Mon, 01 February 2021
LIVE Huge allocation for PM's pet Swamitva scheme
21:18 Huge allocation for PM's pet Swamitva scheme
The allocation to the panchayati raj ministry for the year 2021-22 increased by more than 32 per cent to Rs 913.43 crore in the Union Budget presented by Finance Minister Nirmala Sitharaman on Monday, compared to the revised expenditure during the current financial year.
The major jump in the allocation was seen in the Svamitva scheme, which more than doubled to Rs 200 crore from Rs 79.65 crore in the current fiscal.
The Svamitva scheme was launched by Prime Minister Narendra Modi in the last calendar year. It aims to provide the record of rights to village household owners in rural areas and issuance of property cards. It also enables monetisation of rural residential assets for credit and other financial services.
As per the detailed financial statement, Rs 913.43 crore has been allocated to the panchayati raj ministry for the year 2021-22, compared to the revised estimate of Rs 690 crore for the fiscal 2020-21. However, the budget estimate for the current fiscal was Rs 900.94 crore.
The government also increased allocation to the Rashtriya Gram Swaraj Abhiyaan by nearly 19 per cent to Rs 593 crore for the next fiscal from Rs 499.94 crore this fiscal.
19:01 Govt departments to add over 1.4 lakh jobs
Over 1.4 lakh jobs are estimated to be created between March 2019 and March 2021 in various central government departments, according to the Union Budget presented on Monday.
The strength of government establishments was 32,71,113 as on March 1, 2019, which is estimated to increase to 34,14,226 by the first day of next month an increase of 1,43,113, it said.
The budget documents have given a break-up of the jobs estimated to be created in central government departments between 2019 and March 2021.
As many as 2,207 jobs are estimated to be created between March 2019 and March 2021 in the department of agriculture, cooperation and farmers' welfare. Its actual strength of 3,619 as on March 1, 2019, has been estimated to be increased to 5,826 by March 1, this year.
Similarly, 1,058 jobs are estimated to be created in the ministry of civil aviation by the beginning of next month. Its actual strength of 1,254 on March 1, 2019, would increase to 2,312 by March 1, 2021, it said.
As many as 12,537 new civil jobs are likely to be created in the defence ministry. Its strength was 80,463 in March 2019 and is estimated to increase to 93,000 by March 1, 2021.
16:45 Moody's has doubts on Budget meeting targets
Moody's Investors Service, while silent on the sovereign rating on the higher-than-expected fiscal deficit numbers, expressed doubts over attaining the higher revenue targets and divestment realisation as assumed in the Budget.
The Union Budget 2021-22 has pegged a fiscal deficit of 9.5 per cent for the current financial year as against the consensus 7 per cent, and 6.8 per cent for 2021-22 with a market borrowing of around Rs 12 lakh crore.
It also assumes Rs 1.75 lakh crore to be scooped up from divestment.
The Fiscal Responsibility and Budget Management Act will also be amended to achieve a fiscal deficit of 4.5 per cent of GDP by 2025-26 only.
"The fiscal deficit target of 6.8 per cent for 2021-22 tries to strike a balance between supporting growth and a modest deficit reduction, but improvements in tax compliance and monetisation targets may be difficult to achieve," the rating agency said in a note.
The note was authored by Moody's Associate Managing Director (Sovereign Risk) Gene Fang and its Vice-President and Senior Credit Officer (Financial Institutions) Alka Anbarasu.
15:32 When Sitharaman quoted Thiruvalluvar
During her third Budget presentation, Finance Minister Nirmala Sitharaman on Monday quoted a Tamil couplet from the classic Thirukkural written by Tamil poet and philosopher Thiruvalluvar, mentioning the quality of a good king.
"A king/ruler is the one who creates and acquires wealth, protects and distributes it for common good," Sitharaman said while quoting from the Thirukkural before announcing her proposal for direct taxes.
This was the second time Sitharaman has quoted Thiruvalluvar.
During the presentation of Budget last year, she quoted Thiruvalluvar's couplet on the 'five jewels' required by a good country.
For every rupee in the government coffer, 53 paise will come from direct and indirect taxes, 36 paise from borrowings and other liabilities, 6 paise from non-tax revenue like disinvestment and 5 paise from non-debt capital receipts.
