Budget 2021 LIVE Updates: Finance Minister Nirmala Sitharaman will today deliver her promised budget that is expected to provide relief to the pandemic-hit common man via income tax benefits as well as focus more on driving the economic recovery through higher spending on healthcare, infrastructure and defence amid rising tensions with neighbours. As India emerges from the Covid-19 crisis, the ninth budget under the Prime Minister Narendra Modi government, including an interim one, is widely expected to focus on boosting spending on job creation and rural development, generous allocations for development schemes, putting more money in the hands of the average taxpayer and easing rules to attract foreign investments.
Sitharaman, who had in her first budget in 2019 replaced leather briefcase that had been for decades used for carrying budget documents with a traditional red cloth 'bahi-khata', had earlier this month stated that the budget for the fiscal year beginning April will be "like never before". The budget, economists and experts say, will be the starting point for picking up the pieces after the economic destruction caused by the COVID-19 pandemic. And it must go beyond being just a 'bahi khata' or a ledger of accounts, as well as canning old schemes in a new bottle.
Will Markets Respond Well to Budget 2021 After Losing Almost Rs 10,000 cr Last Week? | Ahead of Union Budget 201, the market witnessed continuous selling throughout the truncated week ended January 29 amid volatility due to monthly expiry, FII selling, and weak global markets. Meanwhile, market participants also booked profit ahead of the Budget to be presented later in the day. Last week, BSE Sensex slipped 2,592.77 points or 5.3 percent to end at 46,285.77 and while the Nifty50 fell 737.3 points or 5 percent to finish at 13,634.60 levels. Read the full story here.
Feb 01, 2021 08:19 (IST)
What are Corporate Taxes?
Feb 01, 2021 08:04 (IST)
When Will Budget 2021 be Presented?
Nirmala Sitharaman will present the much-awaited budget 2021 at 11 am on February 1 (Monday). The Economic Survey was tabled in Parliament on January 29 after President Ram Nath Kovind addressed a joint sitting of Parliament.
The Economic Survey 2020-21 was authored by a team led by Chief Economic Adviser (CEA) Krishnamurthy Subramanian. The document details the state of different sectors of the economy and reforms that should be undertaken to accelerate growth.
Meanwhile, the immediate direction of the stock exchanges would be decided by the outcome of Finance Minister's Budget 2021.
Feb 01, 2021 07:54 (IST)
Income Tax Updates: 5 Income Tax Changes that Could be Expected in Budget 2021 |
- Tax experts expect the government to fix some anomalies in the NPS or National Pension Scheme with regard to income tax benefits.
- Key expectations include allow indexation while calculating LTCG on equity shares/equity MFs and/or allow setoff of STT against the tax liability thereon, reduce LTCG period to 1 year for debt MF, exempt dividend income in the hand of recipient.
- A change on long term capital gains on debt mutual fund units held for more than 36 months are taxed at 20% after adjusting for indexation. Short-term capital gains on units held for 36 months or less are added to the income of the individual and taxed as per the applicable slab rate.
- As a relief to salaried middle-class taxpayers amid the pandemic and to boost consumption, the central government may hike the standard deduction limit in Budget 2021, experts say.
Feb 01, 2021 07:37 (IST)
A Budget 'Like Never Before' | Nirmala Sitharaman, who had in her first budget in 2019 replaced leather briefcase that had been for decades used for carrying budget documents with a traditional red cloth 'bahi-khata', had earlier this month stated that the budget for the fiscal year beginning April will be "like never before". The budget, economists and experts say, will be the starting point for picking up the pieces after the economic destruction caused by the COVID-19 pandemic. And it must go beyond being just a 'bahi khata' or a ledger of accounts, as well as canning old schemes in a new bottle.
Feb 01, 2021 07:16 (IST)
What Women Want from Budget 2021 | While there are prominent economists who believe that gender budgeting mars the work of feminist economists who want to redesign economic policy and allocations on the grounds of equality, there are many who think that the gendered perspective has indeed helped give impetus to women-targeted schemes and policies. Read the full story here.
Feb 01, 2021 07:14 (IST)
What is 'Budget Estimate'?
Feb 01, 2021 07:10 (IST)
Follow Budget 2021 On Your Android Phone and iPhone With This App | Union Budget 2021 will go fully paperless for the first time with a dedicated Union Budget app for Android and iOS smartphones. The dedicated apps are available to download for free via Google Play Store and Apple App Store, and the latest documents will be available to access after Finance Minister Nirmala Sitharaman's Budget presentation on February 1. Check how to download here.
