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Budget 2021 Updates: Nirmala Sitharaman claims govt delivered on healthcare, infra; 'let down like never before,' says Chidambaram

Budget 2021: Taking a swipe at the BJP government for what he dubbed a deceptive budget, former finance minister and Congress leader P Chidambaram said that the government has failed on 9 out of 10 most important pointers on economy.

FP Staff February 01, 2021 17:48:45 IST
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Budget 2021 Updates: Nirmala Sitharaman claims govt delivered on healthcare, infra; 'let down like never before,' says Chidambaram

Nirmala Sitharaman presents Budget 2021. ANI

Highlights

16:42 (ist)

Budget 2021 LATEST Updates

Public infrastructure to benefit from foreign investment

Abhaya K Agarwal, Partner- Strategy and Transaction, Infrastructure & Government and Public Sector, EY India

The infrastructure sector is expected to get a significant boost from reforms to ease foreign investment, particularly participation of the pension funds in the infrastructure sector such as the issuance of zero-coupon bond and relaxation regarding commercial activities. Setting up of a professionally managed Development Finance Institution (DFI) will be critical for speedy launch of the National Asset Monetisation Pipeline and to fund new infrastructure projects, for which the government has allocated Rs 20,000 crore in this Budget.

The government has allocated Rs 5.54 lakh crore for capital creation in the infrastructure sector. The transport sector has received a fair share of allocation in the budget with new economic corridors being planned to boost highways and railways sector. The government has also allocated Rs 1.18 lakh crore for the roads and highways sector and Rs 18,000 crore for the public transport in this year’s budget. About 8,500 km of road and highway projects are being planned to be awarded by March 2022 including the new road corridor projects.

Railways have seen a significant allocation in this year’s Budget with a total allocation of Rs 1.1 lakh crore, mostly on the capital expenditure including the railways corridors. The National Rail Plan 2030 to create a future-ready railways system will be critical for boosting and bringing investment into the Railways sector.

 
13:42 (ist)

Budget 2021 LATEST Updates

Setting up of DFI, increased infra spend to boost Make in India, increase FDI in manufacturing

Divam Sharma, Co-Founder, Green Portfolio 

The setting up of Development Financial Institution for lending over Rs 5 lakh crores over the next 3 years to infrastructure sector is a welcome step as infra companies have been continually facing challenges in raising bank debt, high leveraged balance sheets and lesser initial interest of investors in InvITs.

Creation of government entity sponsored InvIT’s for road assets, power assets, railways assets, airports, oil and gas pipeline, warehouses, sports stadiums and then monetising them to investors will generate further interest from FPI’s and domestic institutions and will generate capital for the government to fund the increase in infra spending. This is a welcome move as the higher infra spend creates a high multiplier impact on the GDP and supports the governments initiatives to Make in India and increasing FDI in manufacturing.

Fintech is an important leg for financial inclusion and has also helped India raise a high amount of FDI in recent years. Creation of Fintech hub in GIFT ISFC will help such entities step up their activity, raise more funds, and create more collaborations for growth.

Insurance India is one of the fastest-growing Insurance markets. Insurance tech has also generated high investor interest in recent years with companies like policy bazaar, acko, digit raising high amounts of FDI. Incremental foreign capital will enhance the penetration of Insurance in India and will also gradually help in reducing the insurance cost with higher volumes.

13:29 (ist)

Budget 2021 LATEST Updates

Hope major part of 100% electrification of Railways is through RE

Somesh Kumar, Partner and Leader, Power and Utilities, EY India

The Union Budget targets 100 percent electrification of broad gauge railways to be achieved by 2023. As of August 2020, 65 percent electrification has been achieved. This is a welcome move by the government as it will reduce dependence on conventional fuels and increase efficiency. It is hoped that a significant part of this will be from renewable energy. Significant focus on asset monetisation including PGCIL and other transmission assets will enable unlocking value and also generate additional revenue for transmission companies that can hopefully be partly shared with consumers to bring down tariffs.