According to the Union Budget 2021-22 presented in Parliament by Finance Minister Nirmala Sitharaman on Monday, goods and services tax will contribute 15 paise in every rupee revenue, while corporation tax will contribute 13 paise to each rupee earned.
The government is also looking to earn 8 paise for every rupee from Union excise duty and 3 paise from customs duty.
While income tax will yield 14 paise to every rupee collection, the collection from borrowings and other liabilities will be 36 paise, as per Budget 2020-21.
On the expenditure side, the biggest outlay component is interest payments at 20 paise for every rupee, followed by the states' share of taxes and duties at 16 paise.
Allocation for defence stood at 8 paise.
Expenditure on central sector schemes will be 14 paise, while the allocation for centrally-sponsored schemes will be 9 paise.
The expenditure on Finance Commission and other transfers is pegged at 10 paise. Subsidies and pension would account for 8 paise and 5 paise, respectively, in each rupee spending.
The government will spend 10 paise in every rupee on 'other expenditures'.
14:52 Swachh Bharat 2.0 gets Rs 141,678 cr
Union Finance Minister Nirmala Sitharaman on Monday announced that the central government is allocating Rs 1,41,678 crores for Swachh Bharat 2.0.
She also announced an outlay of Rs 2,217 crores for 42 urban centers with a million-plus population, to tackle the burgeoning problem of air pollution.
Presenting the Union Budget 2021-22, Sitharaman said, "Under the 'Swaccha Bharat and Swasthya Bharat', for 'swacchta' of urban India, we intend to focus on complete fecal sludge management and wastewater treatment. Source segregation of garbage, reduction in single-use plastic and air pollution, by effectively managing waste from construction and demolition activities and bioremediation of all legacy dump sites."
"The Urban Swachh Bharat mission 2.0 will be implemented with a total financial allocation of Rs 1,41,678 crores over a period of five years from 2021," she informed.
Sitharaman further announced, "To tackle the burgeoning problem of air pollution, I propose to provide an amount of Rs 2,217 crores for 42 urban centers with a million-plus population in this budget."
14:24 Defence gets a hike, to Rs 3.62 lakh cr
The ministry of defence has been allocated Rs 4,78,195.62 crores in Budget 2021. Excluding pensions, it is pegged at Rs 3.62 lakh crore, up from last year's Rs 3.37 lakh crore.
The ministry of home affairs has been allocated Rs 1,66,546.94 crores.
14:13 Tax relief extended on affordable housing
Finance Minister Nirmala Sitharaman on Monday gave a boost to the housing sector and home-buyers and proposed to extend exemption available for the purchase of affordable houses and to provide tax exemption for affordable rental housing projects.
"This government sees housing for all and affordable housing as priority areas. In July 2019 Budget, I provided an additional deduction of interest amounting to Rs 1.5 lakh for a loan taken to purchase an affordable house. I propose to extend the eligibility of this condition by one more year to 31st March 2022," Sitharaman said in her Budget speech.
The additional deduction of 1.5 lakh shall therefore be available for loans taken up to March 31, 2022, for the purchase of the affordable housing, Sitharaman said.
"Further to keep up the supplies of affordable houses, I propose that the affordable housing projects can avail a tax holiday for one more year till 31st March 2022," she added.
Sitharaman further said that the central government is committed to promoting affordable rental housing for migrant workers.
"We are committed to promoting affordable rental housing for migrant workers. For this. I propose to allow tax exemption for notified rental housing project," she added.
13:57 100% agri infra cess imposed on alcohol
Finance Minister Nirmala Sitharaman on Monday imposed an agri infra cess of 100% on alcoholic beverages in Budget 2021.
Further, an agri infra cess of 2.5% was also imposed on gold, silver and dore bars; 35% on apples; 5% on specified fertiliser; 1.5% on coal, lignite and peat.
Agri infra cess of 30% was also imposed on kabuli chana, 10% on peas, 50% on bengal gram/chick peas, 20% on lentil (mosur); and 5% on cotton.
13:34 Import duty raised on mobile phone parts
The government on Monday proposed to impose import duty on components of mobile phones and chargers, to enhance local value addition.
Finance Minister Nirmala Sitharaman announced review of 400 exemptions in customs duty including those applicable on the mobile devices segment.
