs. 50 Lakh” to “not exceeding Rs. 2 Crore” and
turnover from “not exceeding Rs. 2 Crore” to “not exceeding Rs. 20 Cr”.
 Promoting start-ups and innovators by incentivizing the incorporation of One
Person Companies (OPCs):

o Allowing their growth without any restrictions on paid up capital and turnover
 o Allowing their conversion into any other type of company at any time,
o Reducing the residency limit for an Indian citizen to set up an OPC from 182 days
to 120 days and
o Allowing Non Resident Indians (NRIs) to incorporate OPCs in India.

 To ensure faster resolution of cases by:

o Strengthening NCLT framework

o Implementation of e-Courts system
o Introduction of alternate methods of debt resolution and special framework for
MSMEs

 Launch of data analytics, artificial intelligence, machine learning driven MCA21

Version 3.0 in 2021-22

XVI. Disinvestment and Strategic Sale

a) Rs. 1,75,000 crore estimated receipts from disinvestment in BE 2020-
21
b) Strategic disinvestment of BPCL, Air India, Shipping Corporation of
India, Container Corporation of India, IDBI Bank, BEML, Pawan
Hans, Neelachal Ispat Nigam limited etc. to be completed in 2021-22.
c) Other than IDBI Bank, two Public Sector Banks and one
General insurance firm to be privatized
d) IPO of LIC in 2021-22
e) New policy for Strategic Disinvestment approved; CPSEs except in
four strategic areas to be privatized
f) NITI Aayog to figure out on subsequent list of CPSEs to
be haunted for strategic disinvestment
g) Incentivizing States for disinvestment of their Public Sector
Companies, using central funds
h) Special Purpose Vehicle within the sort of a corporation to monetize
idle land
i) Introducing a revised mechanism for ensuring timely closure of sick
or loss making CPSE

XVII. Government Financial Reforms

a) Treasury Single Account (TSA) System for Autonomous Bodies to be

extended for universal application
b) Separate Administrative Structure to streamline the ‘Ease of Doing
Business’ for Cooperatives

3. Inclusive Development for Aspirational India

 I. Agriculture
a) Ensured MSP at minimum 1.5 times the cost of production across all
commodities.
b) With steady increase in the procurement, payment to farmers increased as
under

(in Rs. crore)

2013-14 2019-20 20201-21

Wheat Rs.33,874 Rs.62,802 Rs.75,060

Rice Rs.63,928 Rs.1,41,930 Rs.172,752

Pulses Rs.236 Rs.8,285 Rs.10,530

a) SWAMITVA Scheme to be extended to all or any States/UTs, 1.80 lakh

property-owners in 1,241 villages have already been provided cards
b) Agricultural credit target enhanced to Rs. 16.5 lakh crore in FY22 -
farming , dairy, and fisheries to be the main target areas
c) Rural Infrastructure Development Fund to be enhanced to Rs. 40,000
crore from Rs. 30,000 crore
d) To double the Micro Irrigation Fund to Rs. 10,000 crore
e) Operation Green Scheme’ to be extended to 22 perishable products, to
spice up value addition in agriculture and allied products
f) Around 1.68 crore farmers registered and Rs. 1.14 lakh crore of trade
value administered through e-NAMs; 1,000 more mandis to be
integrated with e-NAM to bring transparency and competitiveness.
g) APMCs to urge access to the Agriculture Infrastructure Funds for
augmenting infrastructure facilities

II. Fisheries
a) Investments to develop modern fishing harbours and fish landing
centres – both marine and inland
b) 5 major fishing harbors – Kochi, Chennai, Visakhapatnam, Paradip, and
Petuaghat to be developed as hubs of economic activity
c) Multipurpose Seaweed Park in Tamil Nadu to market seaweed
cultivation