A revamped scheme with an outlay of over Rs 3 lakh crores would be launched for distribution turnaround through infrastructure creation and interventions such as Smart Metering, feeder separation, etc. While providing for this scheme, the Budget also puts additional pressure on DISCOMS to improve by providing the choice of suppliers to consumers through a special framework. This has been pending for a long time and is welcome and will require the separation of carriage and content.

There is an enhanced outlay for the renewable energy sector through SECI and IREDA, which will enable a a larger focus on augmenting renewable energy. In addition, a comprehensive National Hydrogen Mission to be launched to generate hydrogen from renewable sources is a welcome move. Certain initiatives for overall infrastructure sector like setting up of a Development Financial Institution for debt financing and setting up of a central asset management company for taking over stressed assets will benefit the power sector in a big way

13:04 (ist)

Budget 2021 LATEST Updates

Govt has spelt out roadmap of fiscal consolidations

Divakar Vijayasarathy, Founder and Managing Partner, DVS Advisors LLP

As expected health has been given a prominent platform and was the first pillar of the Budget speech and has increased in the allocation of around 138 percent is definitely a welcome move. There are other steps which are on the expected line - the increase in FDI limit for insurance companies from 49 percent to 74 percent was overdue. However, the response to this is to be seen since still majority in board and conditions of independent director have been stipulated.

The setting up of FDI is inevitable if the infrastructure target is to be met. Rs 5 lakh crore of debt portfolio has been set over a period of 5 years. The same might have to be increased but it’s a good start. The asset reconstruction company to buy and resolve stressed portfolio is much-needed one especially with stressed assets expected to reach 14 percent. Recapitalisation of Rs 20,000 crores seems to be on the lower side.

Permitting of a one-man company with the flexibility to convention to any other constitution definitely would support ease of doing business. Increase in Capex by around 35 percent to Rs 5.54 lakh crore but as was done in the FY20-21 the spending is expected to be over and above this limit. The fiscal deficit has been much higher than expected at 9.5 percent for 2020-21 but in the ensuing year it is estimated at 6.8 percent. More importantl,y the government has spelt the roadmap of fiscal consolidation and to achieve less than 4.5 percent of GDP by FY25-26.

10:55 (ist)

Budget 2021 LATEST Updates

Budget 2021 to revive growth vs inequality debate

With the Union budget, the never-ending debate over growth or inequality will be revived and this year this debate has acquired an even sharper edge owing to the pandemic. Rahul Gandhi has already needled the government over an Oxfam report that claims India's "top one percent owns four time more wealth than one billion of India's poor". Oxfam surveys have come under criticism in the past for their "poor methodology" but neverthleless this is more a political debate than an economic one.

The Economic Survey of India has come down heavily in favour of boosting growth to mitigate poverty, commenting that “economic growth has a far greater impact on poverty alleviation than inequality” and noting that "growth stories of India and China have shown a significant reduction in poverty due to high economic growth." This policy recommendation is predicated on the conclusion that "redistribution is only feasible in a developing economy if the size of the economic pie grows."

Nevertheless, the Economic Survey doesn't have to deal with political repercussions of policy, which is the sole prerogative of the elected government. Therefore, the finance minister must take note of the Economic Survey analysis while balancing it with political considerations. The debate will go on, but poor won't be served by debate. 

09:41 (ist)

Budget 2021 LATEST Updates

Farm innovation fund needed to support agri-tech solutions, startups, boost innovation

The agriculture sector accounts for close to 16 percent of the country's GDP, uses nearly half the available land, consumes around 80 percent of the freshwater resources, and engages almost 50 percent of the country's workforce. Approximately 70 percent of the rural households still depend primarily on agriculture, with close to 80 percent of farmers being small and marginal. Even though the recent COVID-19 pandemic has posed challenges for most sectors of the Indian economy, agriculture and allied activities demonstrated extraordinary resilience. The available statistics amplify the potential of India’s agriculture sector to aid fiscal growth. However, adherence to a traditional approach and unscientific farming methods still loom large over the agricultural space.

