Budget 2021: A much-needed pill for ailing economy; new agri-infra cess to help modernise agriculture sector

By | February 3, 2021

Finances 2021: A much-needed capsule for ailing financial system; new agri-infra cess to assist modernise agriculture sector

Union Budget 2021The Authorities has additionally proposed the levy of an Agricultural Infrastructure Improvement Cess on sure restricted items to assist modernise the agricultural sector

By Gunjan Prabhakaran

Union Finances 2021: After being battered by the Covid-19 induced lockdowns and shutdowns, Union Finances 2021 was largely anticipated to reaffirm the Authorities’s dedication to the financial system and sign an period of restoration and steadfast improvement within the nation.

With all eyes on the funds, not simply domestically however internationally as effectively, the Hon’ble Union Finance Minister, Ms. Nirmala Sitharaman, introduced the much-anticipated funds for the Fiscal yr 2021-22. From the very starting, she reiterated the Authorities’s dedication to attaining the USD 5 trillion milestones and conveyed that the funds proposals relaxation on 6 necessary pillars viz.

1. Well being & Wellbeing
2. Bodily and Monetary Capital and Infrastructure
3. Inclusive improvement for Aspirational India
4. Reinvigorating human capital
5. Innovation and R&D
6. Minimal Authorities – Most Governance

Below every of those broad focus areas (pillars), the FM proceeded to elucidate her proposals and the funding allotted for every measure, guaranteeing that each essential facet of the financial system is addressed.

With an emphasis on the implementation of Pradhan Mantri Atmanirbhar Swasth Bharat Yojna along with the Nationwide Well being Mission, the Authorities has signalled to strengthen the nation’s healthcare infrastructure and have a tendency to the general care and well-being of the residents together with measures to assist overcome the pandemic.

With a long-term imaginative and prescient of creating India a worldwide funding vacation spot, the Authorities allotted a Capex spending of INR 5.54 lakh crores within the Fiscal Yr (34% enhance over the earlier yr) to develop infrastructure. Out of this INR 1.97 lakh crores over 5 years shall be earmarked for Productiveness Linked Incentive Schemes (PLIs).

The Authorities has additionally introduced a slew of measures together with organising of seven Mega-Funding Textile parks with world-class infrastructure to advertise the textile business and organising of a Improvement Monetary Establishment, monetisation of belongings of NHAI, PGCIL, GAIL, IOCL and HPCL, launch of Hydrogen Vitality Mission and administration of Ports underneath the PPP Mannequin and so on, that are all aimed on the improvement of bodily and monetary infrastructure within the nation.

Measures to advertise agriculture and allied sectors and to assist migrant labourers by way of upskilling and coaching have additionally been proposed, and allocations to the tune of INR 40,000 crores to the Rural Infrastructure Improvement Fund and INR 5,000 crore to the Micro-Irrigation fund have been made on this regard.

With regard to tax measures, the Authorities supplied reduction from earnings tax to senior residents aged over 75 years with solely pension earnings. Despite the fact that some earnings tax reduction was sought by salaried taxpayers, they ended up getting the quick finish of the stick on this funds as effectively.
On an administrative entrance, provisions regarding assessments and proceedings have been relaxed to offer reduction to small taxpayers who have been present process extreme hardships resulting from extended hearings and investigations.

On an oblique tax entrance, the funds proposed rationalisation of Customs Duties in a bid to advertise home manufacturing by lowering duties on inputs and growing duties on completed items. Numerous sectors starting from metals and mining, textiles, vehicles, and renewable vitality have been coated underneath these measures.

Along with the above, the Authorities has additionally proposed the levy of an Agricultural Infrastructure Improvement Cess on sure restricted items to assist modernise the agricultural sector and supply the much-needed infrastructure to spice up manufacturing and distribution.
On ease of compliance, amendments have been proposed to take away the requirement for GST Audit in favour of self-certification and larger powers have been conferred on the tax authorities for efficient and environment friendly tax administration.

General, the funds is all-encompassing and progressive, paving the best way for a resilient financial system.

(Gunjan Prabhakaran is Companion & Chief – Oblique Tax, BDO India. Views expressed are the creator’s personal.)

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