III. Migrant Workers and Labourers

 a) One Nation One card scheme for beneficiaries to say rations
anywhere within the country - migrant workers to profit the foremost
b) Scheme implementation thus far covered 86% of beneficiaries across 32
States and UTs
c) Remaining 4 states to be integrated in next few months
d) Portal to gather information on unorganized labour force, migrant
workers especially, to assist formulate schemes for them
e) Implementation of 4 labour codes underway
f) Social security benefits for gig and platform workers too
g) minimum wages and coverage under the workers State Insurance
Corporation applicable for all categories of workers
h) Women workers allowed altogether categories, including night-shifts
with adequate protection
i) Compliance burden on employers reduced with single registration and
licensing, and online returns

IV. Financial Inclusion

a) Under get up India Scheme for SCs, STs and ladies ,
b) Margin money requirement reduced to fifteen
c) To also include loans for allied agricultural activities
d) Rs. 15,700 crore budget allocation to MSME Sector, quite double of this
year’s BE

4. Reinvigorating Human Capital

I. School Education
a) 15,000 schools to be strengthened by implementing all NEP components.
Shall act as exemplar schools in their regions for mentoring others
b) 100 new Sainik Schools to be found out in partnership with NGOs/private
schools/states

II. Higher Education

a) Legislation to be introduced to setup education Commission of India as an
umbrella body with 4 separate vehicles for standard-setting, accreditation,
regulation, and funding
b) Creation of formal umbrella structure to hide all Govt. colleges,
universities, research institutions during a city for greater synergy.
c) Glue grant to implement an equivalent across cities
d) Central University to return up in Leh for accessibility of upper education
in Ladakh

III. Scheduled Castes and Scheduled Tibes Welfare

a) Unit cost of every school to be increased to Rs. 38 crore
 b) For hilly and difficult areas, to Rs. 48 crore
c) Focus on creation of strong infrastructure facilities for tribal students
d) Revamped Post Matric Scholarship Scheme for welfare of SCs
e) Rs. 35,219 crore enhanced Central Assistance for six years till 2025-2026
f) 4 crore SC students to profit

IV. Skilling
a) Proposed amendment to Apprenticeship Act to reinforce opportunities for
youth
b) Rs. 3000 crore for realignment of existing National Apprenticeship
Training Scheme (NATS) towards post-education apprenticeship, training
of graduates and diploma holders in Engineering
c) Initiatives for partnership with other countries in skilling to be taken
forward, almost like partnership
d) With UAE to benchmark skill qualifications, assessment, certification, and
deployment of certified workforce
e) With Japan for a collaborative Training Inter Training Programmed (TITP)
to transfer of skills, technique and knowledge

5.Innovation and R&D

National Research Foundation announced in July 2019 –

o Rs. 50,000 crore outlay over 5 years

o To strengthen overall research ecosystem with focus on national-priority
thrust areas
 Rs. 1,500 crore for proposed scheme to promote digital modes of payment
 National Language Translation Mission (NTLM) to make governance-and-
policy related knowledge available in major Indian languages

-CS51 to be launched by New Space India Limited (NSIL) carrying Brazil’s

Amazonia Satellite and some Indian satellites

 As part of the Gaganyaan mission activities:

o 4 Indian astronauts being trained on Generic Space Flight aspects, in
Russia
o First unmanned launch is slated for December 2021
 Rs. 4,000 crore over five years for Deep Ocean Mission survey exploration and
conservation of deep sea biodiversity.

6.Minimum Government Maximium Governance

a) Measures being undertaken to bring reforms in Tribunals to make sure speedy
justice
b) National Commission for Allied Healthcare Professionals already
introduced to make sure transparent and efficient regulation of the 56 allied
healthcare professions
c) The National Nursing and Midwifery Commission Bill introduced for an
equivalent in nursing profession
d) · Proposed Conciliation Mechanism with mandate for quick resolution of
contractual disputes with CPSEs
e) Rs. 3,768 crore allocated for first digital census within the history of India
f) · Rs. 300 crore grant to the govt of Goa for the jubilee celebrations of the
state’s liberation from Portuguese
g) · Rs. 1,000 crore for the welfare of Tea workers especially women and their
children in Assam and West Bengal through a special scheme