Budget 2021 is a window for the policymakers to actively identify and poise volumetric targets with sustainability while moving up the value chain to enhance farmer and national income.

Agricultural productivity through micro-irrigation

As of 2020, out of the 141 million hectares of cultivated land, 51 percent of the land is under irrigation and within this, only about 16 percent (11 million hectares) have access to modern irrigation technology. The government data suggest that in the year 2019-20, only 11.72 lakh hectares have been covered under micro-irrigation.  The current target is to popularize the use of micro-irrigation technology by covering additional 10 million hectares of land in five years. To achieve this ambitious target and contribute towards making the sector self-reliant, it is imperative that the government places a mechanism to ensure a smooth flow of funds, thereby ensuring adequate utilisation by the end-beneficiary.

Read more here...

LIVE NEWS and UPDATES

Feb 01, 2021 - 17:42 (IST)

Budget 2021 LATEST Updates

P Chidambaram says Budget a let down like never before

Former finance minister Chidambaram used Nirmala Sitharaman's words to turn it around and criticise what was her third Budget. Sitharaman had claimed days ahead of today's speech that this Budget would be one like never before. Chidambaram, seeking to disagree, claimed it was a monumental let down like never before. He said the government failed on two most important factors, Defence and Healthcare. He said the Budget carried zero propositions for migrant workers, salaried class and the poor who are all struggling due to the pandemic and a bleak economy. 

Feb 01, 2021 - 17:33 (IST)

Budget 2021 LATEST Updates

Maharashtra ministers accuse Centre of leaving state out of Budget allocations

The ruling Shiv Sena on Monday said Maharashtra was ignored in the Union Budget 2021-22 while its ally NCP termed the annual financial plan as "disappointing" and a move towards "privatisation".  "The Budget presented by the Central government is very disappointing. It seems a move towards privatisation. The common man has been neglected in this budget. Similarly, no concrete decision has been made for farmers," state home minister and senior NCP leader Anil Deshmukh told reporters in Nagpur.

NCP's Maharashtra chief spokesperson Mahesh Tapase said Union Finance minister Nirmala Sitharaman "used flowery words" in her Budget speech to hide the "real intention of privatisation". Tapase also said the Budget didn't provide any specific roadmap to tackle unemployment. "Defence found no mention even when China has encroached into our territory. No specific roadmap to tackle unemployment," he alleged.

Shiv Sena MP Sanjay Raut said "Maharashtra is not seen in this Budget".

Feb 01, 2021 - 17:29 (IST)

Budget 2021 LATEST Updates

Miniscule increase in health budget if you take out one-time expense on vaccine: Chidambaram

Congress leader and former finance minister P Chidambaram slammed the Union Budget as decietful and empty. He said that the government has failed to perform on Defence and Healthcare, the two core points that were crucial for India. Dismatling the claim that there has been a 137 percent increase in health spending, Chidambaram said that a one-time investment in COVID vaccine programme cannot be deemed an investment into the healthcare infrastructure. "If you take that one-time expense out, there is very little increase in the health budget," Chidambaram said. 

Feb 01, 2021 - 17:28 (IST)

Budget 2021 LATEST Updates

‘Get Well’ Budget

Nikhil Rungta, Country Manager, India, Verizon Media

This is a 'get well' budget with an expansionary outlook and focused on growth. Given the times it might not be a radical budget, but it is practical and thoughtful, which will propel the the consumption and growth of business. This Budget has also rightly signalled the need for greater inclusion in India's workforce. Women being allowed to work in all sectors and in night-shifts with adequate protection, and social security benefits extended to gig workers will provide an impetus for women to step up their contribution towards Aatmanirbhar Bharat.

