Union Budget 2021 | Key Highlights and Analysis | ETMONEY

On 1st February 2021, the Finance Minister Nirmala Sitharaman presented the Government of India’s Union Budget for 2021-22. This budget was truly significant as it came in the backdrop of a contracted Indian economy (a first in four decades) due to the disruption caused by the coronavirus pandemic. The government’s budget had to not only repair, restore and rebuild India’s finances but renew the faith of the citizens of India & show a pathway to progress.

What’s covered in this video?
00:00 Introduction
01:13 Healthcare and Wellness
02:09 Growth and Investment Drivers
05:22 Balancing the Books
07:47 Taxes
10:46 ETMONEY Opinion

Here are some major announcements and highlights of the Union Budget 2021-22

👉 HEALTHCARE AND WELLNESS

► The budget allocated ₹2,83,000 crores to the healthcare and wellness sector
► The plan of action allowed for the setting up on almost 30,000 rural and urban health and wellness centres
► The finance minister also allocated ₹35,000 crores for the Covid-19 vaccine with a commitment of providing additional funds if required.

👉 GROWTH & INVESTMENT DRIVERS

The finance minister reinforced the government’s commitment towards building an Aatmanirbhar Bharat with an expansionary budget aimed at boosting capital expenditure, increasing spending and providing greater employment opportunities.

Major announcements in Infrastructure:
► Public-Private partnership mode in major ports
► More projects under National Infrastructure Pipeline
► Public transport outlay of ₹18,000 crores
► Build Metrolite and related technology in Tier 2 cities
► ₹1,00,000 crores allocated to build 11,000 kilometers of the national highway corridor.

Major announcements in Manufacturing:
► Creation of 7 mega textile parks
► Production Linked Incentive scheme or PLI for large-scale electronics manufacturing which aims to make India a global hub for manufacturing and exports

Net net, the government’s capital expenditure for FY22 is quite generous at ₹5.54 lakh crores which is a good 35% higher than last year.

Major announcements in Investments:
► The increase in FDI from the current 49% to 74% in insurance companies
► Public sector bank recapitalization of ₹20,000 crores has been proposed for FY22
► Setting up of a Development Finance Institution

👉 BALANCING THE BOOKS & THE FISCAL DEFICIT

On a macro level, the country’s fiscal deficit is estimated at 9.5% of GDP for FY21 i.e. the period between April 2020 and March 2021. For FY22, the finance minister estimates a fiscal deficit of 6.8% with a projection of steadily reducing it to below 4.5% by 2025-26

How is the government managing the fiscal deficit for FY22?
► Borrowing of ₹12,00,000 crores
► Strategic divestment of 2 public sector banks and 1 general insurance company.
► Initial Public Offering (IPO) of LIC of India
► Sale of Air India and BPCL
► Sale of non-core assets like surplus land

All put together, the government has a divestment target of ₹1,75,000 crores for FY22

👉 TAXES

There are no major changes in the direct taxes

The focus is this budget was on improving the tax experience via:
► Extending the Vivad se vishwas scheme until 28th Feb 2021
► Reduction in tax assessment reopening from 6 to 3 years
► Lower litigation with small tax payers
► Increase tax audit limits

Further, in a relief to senior citizens aged 75 years and over who have only pension and interest income, the budget has waived off their income tax returns filing requirement.

Some relaxation has been provided to NRIs in terms of removing double taxation hardships. And in the same thread, foreign investors too will benefit from a lower treaty rate.

With regards to affordable housing, the budget has extended the tax holiday on affordable housing projects until 31st March 2022

👉 ETMONEY OPINION

From an investing perspective, the stock markets have taken very well to this budget. The NIFTY has closed over 14,200 points today which is a 4.7% jump over the last trading session.

And this makes perfect sense as the supporting pillars are all there to usher us towards a sustained 7-7.5% GDP growth with :
► Visible infrastructure and manufacturing policy that showcases the government’s willingness to spend
► There is continuity in the taxation policies and whatever little tinkering that has been done is with the rate of customs duty which will boost production further
► An environment of low interest rate and friendly policies will go a long way in attracting foreign and domestic private capital expenditure.

Overall, we found the budget having mass appeal and created with much care to get the country back on track.

#ETMONEY #Budget2021

👉 Follow us on:

[bhojkumarsanmbhy]

1) I am 50% in liquid funds, 25% in short term & 25% in PSU & corporate bonds
2) Since a last few days corporate & PSU funds are eroding at roughly 0.15% a day
3) I am not talking of default risk, I am only asking regarding interest fluctuation risk, what is the worst case scenario you feel for the current situation, how much more loss to bear till they stabilize
4) I can hold for a long time, so do I have to take unnecessary worry about interest rate volatility

[sahilkamra]

Hello Sir,

Thanks for beautiful video

1 query not related to this video

Is it possible to transfer pension component in EPF after resigning ?

[parthdubey]

Sir i am beginner so please suggest me where i am interest

[relaxingmood]

Sir why don't you provide the pdf of detailed analysis??

[venkatraohyd]

Do we have web version of ETmoney application so as to make investment? Mobile app is not much convenient in fact.

[gnanasekaran]

Does Balance advanced funds are considered as debt fund or equity fund, How can i be sure before investing in them?

[chessmaster]

1:53: Dear Sir, only the first 10 million Vaccin doses will be at Rs. 200 after that it will be more, so the calculation of 125 doses per citizen due to allocation of Rs. 35 000 Cr is incorrect.

[yatharthfcb]

SIR OUR NEWS CHANNEL SHOULD ALSO DO A CENTRALIST ANALYSIS LIKE YOU.
UNLIKE ZEE TV WHICH ALWAYS PRAIZES THE BJP OR UNLIKE THE NTDV WHICH ALWAYS CURSES THE BJP.

[bhojkumarsanmbhy]

sir, is it possible to sit across and work out investments with ET MONEY, as i am 100% into debt funds and over a period of 2 years want to divesify

[sandwipsen]

What was the amount set for education, schools & higher studies + RnD?

[vibdib]

When will all this be implemented and how can we keep track? Why is there always a fiscal deficit?

[laveshtyagi]

Do you provide personal financial advice??

[bhojkumarsanmbhy]

Sir, after disinvestment what happens to the bonds held by PSU funds, can they come in trouble

[samrajl]

The budget allowing wider deficit, raising expenditure and increased allocation to housing, infra, health etc. are all in the right direction.
No new taxes is a good news. Sr.Citizens above 75 years need not file tax returns for pension and interest income takes away the charm that tax deduction by the Bank on interest paid is shows the appetite of Government to squeeze Silvers.
Coming to IPO of LIC, the idea is certainly not a well thought out move and it should abandon the same in the interest of more than 30 Crore family of policy holders. Trust the Government will re-think and once for all put an end to its liquidation in the greater interest of public good. Thanks.

[soubhiksaha]

Can an episode be made for comprehensive assesment and charity around NAV Allocation of Mutual Fund as per new regulation applicable from 1st/Feb/2021 for purchase / SIP especially from ETMoney platform

[n.vijayakumar]

As usual too good. PF interest data and PPF also inclusive in this 2.5 lakhs info missing ?

[Toxic-thsi]

Investment Advice:
India pe laga do because India ka bhaav abhi badhane waala hai.

[YashInvestment]

Your voice very beautiful sir, I am daily wait your video because you r very beautiful Explaining all subject I like it keep it up Sir👍👍👍👌👌

[Swaritarora]

Comparison of Health and wellness to Health from last year is not accurate. Health budget has only been increased slightly

[axt]

This Govt is very good in making grand announcements, let's see how this pans out