Finance Minister Nirmala Sitharaman presented the first-ever paperless budget with focus on six pillars to strengthen the economy which has been impacted due to Covid-19 pandemic. The budget focused on nation building, job creation, demand creation and as promised, she Sitharaman delivered a budget ‘like never before’.
The Union Budget proposals rest on six pillars viz., Health and well-being, physical and financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D, minimum government and maximum governance.
Finance Minister neither raised the tax rates for individuals nor introduced any Covid related cess, which was widely expected. But she choose the route of asset monetisation and to reinvest the proceeds in infrastructure and growth.
The Prime Minister rightly said it is a budget of “Vikas Ka Vishwas”. The budget provides the confidence to all of us to work towards a better India.
Covid-19 genuinely exposed our healthcare infrastructure. Finance Minister announced a new centrally sponsored health scheme with viz., The PM Atmanirbhar Swasth Bharat Yojana with an outlay of Rs 64,180 crore over the next six years. This will boost and strengthen country’s health infrastructure.
Continuing the focus on the government’s vision of ‘Housing For All’, the Finance Minister announced tax exemption i.e. additional deduction of interest amounting to Rs. 1.5 lakh for loans taken to purchase an affordable house for one additional year i.e. till March 2022. Also developers building affordable houses were provided with tax holiday for an additional year i.e. till March 2022.
With an aim to address the need of affordable housing for migrant workers, the finance minister announced tax exemption for notified affordable rental housing projects.
This push for the real estate sector, especially affordable housing, will boost the recent momentum in housing demand and help in creating jobs. Housing is one of the largest employment generators in the economy with linkages to nearly 300 industries – both in terms of direct jobs and the jobs it creates in ancillary industries such as cement, steel, power etc.
The proposal to divest two PSU banks and recapitalisation scheme of Rs. 20,000 crore will give a strong boost to PSU banks to improve credit growth. Also the proposed privatisation of two PSBs and one general insurance company shows the government’s commitment to continual reforms and will help in improving the performance of some of the struggling PSUs.
With an aim to effectively implement the National Education Policy, finance minister announced to strengthen 15,000 schools initially. These schools will then mentor and work as a model for the NEP implementation across the country.
Sitharaman announced a bold and new age budget. With number of new ideas suggested, their execution is key. With the real GDP growth pegged at 11 per cent in FY22 as per Economic Survey 2020, GST collection touching a record high of Rs 1.19 trillion in January 2021, and the distribution of the vaccines happening at decent pace, I expect Indian economy to back on track sooner than later.
(The writer is Managing Director of HDFC Ltd. Views expressed are personal)
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