Fiscal Position

Item Original BE 2020- RE 2020-21 BE 2021-22

21

Expenditure 30.42 lakh crore 34.50 lakh crore 34.83 lakh crore

Capital 4.12 lakh crore 4.39 lakh crore 5.5 lakh crore
Expenditure

Fiscal Deficit(as % 9.5% 6.8%

of GDP)

a) RE for Expenditure is Rs. 34.50 lakh crore as against original BE expenditure

of Rs. 30.42 lakh crore
b) Quality of expenditure has been maintained as cost estimated as per RE is Rs.
4.39 lakh crore in 2020-2021 as against Rs. 4.12 lakh crore in BE 2020-21
c) · Estimates of Rs. 34.83 lakh crore BE for expenditure in 2021-2022 including
Rs. 5.5 lakh crore as cost , a rise of 34.5% to offer required push to economy
d) · The fiscal deficit in BE 2021-2022 is estimated to be 6.8% of GDP. The
fiscal deficit in RE 2020-21 is pegged at 9.5% of GDP - funded through
Government borrowings, multilateral borrowings, Small Saving Funds and
short term borrowings

 Gross borrowing from the marketplace for subsequent year to be around

12 lakh crore.
 Plan to continue on the trail of fiscal consolidation, achieving a fiscal
deficit level below 4.5% of GDP by 2025-2026 with a reasonably steady
decline over the amount
 It will be achieved by increasing the buoyancy of tax income through
improved compliance, and secondly, by increased receipts from
monetisation of assets, including Public Sector Enterprises and land
 Deviation Statement under Sections 4(5) and 7(3) (b) of the FRBM Act
tabled necessitated by this year’s unforeseen and unprecedented
circumstances
 Amendment to FRBM Act proposed to realize targeted Fiscal Deficit
levels

The Contingency Fund of India is to be augmented from Rs. 500

crore to Rs. 30,000 crore through Finance Bill.

Net borrowings of the state

a) Net borrowing for the states allowed at 4% of GSDP for the year 2021-
2022 as per recommendation of 15th FC
b) Part of this earmarked for incremental cost
c) Additional borrowing ceiling of 0.5% of GSDP are going to be provided
subject to conditions
d) States expected to succeed in a fiscal deficit of three of GSDP by 2023-
24, as recommended by the 15th Finance Commission

Fifteenth Finance Commission

a) The final report covering 2021-26 was submitted to the President,

retaining vertical shares of states at 41%
b) Funds to UTs of Jammu and Kashmir and Ladakh would be provided by
Centre
c) On the Commission’s recommendation, Rs. 1,18,452 crore are provided
as Revenue Deficit Grant to 17 states in 2021-22, as against Rs. 74,340
crore to 14 states in 2020-21

Tax Proposals
 Vision of a transparent, efficient tax system to promote investments and
employment in the country with minimum burden on tax payers

1. Direct Tax

Achievements

a) Corporate rate slashed to form it among rock bottom within the world
b) Burden of taxation on small taxpayers eased by increasing rebates
c) Return filers almost doubled to six .48 crore in 2020 from 3.31 crore
in 2014
d) Faceless Assessment and Faceless Appeal introduced

Relief to Senior Citizen

Exemption from filing tax returns for senior citizens over 75 years of age and
having only pension and interest income; tax to be deducted by paying bank.

Reducing Disputes, Simplifying Settlement

a) Time limit for re-opening cases reduced to three years from 6 years
b) Serious evasion cases, with evidence of concealment of income of Rs.
50 lakh or more during a year, to be re-opened only up to 10
years, approvingly of the Principal Chief Commissioner
c) Dispute Resolution Committee to be found out for taxpayers with
taxable income up to Rs. 50 lakh and disputed income up to Rs. 10
lakh
d) National Faceless tax Appellate Tribunal Centre to be established
e) Over 1 lakh taxpayers opted to settle tax disputes of over Rs. 85,000
crore through Vivad Se Vishwas Scheme until 30th January 2021

Relaxation to NRIs

Rules to be notified for removing hardships faced by NRIs regarding their

foreign retirement accounts.