"For greater domestic value addition, we are withdrawing a few exemptions on part of chargers and sub-parts of mobiles. Further, some parts of mobile rate will move from nil rate to moderate 2.5 per cent," Sitharaman said.
She added that the custom duty policy must have twin objectives of promoting domestic manufacturing and helping India get on to global value chain and export better.
"The thrust now has to be on easy access to raw materials and exports of value addition," Sitharaman said.
13:31 Custom duty on gold, silver rationalised
Reducing customs duty uniformly to 7.5% on semis, flux & long products of non-alloy, alloy & stainless steel. To provide relief to metal recyclers, mostly MSMEs, I'm exempting duty on steel scrap up to 31st March 2022. I am also revoking ADD & CBD on certain steel products, FM Sitharaman announced in Budget.
'Gold and silver presently attract a basic customs duty of 12.5%. Since the duty was raised from 10% in July 2019, prices of precious metals have risen sharply. To bring it closer to previous levels, we are rationalising custom duty on gold and silver.'
'Consequent to imposition of Agriculture Infrastructure and Development Cess (AIDC) on petrol and diesel, basic excise duty (BED) and Special Additional Excise Duty (SAED) rates have been reduced on them so that overall consumer does not bear any additional burden. Consequently, unbranded petrol and diesel will attract basic excise duty of Rs 1.4, and Rs 1.8 per litre respectively. The SAED on unbranded petrol and diesel shall be Rs 11 and Rs 8 per litre respectively. Similar changes have also been made for branded petrol and diesel.'
'Domestic electronic manufacturing has grown rapidly. For greater domestic value addition we're withdrawing a few exemptions on part of chargers & sub-parts of mobiles. Further some parts of mobiles will move from nil rate to a moderate 2.5%, Sitharaman said in her Budget speech.
13:05 2020-21 fisc deficit pegged at huge 9.5%
Finance Minister Nirmala Sitharaman on Monday said the government estimates fiscal deficit of 6.8 per cent of the gross domestic product (GDP) in the next financial year beginning April 1.
However, the fiscal deficit in 2020-21 is estimated to soar up to 9.5 per cent due to rise in expenditure on account of the outbreak of Covid-19 and moderation in revenue during this fiscal year.
The lockdown to check the spread of virus adversely impacted the economic activities resulting in contraction in the economy by an estimated 7.7 per cent.
For the current fiscal year, the government had earlier pegged the fiscal deficit of 3.5 per cent.
While unveiling the Budget 2021-22 in the Lok Sabha, the finance minister said, the government proposes to bring down the fiscal deficit below 4.5 per cent of GDP by 2025-26.
Fiscal deficit is an indication of the government's borrowing to meet the shortfall between expenditure and receipts from taxes and other sources.
The deficit had soared to a high of 4.6 per cent of the GDP in 2019-20, mainly due to poor revenue realisation.
The finance minister said the government plans to borrow Rs 80,000 crore during the residual two months of the current fiscal year.
12:35 Rs 3,726 cr allocated for first digital census
Other announcements made by FM Sitharaman:
Deep ocean mission with outlay of more than Rs 4,000 cr over five years proposed.
Rs 3,726 cr allocated for forthcoming Census, which will be the first digital census.
Conciliatory mechanism to be set up for quick resolution of contractual disputes.
12:22 Capital base of small companies raised to Rs 2 crores
Other announcements made by FM Sitharaman:
Definition of small companies to be revised by raising capital base to Rs 2 cr from current limit of Rs 50 lakh.
Agri infra fund would be made available to APMCs to augment infrastructure facilities.
Agriculture credit target raised to Rs 16.5 lakh cr in 2021-22.
12:14 Govt to sell stake in 2 banks, 1 insurer
Barring four strategic areas, PSUs in other sectors will be divested, says FM announcing the government's new disinvestment policy.
Two PSBs and one general insurance company to be divested, legislations amendments to be introduced in this session.
FM says NITI Aayog to be asked to work on the next list of central public sector companies for disinvestment.
Disinvestment receipts put at Rs 1.75 lakh cr for fiscal year beginning April 1, 2021.
BPCL, Air India, Shipping Corp, Container Corp and other disinvestments will be completed in 2021-22, announces FM Sitharaman.