Feb 01, 2021 07:08 (IST)
Income Tax in Budget 2021 | The ninth budget of the Narendra Modi government, including an interim one, is also expected to focus on boosting spending on job creation, putting more money in the hands of the average taxpayer and easing rules to attract foreign investments. Some tax experts, however, believe that since a new income tax regime was introduced in the financial year 2020-21, this year's Budget may not see many new changes. Follow the live updates on Income Tax for Budget 2021.
Feb 01, 2021 06:59 (IST)
What the Common Man Expects from Budget 2021 | Some of the expectations of the common man from the Budget 2021 are as follows:
1. Deduction For Remote Working Set-up
2. Increase in limit Under Section 80C and 80D of Income Tax Act
3. Increase in Spending Power of the Consumer
4. Long-term Capital Gains On Equity Shares And Equity Mutual Funds
5. Introduction to Debt Linked Savings Scheme
6. Pension Scheme For the Elderly
Feb 01, 2021 06:56 (IST)
Halwa Ceremony | The customary Halwa ceremony, marking the final stage of the Budget-making process, was held in North Block on January 23 in the presence of Union Finance and Corporate Affairs Minister Nirmala Sitharaman. The event also marked the launch of the Union Budget Mobile App, a platform that provides easy and quick access to budget-related information to all stakeholders.
Feb 01, 2021 06:54 (IST)
With India slowly recovering from the pandemic, the public is hopeful of buoyancy in the economy and the introduction of a taxpayer-friendly budget. While various economic packages and reforms announced by the government in 2020 had kept the economy afloat, Budget 2021 is also being looked upon as a watershed event that is expected to lift and give an impetus to the Indian economy.
Feb 01, 2021 06:53 (IST)
A Unique Paperless Budget | This year's Budget will be unique as it will be paperless, in a significant break from tradition, due to the Covid 19 pandemic. This is the first time in the history of independent India that budget papers will not be printed, so as to minimize the possibility of social interaction and maintain social distancing norms.
Feb 01, 2021 06:51 (IST)
Budget 2021 to be Presented Today | Finance minister Nirmala Sitharaman will present the Budget in Parliament today. The budget comes at a time when the country is facing an unprecedented health crisis due to the COVID-19 pandemic. Experts believe that the government is likely to focus on strengthening its flagship Atmanirbhar Bharat Abhiyan and providing further impetus to the 'Make in India' program so as to boost economic demand and stimulate growth.
MoS Finance Anurag Thakur prays ahead of Budget presentation
It has to be a vision statement, a roadmap to get the world's fastest-growing major economy back on track. A prescient budget, which goes a long way in instilling confidence, cannot be replaced by 'mini-budgets' such as the one in September 2019 when the government cut corporate tax rate just two months after Sitharaman presented her maiden one, or the periodic announcements of economic measures that dotted 2020.
There is a larger consensus among economists that the annual GDP for FY21 will decline by 7-8 per cent, one of the weakest performances among the developing nations. The government has to play a critical role in pulling the economy out of the trough. While the pandemic is showing signs of being less virulent, a gradual progress in the vaccination programme is fuelling hope for a better future. A sustainable economic revival will need a policy catalyst. That's where this budget assumes a special relevance.
The pandemic struck at a time when the economy was already caught in the grip of a growth slowdown. GDP growth touched an 11-year low of 4 per cent in 2019-20. A steadily declining investment rate has been a major factor in causing deceleration prior to the coronavirus crisis. And the lockdown imposed to curb the spread of coronavirus in March last year brought economic activities to a grinding halt, causing a sharp contraction in the GDP in two successive quarters of FY21, pushing the economy into a recessionary phase.
In response, the government announced a number of policy measures under Aatmanirbhar Bharat package 1.0, 2.0 and 3.0 to support the economy. The package was a combination of grant, equity and liquidity measures by the central government, state governments and the Reserve Bank of India (RBI). While the headline stimulus was pegged at close to Rs 21 lakh crore, the actual fiscal impact of the economic packages works out to be about Rs 3.5 lakh crore (1.8 per cent of GDP).
Also, since last budget, the size of the economy has reduced from Rs 2.24 lakh crore nominal GDP considered in the FY21 budget to Rs 1.94 lakh crore. There has been lower-than-budgeted revenue growth and higher expenditure to offset the adverse impact of the pandemic. Among the most-watched figures in the budget would be the expenditure on vaccination in FY22 which could be shared among the central government, state governments and households.