Feb 01, 2021 - 17:19 (IST)

Budget 2021 LATEST Updates

Budget 2021 holds out various positives for startups

Kunal Bahl, Co-Founder and CEO, Snapdeal

Budget 2021 holds out various positives for the startup sector. The move towards providing social security benefits for gig workers will add a much-needed safety net that will help this sector grow in a sustainable way and help the many millions that are a part of it. Reducing residency requirements for founders will allow talent to flow and will boost the start-up ecosystem. Extension of tax holiday for start-ups by 1 yr, boost to digital payments, increasing threshold for small businesses to Rs 2 crore are other gains for the startup sector.

Feb 01, 2021 - 17:13 (IST)

Budget 2021 LATEST Updates

Ease in return filing aims to provide more transparency

Kapil Rana, Founder & Chairman, HostBooks

The relief to senior citizens of an age 75 years or more from filing ITR with a pension and interest income only, the period of re-assessment has been reduced to 3 years from six years in some specific cases, this will ease their burden. It will help the department in easing related burdens and will raise confidence within taxpayers allowing future growth rather than worry about past mistakes.

To woo small taxpayers a new committee has been formed known as dispute resolution committee for taxable income up to 50 Lakh and disputed income up to 10 lakh, E-assessment up to ITAT level. For businesses, the turnover limit of Tax Audit has been increased to 10 crores from 5 crores where 95 percent transactions are in digital mode and advance tax liability on dividend income arises after the declaration of dividend. By giving relaxation in Tax Audit (No tax audit up to 10 crores for business having 95 percent digital transactions), the government focuses more on digital payment to curb black money which is an interesting move.

Feb 01, 2021 - 17:01 (IST)

Budget 2021 LATEST Updates

Mamata Banerjee says Budget is 'anti-people'

West Bengal chief minister Mamata Banerjee on Monday slammed the Union Budget as "anti-people" aimed at deceiving the masses and said the BJP talks about nationalism, but in practice, they are the ones who are selling resources of the nation to the private players.

Iterating the demand for withdrawal of the new farm laws, Banerjee wondered if the Centre can waive off NPAs running into crores of rupees then why is it hesitant to write-off farm loans. "They (BJP) lectures others on nationalism, but in practice, they are the ones who are selling the nation. They are selling everything from PSUs, Insurance, railways and ports. This is a budget to deceive the masses. It's an anti-farmer, anti-people and anti-country budget," Banerjee said, while addressing the inaugural ceremony of Uttar Banga Utsav.

Feb 01, 2021 - 16:54 (IST)

Budget 2021 LATEST Updates

Healthcare, wellness given importance

RB Smarta, Managing Director, Interlink Consultancy

Overall, it is a very promising and encouraging budget for the health and wellness sector. Happy to see that health and well-being has been given due importance and noted as the first pillar of the budget. Most of our suggestions have been incorporated.

Increasing outlay by 138 percent and the focus on strengthening the healthcare infrastructure across the primary, secondary and tertiary levels is a welcome move. The investments allocated for the detection and cure of new and emerging diseases renewed thrust to Mission Poshan, skill development appropriate to the healthcare segment and commitment to meet one of the SDGs on infant mortality is commendable.

I believe all these steps combined will benefit millions of Indians and help us move ahead on the goal of ensuring healthcare access for all.

The only let down in a sense has been that while the government has increased funding and allocation, in some areas it has increased the cost of doing business. Again, given that healthcare is a largely state issue, the onus will be on the states to ensure that these allocations reap benefits. On the whole, I would give the budget a thumbs up, but resource allocation and on-ground implementation will be critical for success. I would also like to see prevention, cure and wellness being continuing themes for the budget y-o-y.

Feb 01, 2021 - 16:52 (IST)

Budget 2021 LATEST Updates

'No clue' that Centre had imposed cess on many products, says P Chidambaram

Congress leader and former Union finance minister P Chidambaram on Monday said, "Deceived those listening to the speech, especially the members of parliament who had no clue she [Sitharaman] had imposed cess on large number of products, including petrol and diesel."

Feb 01, 2021 - 16:48 (IST)

Budget 2021 LATEST Updates

Congress claims govt slashed NREGA budget by 45%

Terming the Union Budget as "directionless", the Congress on Monday said it was a case of "wrong diagnosis and prescription",  and Finance Minister Nirmala Sitharaman could have been "brave" by extending help to the poor, but chose to be "timid".