Incentivizing Digital Economy

Limit of turnover for tax audit increased to Rs. 10 crore from Rs. 5 crore for
entities carrying out 95% transactions digitally.

Relief for Dividend

a) Dividend payment to REIT/ InvIT exempt from TDS

b) Advance liabilities on dividend income only after declaration/
payment of dividend
c) Deduction of tax on dividend income at lower treaty rate for
Foreign Portfolio Investors

Attracting Foreign Investment for Infrastructure

a) Infrastructure Debt Funds made eligible to boost funds by issuing

Zero Coupon Bonds
b) Relaxation of some conditions concerning prohibition on private
funding, restriction on commercial activities, and direct
investment

Supporting “Housing For AII”

a) Additional deduction of interest, up to Rs. 1.5 lakh, for loan

taken to shop for a reasonable house extended for loans taken till
March 2022
b) Tax holiday for Affordable Housing projects extended till March
2022
c) Tax exemption allowed for notified Affordable Rental Housing
Projects

Tax Incentives to IFSC in GIFT City

a) Tax holiday for capital gains from incomes of aircraft leasing

companies
b) Tax exemptions for aircraft lease rentals paid to foreign lessors
c) Tax incentive for relocating foreign funds within the IFSC
d) Tax exemption to investment division of foreign banks located in
IFSC

Ease of Filling Taxes

Details of capital gains from listed securities, dividend income,

interest from banks, etc. to be pre-filled in returns

Relief to Small Trusts

Exemption limit of annual receipt revised from ₹1 crore to ₹5 crore

for small charitable trusts running schools and hospitals

Labor Welfare
 a) Late deposit of employee’s contribution by the employer not to be
allowed as deduction to the employer
b) Eligibility for tax holiday claim for start-ups extended by one more
year
c) Capital gains exemption for investment in start-ups extended till
31st March, 2022

2. Indirect Tax

GST

 Measures taken till date:

o Nil return through SMS

o Quarterly return and monthly payment for small taxpayers
o Electronic invoice system
o Validated input tax statement
o Pre-filled editable GST return
o Staggering of returns filing
o Enhancement of capacity of GSTN system
o Use of deep analytics and AI to identify tax evaders

Custom Duty Rationalization

o Twin objectives: Promoting domestic manufacturing and helping

India catch on global value chain and export better
o 80 outdated exemptions already eliminated
o Revised, distortion-free customs structure to be put in situ from 1st
October 2021 by reviewing quite 400 old exemptions
o New customs exemptions to possess validity up to the 31st March
following two years from its issue date

Electronic and Mobile Phone Industry

 Some exemptions on parts of chargers and sub-parts of mobiles withdrawn

 Duty on some parts of mobiles revised to 2.5% from ‘nil’ rate

Iron and Steel

o Customs duty reduced uniformly to 7.5% on semis, flat, and long

products of non-alloy, alloy, and stainless steels
o Duty on steel scrap exempted up to 31st March, 2022
 o Anti-Dumping Duty (ADD) and Counter-Veiling Duty (CVD) revoked
on certain steel products
o Duty on copper scrap reduced from 5% to 2.5%

Textiles

Basic Customs Duty (BCD) on caprolactam, nylon chips and nylon fiber &
yarn reduced to 5%

Chemicals

 Calibrated customs duty rates on chemicals to encourage domestic value addition

and to remove inversions
 Duty on Naphtha reduced to 2.5%

Gold and Silver

 Custom duty on gold and silver to be rationalized

Renewable Energy

 Phased manufacturing plan for solar cells and solar panels to be notified
 Duty on solar invertors raised from 5% to 20%, and on solar lanterns from 5%
to 15% to encourage domestic production