India has started the largest vaccination programme in the world from January 16 and is using two vaccines Covishield and Covaxin. Also, to be watched is the revenue that the government is projecting to receive from the privatisation of companies such as Bharat Petroleum (BPCL), Air India and Shipping Corporation of India (SCI).
Market borrowings are expected to remain elevated and external deficit financing would increase. Higher capital expenditure outlay for National Infrastructure Pipeline (NIP) programme that has an aggregate investment target of Rs 111 lakh crore over the period 2020-25 and making recently introduced Production-Linked Incentive (PLI) scheme more attractive to lure foreign manufacturers to boost domestic manufacturing are top expectations from the budget.
Acuit Ratings & Research Limited said there are two primary objectives before the government at this stage reignite the growth engine in the economy while committing itself to a medium-term fiscal consolidation path. "The growth impetus should incentivise demand in the near term and ensure its sustainability over the medium to long term.
"Four elements must be activated to build economic vibrancy over the long term - give infrastructure a significant push through public and private investments, facilitate large-scale private and foreign investments across industrial, services and agricultural sector; incentivise private consumption in the near term without significant compromises on tax revenues; and step up allocation in health and education sectors." Arun Singh, Global Chief Economist at Dun and Bradstreet said unprecedented circumstances require unprecedented measures. "Globally, governments are facing massive policy and operational challenges and are adopting unconventional measures to revive their economy. A big bang package of reforms is thus on the anvil." Undeniably, the government has a difficult task of manoeuvring the nascent recovery of the economy and managing the fiscal burden, which is expected to remain high not only for the current year but also for the subsequent years, he said.
"In the current scenario, it would be impossible not only for India but for countries globally to shoulder the pandemic without fiscal destabilization in the short to medium term." India Ratings and Research said the government finances need to be steered in a way that puts the economy back on tracks. Projecting a Rs 60,000 crore revenue shortfall in the fiscal year ending March 31, it estimated the fiscal deficit at over 7 per cent in the current fiscal as against budget target of 3.5 per cent. For the next, it put the fiscal deficit at 6.2 per cent.
The budget will have to address a number of issues - health infrastructure, reviving demand, banking sector reforms, fiscal consolidation and implementation of 15th Finance Commission report, said Brickwork Ratings. Centrum said, "We expect the upcoming budget to prioritise growth-oriented measures with the commitment to warrant that the momentum of recovery seen in the economy recently remains sustainable." The emphasis of the budget is likely to be on the revitalization of durable consumption impulses at the current juncture as the supply-side measures have already been implemented.
Alongside, the key focus will also remain on the further fostering of private investments as well after the initiation of a slew of measures like corporate tax rate cut, NIP and PLI scheme on this front, it said. Amidst a plethora of market expectations around the budget FY22, key areas where the central government is highly anticipated to put its more attention to are the establishment of a bad bank to clean up bank balance sheets, presenting finer contours of the PLI scheme for boosting manufacturing for the 10 sectors announced earlier and resources likely to be made available. Others include offering sops to reinvigorate household consumption demand via tax incentives for spending and higher deductions on housing loans coupled with the introduction of a COVID Cess that is expected to be levied on high-income individuals, it said.
India Ratings and Research believes that the major focus of the government to revive the COVID-19 battered economy has till now been on the supply side, but it is high time to change gears and focus on the demand side as well, lest the ongoing recovery begins to lose steam. Its budget expectations include spending on infrastructure especially that are employment-intensive and have a shorter turnaround time, creation of development financial institutions, continue with relief/income support to the households who are at the bottom of the pyramid and higher allocation to MGNREGS as it provided a safety net not only to rural households but also to the workers who migrated back to rural areas.
Also, more support to real estate given its backward-forward linkage in the economy especially affordable housing segment, boosting micro small and medium enterprises, reprioritisation of both revenue and capital expenditure towards essentials such as top priority to mass vaccination/public health, reprioritisation of expenditure and mobilisation of higher non-tax revenue, it added. GlobalData, a leading data and analytics company, said the need of the hour is to increase credit flows, especially to small and medium enterprises sector, as well as investment in education and health sectors to boost production and consumption.
Gargi Rao, Economic Research Analyst at GlobalData, said, "The expectations from the upcoming budget are mainly inclined towards infrastructure development, tax concessions for elderly to provide a breather for consumers to increase their overall consumption, along with increasing domestic production." The budget will come as an economic vaccine for the pandemic-battered economy and steer India with the much-needed stimulus to boost demand, consumer confidence and at the same time boost the purchasing power of the people, the Indian Chamber of Commerce (ICC) said, adding incentives to industries like textiles, apparel, leather, food processing, construction and retail are expected.
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