Dinesh Kumar Khara , presented in Parliament by FM Nirmala Sitharamana,
Announcements made in Budget 2021 aim to give more prominence to AtamNirbhar Bharat. It includes important things like doubling farmers’ income, strong infrastructure, healthy India, good governance, opportunities for youth, education for all, women empowerment, and inclusive growth.
Union Finance Minister, Budget 2021-22 is historic as it gives new vision and roadmap to take physical and financial infrastructure to heights. . We can also call it ‘Infrastructure Budget’. Expanding the role of the central government, Rs 5.54 lakh crore will be made available in the budget proposals by an increase of 34.5 per cent compared to the capital expenditure of 2020-2021. This will give impetus to increase demand.
Self-reliant India’s cause has been given prominence
Budget announcements aim to give greater prominence to AtamNirbhar Bharat, including doubling farmers’ income, strong infrastructure, healthy India, good governance, opportunities for youth, education for all , Women empowerment, and inclusive development. In recent times, due to the spread of Coronavirus Pandemic and the impact on a large number of people, full attention has been paid to the health sector. In this connection, the Prime Minister’s Self-Reliant Healthy India Scheme has been launched.
central government has given attention to the issue of infrastructure financing. Under the Bharatmala Project, National Rail Scheme for India, roads, infrastructure like metro rail in Tier-1 and Tier-2 cities and operational management of major ports on PPP basis. Has mobilized resources for construction. Attention has been given to the viability of distribution companies, which they also need. Issues related to infrastructure financing have also been given due attention. The way for foreign participation has been opened through loan components, assets monetization, and invites and REITs. In order to provide funds in terms of infrastructure, it is proposed to issue ‘Zero Coupon Bonds’ issued by the notified IDF in the direction of Tax Benefits.
34% increase in capital expenditure
has been taken to create National Development Financial Institution to overcome the problem of debt for financing infrastructure. Along with giving more importance to the infrastructure, the budget proposals will provide Rs 5.54 lakh crore by a 34.5 per cent increase over the capital expenditure of 2020-2021. In terms of financial infrastructure, the proposal of the Securities Markets Code is a good move, replacing the many functions that govern the segments of the financial market.
will be NPA through ARC-AMC
The role of equity capital in the Consolidated Financial Sector has been recognized in the budget. According to this, the FDI limit in insurance companies has been increased from 49 percent to 74 percent tax (FDI Limit Increased). There will be a capital infusion of Rs 20,000 crore in public sector banks (PSBs). Asset Reconstruction Company Limited (ARC) and Asset Management Company (AMC) will be set up to consolidate existing stressed debts (NPAs). Also, this will prevent capital loss in future. These steps will ensure healthy competition, fair prices and cash collection.
Rating agencies will also like to take some steps
Under the assumption of 14.4 per cent growth in the country’s GDP, the fiscal deficit is estimated to be 6.8 per cent of GDP in FY 2021-2022. The gross borrowing from the market for the next year will be around Rs 12 lakh crore. In principle, the budget has rationalized off-balance sheet borrowings and fiscal deficits, which markets and rating agencies will also like. The tax has been retained at an earlier level with spending announcements in the budget. This situation will definitely affect the sentiments of the market.
balanced demand stimulus seen in budget, to bring
fiscal deficit levels to below 4.5% of GDP by FY25-25 Has been estimated Measures such as better compliance and demonetisation of government property will increase tax revenue. This includes public sector undertakings (PSUs), land and strategic disinvestment. Overall, it can be said that given the backdrop of the corona virus epidemic, Budget 2021-22 has found a balanced demand stimulus path to improve the output gap.