The first paperless budget presented by the Union Finance Minister, Nirmala Sitharaman is a step towards making India, truly self-reliant. Aimed to boost the economy in the aftermath of a global pandemic, this year’s budget was mostly good news for Indians.
With no tax hikes, extended tax holidays, focus on infrastructural development and job creation, the budget managed to bring much-needed cheer to this glum economy.
The financial budget of 2021-2022 announced by the union finance minister Nirmala Sitharaman put a spring back into the footsteps of the Indian economy.
The budget clearly showed the government prioritised growth over the deficit. As an amount of Rs 5.5 lakh crore are earmarked as capital expenditure on infrastructural development. This was a hike of 34.5% over last year’s budgetary allocation of Rs 4.12 crore.
Much emphasis was also laid to set up a robust healthcare infrastructure for the country. The finance minister has also upped the budget by 137% to around Rs 2.23 lakh crore.
To attract foreign investors, the government also upped the FDI (foreign direct investment) limit in the insurance sector to 74% from 49%. With this move, the government hoped to lure more investors in the highly competitive insurance segment. Privatisation of ports would also bring in much transparency and create additional jobs.
Setting up of seven textile parks over the period of next three years under the Mega Investment Textiles Parks (MITRA) scheme would provide a much-needed boost to the domestic textile industry. India is the second-largest textile manufacturer globally after China. This move is expected to double India’s industry size to around $300 billion over the period of the next 5 years.
In order to promote start-ups in India, the budget proposed an extension of tax holiday up to a year i.e. March 31, 2022. Moreover, the funding in start-ups would also get capital gain exemption till next year.
Though the common man feared tax hike to fund the weak economy, there were hardly any shockers. In fact, to commemorate the 75th year of India’s independence, senior citizens above 75 years were given an exemption from filing ITR (income tax returns).
Moreover, it was also said that the advanced tax liability on dividend income will be levied only after the dividend payment.
To provide impetus to the affordable housing segment (AHS), the budget extended tax deduction for interest on Rs 1.5 lakh loan paid to buy such a house to March 31, 2022. Moreover, such projects would get tax exemption till March next year. Even the affordable rental housing project for migrant workers would enjoy this tax holiday.
Though there were hardly any changes to the existing tax structure, a 2.5% agricultural cess was proposed on selected products. And, the import duty on gold and silver was reduced to 7.5% from the current 12.5%.
The finance minister also spoke of promoting shipping and recycling. It proposed to bring ships from Europe and Japan and double the current recycling capacity of 4.5 million LDT (light displacement ton) by 2024. This ambitious project was expected to generate 1.5 lakh jobs for the youth.
Overall, the budget has outlined the way government will steer the economy in the coming days and we sure are not disappointed.
(The writer is President, ASSOCHAM. Views expressed are personal)
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