12:08 Rs 20,000 cr for recapitalisation of public sector banks
Other announcements made by FM Sitharaman are:
Asset reconstruction and management company to be set up for stressed assets of banks.
FDI in insurance increased to 74 pc from 49 pc.
Government proposes further recapitalisation of State-owned banks; earmarks Rs 20,000 crore.
Free cooking gas LPG scheme Ujjwala to be extended to 1 cr more beneficiaries.
Scheme of Mega Investment Textile Parks to be launched, in addition to PLI scheme, to create world class infra in textile sector, with plug-and-play facilities, to create global export champions. 7 textile parks to be set up over 3 years
12:05 Sensex, Nifty give thumbs-up to Budget
As the finance minister continues her Budget speech, the markets have responded favourably to what she has said so far and the direction in which the announcements are heading.
In intra-day deals at noon, the BSE Sensex has gone up by 917 points to 47,216 points, while Nifty went up by 261 points to 13,896 points.
11:57 Consumers can choose from more than one electricity provider
Other announcements made by FM Sitharaman are:
7 port projects worth more than Rs 2,000 cr via PPA mode.
100 pc electrification of broad gauge rail tracks by December 2023.
Rs 18,000 cr scheme to augment public transport in urban areas.
City gas distribution network of providing CNG to automobiles and piped cooking gas to households in 100 more districts.
Framework will be put in place to allow electricity consumers to choose from more than one distribution company.
11:55 Rs 25,000cr for poll-bound Bengal's roads
Over 13,000 km length of roads at a cost of Rs 3.3 lakh cr has already been awarded under Rs 5.35 lakh cr Bharatmala project of which 3,800 kms have been constructed. By March 2022 we'd be awarding another 8,500 km and complete an additional 11,000 km of National Highway Corridor, says FM Sitharaman.
She allocates Rs 65,000 cr for road, highway projects in Kerala, and Rs 3,400 cr for Assam, and Rs 25,000 cr for road projects in poll-bound West Bengal.
11:42 Pipelines of GAIL, IOC and HPCL to be monetised
Other allocations/announcements made by Finance Minister Sitharaman are:
PLI scheme with outlay of Rs 1.97 lakh crore for 5 years starting this fiscal. A scheme of mega investment textiles park in addition to PLI scheme will be launched.
Government to introduce bill to set up development financial institution with an outlay of Rs 20,000 cr.
National monetisation pipeline for potential brownfield infrastructure assets will be launched.
Pipelines of GAIL (India) Ltd, Indian Oil Corp (IOC) and HPCL will be monetised.
Railway to monetise dedicated freight corridors.
Voluntary vehicle scrapping policy to phase out old vehicles; fitness tests after 20 yrs for personal vehicles.
11:33 Rs 64,180 cr for Aatmanirbhar health programme
Other allocations announced by Finance Minister Sitharaman include:
Introduction of Aatmanirbhar health programme with an outlay of Rs 64,180 cr; this in addition to the national health mission.
Swachh Bharat 2.0 will be implemented with outlay of Rs 1,41,678 cr over 5 years.
Jal Jeevan mission with outlay of Rs 2.87 lakh crore for 4,378 urban local bodies.
11:25 Budget 2021 rests on 6 pillars, says Sitharaman
The Budget 2021 proposals 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 government, maximum governance
11:16 Dawn of a new era: FM quotes Tagore
Finance Minister Sitharaman recalls the words of Tagore in her speech: "Faith is the bird that feels the light and sings when the dawn is still dark," she says, adding that this moment in history is the dawn of a new era, where India is well-poised to be the land of promise and hope.
11:13 Budget prepared in never-before circumstances: FM
The preparation of this Budget was undertaken in circumstances like never before, in view of calamities that have affected a country or a region within a country. But what we have endured with Covid-19 in 2020 is Sui generis: FM Sitharaman.
11:11 Rs 27.1 lakh cr spent in mini-budgets: FM
The PM Garib Kalyan Yojana, the three Aatma Nirbhar Bharat packages and subsequent announcements were like five mini-budgets in themselves. The total financial impact of all Aatma Nirbhar Bharat packages, including measures taken by RBI, was about 27.1 lakh crore, or more than 13% of GDP, says FM Sitharaman.