The opposition party also said that Sitharaman's speech was oblivious to the declining GDP and alleged that the budget was without a roadmap for accelerating growth and revival of consumer demand.

Union Budget 2021 LATEST Updates: Taking a swipe at the BJP government for what he dubbed a deceptive budget, former finance minister and Congress leader P Chidambaram said that the government has failed on 9 out of 10 most important pointers on economy.

On a question about the ongoing farm crisis, Finance Minister Nirmala Sitharaman said, "On Farm laws, government is and has always been open to dialogue with farmers; agriculture minister has been ready to have clause-by-clause discussion with farmers on the farm laws. Hence we believe that dialogue is the way forward."

The Budget focuses on increasing farmers' income, several measures have been taken in this direction. Farmers will be able to get loans easily. Provisions have been made to strengthen APMC markets with the help of Agriculture Infrastructure Fund, said Prime Minister Narendra Modi in his post-Budget speech.

Finance minister Nirmala Sitharaman on Monday announced highway bonanza for 4 poll-bound states in Union Budget 2021.

Finance Minister Nirmala Sitharaman said that the the fiscal deficit for the financial year 2021 is expected to be around 9.5 percent. This will drop down to a 6.8 percent of the GDP by FY 2022, she added.

Government has committed Rs 1.97 lakh crore for PLI schemes covering 13 sectors. Further 7 textile parks will be launched over three years. Sitharaman said, " A scheme of ega Investments Textile Park will be launched in addition to PLI Scheme which will create world class infrastructure with plug and play facilities to enable global champions in exports."

The Budget proposals for 2021-12 rest on six pillars — health and well-being, physical and financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D, Minimum Govt and Maximum Governance, finance minister Nirmala Sitharaman said.

The Union Cabinet meet is now over and Budget 2021 will be presented by the Finance Minister at 11 am in Parliament.

Breaking from tradition since Independence, the Union Budget will not be printed this year due to COVID-19 pandemic. Last year, the Nirmala Sitharaman had ditched the leather briefcase for a traditional "bahi khaata" — or red, handmade ledger.

Indian indices opened nearly a percent higher on Monday as investors kept an eye on the Budget 2021 to be tabled in the parliament by Finance Minister Nirmala Sitharaman later today.

The Budget is widely expected to focus on increasing spending on creation of jobs and rural development, generous allocations for development schemes, handing more money to the common man and easing rules to attract foreign investments.

All eyes are on Finance Minister Nirmala Sitharaman, who will be presenting the Budget in Parliament at 11 am today (Monday). This will be the ninth consecutive annual budget presented before the country by the Narendra Modi government.

In the face of a slew of challenges ranging from a once-in-a-century pandemic, ensuing job losses, resentment among farmers and friction with neighbours, many expect Sitharaman to announce generous public spending but also make tough choices given a mountain of debt.

Earlier in January, Finance Minister Nirmala Sitharaman had said that the budget for the FY2021 beginning April will be "like never before". In a significant break from tradition owing to the novel coronavirus , this year's financial statement will be completely paperless.

Sitharaman has also launched the "Union Budget Mobile App" for hassle-free access of Budget-related documents by Members of Parliament (MPs) and the public.

Meanwhile, India's gross domestic product (GDP) contracted by 23.9 percent in the first quarter of the financial year and as per the World Bank, the economy is estimated to contract by 9.6 percent in FY21, reflecting a sharp drop in household spending and private investment.

Since the last Budget, the size of the Indian economy has reduced from Rs 2.24 lakh crore nominal GDP considered in the FY2021 Budget to Rs 1.94 lakh crore.

However, the World Bank projected economic growth to recover to 5.4 percent this year.

It is important to note that the country's economy found itself caught up in a recessionary phase owing to the pandemic and the subsequent nationwide lockdown.

With inputs from agencies

Updated Date:

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