Capital Equipment

 Tunnel boring machine to now attract a customs duty of 7.5%; and its parts a duty
of 2.5%
 Duty on certain auto parts increased to general rate of 15%

MSME Products

o Duty on steel screws and plastic builder wares increased to fifteen

o Prawn feed to draw in customs of 15% from earlier rate of fifty
o Exemption on import of duty-free items rationalized to incentivize
exporters of clothes , leather, and handicraft items
o Exemption on imports of certain quite leathers withdrawn
o Customs duty on finished synthetic gem stones raised to encourage
domestic processing

Agriculture Products
 o Customs duty on cotton increased from nil to 10% and on raw silk and
silk yarn from 10% to fifteen.
o Withdrawal of end-use based concession on denatured ethyl alcohol
o Agriculture Infrastructure and Development Cess (AIDC) on a
little number of things

Rationalization of Procedures and Easing of Compliance:

 Turant Customs initiative, a Faceless, Paperless, and Contactless

Customs measures
 New procedure for administration of Rules of Origin

Achievements and Milestones during the COVID-19 pandemic

 Pradhan Mantri Garib Kalyan Yojana (PMGKY):

o Valued at Rs. 2.76 lakh crore
o Free food grain to 80 crore people
o Free cooking gas for 8 crore families
o Direct cash to over 40 crore farmers, women, elderly, the poor and the
needy
 AatmaNirbhar Bharat package (ANB 1.0):
o Estimated at Rs. 23 lakh crore – more than 10% of GDP
 PMGKY, three ANB packages (ANB 1.0, 2.0, and 3.0), and announcements made
later were like 5 mini-budgets in themselves
 Rs. 27.1 lakh crore worth of financial impact of all three ANB packages including
RBI’s measures – amounting to more than 13% of GDP
 Structural reforms:
o One Nation One Ration Card
o Agriculture and Labour Reforms
o Redefinition of MSMEs
o Commercialisation of the Mineral Sector
o Privatisation of Public Sector Undertakings
o Production Linked Incentive Schemes
 Status of India’s fight against COVID-19:
o 2 Made-in-India vaccines – medically safeguarding citizens of India and
those of 100-plus countries against COVID-19
o 2 or more new vaccines expected soon
o Lowest death rate per million and the lowest active cases

2021 - Year of milestones for Indian history

  75th year of India’s independence
 60 years of Goa’s accession to India
 50 years of the 1971 India-Pakistan War
 Year of the 8th Census of Independent India
 India’s turn at the BRICS Presidency
 Year for Chandrayaan-3 Mission
 Haridwar MahaKumbh

Vision for AatmaNirbhar Bharat

 AatmaNirbharta – not a new idea – ancient India was self-reliant and a business
epicentre of the world
 AtmaNirbhar Bharat – an expression of 130 crore Indians who have full
confidence in their capabilities and skills
 Strengthening the Sankalp of:
o Nation First
o Doubling Farmer’s Income
o Strong Infrastructure
o Healthy India
o Good Governance
o Opportunities for Youth
o Education for All
o Women Empowerment
o Inclusive Development
 13 promises made in the Union Budget 2015-16, and resonating with the vision of
AatmaNirbharta, to materialise during the AmrutMahotsav of 2022 – on the 75th
year of our independence.

Conclusion

. Hence budgetary control in an important tool for any organization to establish a

budget for future events. It helps organization in proper utilization and control of its
resource. Budget are estimates and are based on forecast which are not certain.
Therefore the effectiveness of budgetary control depend on the availability and
quality of the forecast
BIBILOGRAPHY

www.timesofindia.com
https://www.rbi.org.in
https://economicrtimes.indiatimes.com
https://www.indiabudget.gov.in
https://www.hdfclife.com
https://www.financialexpress.com