Union Finance Minister Nirmala Sitharaman delivered her third Budget in Lok Sabha on Monday, February 1. Nirmala Sitharaman has presented the Union Budget 2021-22 in Parliament. She announced foreign direct investment (FDI) hike in insurance to 74 per cent from 49 per cent with foreign control under safeguards. The Finance Minister has set a target of Rs. 16.5 lakh crore as agricultural credit. With no changes in personal income tax slabs and a slew of hike in customs duty to benefit Make in India, the Budget speech focussed on Centre's Atmanirbhar Bharat vision.
In significant changes to the taxation process, Sitharaman announced the scrapping of income tax for senior citizens under certain conditions, new rules for removal of double taxation for NRIs, and a reduction in the time period of tax assessments among other measures. Startups will get an extension in their tax holiday for an additional year. Sitharaman also announced that the advance tax liability on dividend income shall arise after declaration of payment of dividend.
"The total impact of Atmanirbhar Bharat and measures by RBI was Rs. 27.1 lakh crore, which amounts to 30 per cent of GDP," Ms Sitharaman said. "2021 is a year of many milestones," she said.
In her speech, Sitharaman announced that India’s fiscal deficit is set to jump to 9.5 per cent of Gross Domestic Product in 2020-21 as per Revised Estimates. This is sharply higher than 3.5 per cent of GDP that was projected in the Budget Estimates. A slump in government revenues amid the Covid-19 pandemic has led to a sharp rise in deficit and market borrowing.
In health care spending, Sitharaman announced a total spend of around Rs 2 lakh crore on healthcare with Rs 35,000 crore on Covid-19 vaccine development and innoculation.
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