11:08 FM recalls Covid Warriors' contribution during the year
Finance Minister Sitharaman begins her Budget2021 speech by recounting the unprecedented circumstances through which the nation and the world had to go through and recognising the service rendered by Covid Warriors during the crucial months of the pandemic.
11:01 FM Sitharaman begins her Budget speech
Finance Minister Nirmala Sitharaman has begun her Budget speech, her third in succession, in Parliament.
All eyes are on what exactly the FM will announce today, to revive the economy that has been battered by the coronavirus pandemic.
Prime Minister Narendra Modi had on Friday said Finance Minister Nirmala Sitharaman had to give four-five mini-budgets in the form of packages in 2020 and expressed confidence that the upcoming Budget would also be seen as part of that series.
Over to the finance minister.
10:56 Key numbers to watch from Sitharaman today
Finance Minister Nirmala Sitharaman will be presenting her third Budget in a short while from now.
Here are the key numbers to watch out for in the Budget for 2021-22, which is widely expected to be a "economic vaccine" for the pandemic-battered economy.
Sitharaman, who had in her first budget in 2019 replaced leather briefcase -- which had been in use for decades for carrying budget documents -- with a traditional red cloth bahi-khata, had last month stated that the budget for the fiscal year 2021-22 will be "like never before".
* Covid-19 spending: India has started the world's largest Covid inoculation programme from January 16 and is using two vaccines Covishield and Covaxin. The expenditure on vaccination this fiscal as well as in the next would be the most watched figures in the Budget.
* Fiscal Deficit -- The budgeted fiscal deficit, which is the difference between government expenditure and income, was 3.5 per cent for current fiscal ending March 31.However, the revised number would over-shoot this by a large margin due to the fiscal stimulus given to support the economy following Covid-19 outbreak. The number for 2021-22 fiscal would be in focus.
* Borrowing -- The borrowing has already been hiked to Rs 12 lakh crore, from earlier budgeted Rs 7.8 lakh crore, to make good both tax and disinvestment revenue shortfall. Next fiscal's borrowing, especially on the back of expected higher capital expenditures to boost growth, would have to be keenly watched out.
* Tax revenue -- With an estimated 7.7 per cent economic contraction this fiscal, the 12 per cent growth projected in tax revenues at Rs 24.23 lakh crore for 2020-21 for current fiscal is difficult to meet.
* Disinvestment receipts -- The record Rs 2.10 lakh crore CPSE stake sale target would be missed by a wide margin this fiscal with just Rs 19,499 crore raised so far. However, the silver lining is that privatisation process of at least 7 CPSEs, including Bharat Petroleum (BPCL), Air India, BEML, Shipping Corporation of India (SCI) and Pawan Hans has already started.
* Capital Expenditure -- The government's planned capital expenditure for this fiscal was over Rs 4.12 lakh crore. With the Economic Survey calling for an "expansionary fiscal stance" to ensure a 'V'-shaped recovery and clock 11 per cent growth in 2021-22 fiscal, the expenditure number would hog the limelight.
Finance Minister Nirmala Sitharaman
10:42 All eyes on what Sitharaman will do today
Finance Minister Nirmala Sitharaman on Monday called on President Ram Nath Kovind before presenting the Union Budget 2021-22.
As per established tradition, the finance minister met the President at Rashtrapati Bhawan before heading to Parliament.
While traditionally, copies of the Budget are brought to the Parliament complex before finance minister arrives, this year no document has been printed following the Covid-19 protocol.
Instead, the Budget copies will be disseminated electronically, with documents being uploaded on the government website as well as being made available on a special app developed for the same.
Expectations are running high as Sitharaman presents her third budget in the Lok Sabha today. She has her task cut out to fire up a pandemic battered economy and revive the animal instinct in it.
Dressed in a red silk saree with off-white detailing and golden border, Sitharaman continued with the tradition she set in 2019 carrying the budget speech in a bahi-khata, which she used ditching the briefcase. She was seen holding a red bahi khata.
On the first day of the budget session of Parliament, Sitharaman on Friday tabled the pre-budget Economic Survey for 2020-21, which projected a 'V'-shaped recovery for the economy in the next financial year.
The economy is projected to contract by 7.7 per cent in the current fiscal ending March 31, 2021and expanding by 11 per cent in the next.