India budget 2021 passed: As it happened

New Delhi - India doubles healthcare spending, opens up insurance to more FDI to get growth back up

Indian Finance Minister Nirmala Sitharaman on Monday unveiled the budget for fiscal 2021-22, that aims to shore up an economy badly-hit by the novel coronavirus pandemic.

The economy is projected to contract 7.7 per cent in the current fiscal year, although the government forecasts growth of 11 per cent for the coming fiscal year, after a massive Covid-19 vaccination drive and a rebound in consumer demand and investments.

These are the highlights from Sitharaman’s fiscal 2021-22 budget speech:

Deficit

* 2020/21 fiscal deficit seen at 9.5% of GDP

* 2021/22 fiscal deficit seen at 6.8% of GDP

* 2025/26 fiscal deficit target set at 4.5% of GDP

Expenditure

* 2020/21 revised expenditure 4.39 trillion rupees ($60.14 billion)

* 2020/21 capital expenditure estimated at 5.54 trillion rupees ($75.90 billion)

* 2021/22 gross expenditure seen at 34.83 trillion rupees ($477.16 billion) in 2021/22

* To provide more than 2 trillion rupees ($27.40 billion)for states and autonomous bodies

Borrowing

* India says will need 800 billion rupees ($10.96 billion) in next two months from bond market

* 2021/22 gross market borrowing seen at 12 trillion rupees ($164.40 billion)

Healthcare

* India to allocate 2.2 trillion rupees ($30.20 billion) for healthcare in 2021/22

* Sitharaman says expect two or more Covid-19 vaccines soon

* India to launch new federal health scheme with outlay of around 641 billion rupees ($8.80 billion) over the next six years

* To allocate 350 billion rupees ($4.81 billion) for Covid-19 vaccines, and allocate more funds if needed.

Finance

* India to introduce bill for development financial institution with capital of 200 billion rupees ($2.74 billion)

* To infuse 200 billion rupees ($2.74 billion) for recapitalization of state-run banks in FY2022

* India to consolidate certain SEBI regulations for Securities Market Code

* To relax FDI cap for insurance sector to 74% from 49%

* Set up asset reconstruction company to take over toxic assets

* To cut money market requirement to 15% from 25%

* To allocate 15 billion rupees ($205.50 million) for scheme to incentivise use of digital payments

* India to incentivise incorporation of one-person companies

Taxation

* Proposes exemption to senior citizens for filing income tax returns

* Proposes changes in personal income taxes for non-resident Indian

* To set up dispute resolution panel for small taxpayers

Divestment

* India sets 2021/22 divestment target at 1.75 trillion rupees ($23.97 billion)

* India to divest two public sector banks and one general insurance company

* India to launch IPO of Life Insurance Corporation

* India to announce policy for privatisation of state-run companies

* To create new list of companies for divestment

* India to introduce new mechanism for privatisation of loss-running state-run companies

* To monetise surplus lands of public sector entities

Infrastructure

* To allocate 2.87 trillion rupees ($39.40 billion) for clean water supplies over the next five years

* To allocate 3 trillion rupees ($41.10 billion) for power sector for next five years

* To provide 10 billion rupees ($137.01 million)to Solar Energy Corporation of India

* Sitharaman says will move to end power distribution company monopolies

* To double ship recycling capacity by 2024

* India to monetise infrastructure assets

Transport

* Allocates 1.18 trillion rupees ($16.17 billion) for ministry of roads and highways

* Allocates 1.1 trillion rupees ($15.07 billion) for railways

* Railways to monetise freight corridors

* India to launch new vehicle scrapping policy

* Proposes tax holiday for aircraft leasing firms in India

Agriculture

* India allocates an estimated 1.7 trillion rupees ($23.29 billion) for paddy procurement

* Hikes enhanced agriculture credit target to 16.5 trillion Indian rupees ($226.05 billion) in 2020/21

* To include loans for activities in allied sectors in agriculture

* To discontinue small savings fund loans to Food Corporation of India

Labour

* To launch database for gig economy, building and construction workers

* Social security benefits to be extended to gig economy workers

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11:36am

Markets cheer as India stocks cross 1,600 points as benchmark S&P BSE Sensex touch 1,658.04 points or 3.58 per cent at 47,911.20 and NSE Nifty 50 index rose 1.93 per cent or 262.50 points to 13,897.10 .

11:35am

“We are withdrawing exemption on certain kind of leather imports,” says Nirmala Sitharaman

11:30am

Government proposes to relax norms to attract more foreign investment in infrastructure sector: Finance Minister

11:29m

Govt proposes to review over 400 old exemptions in indirect taxes; to begin extensive consultation from October 2021: FM

11:20m

NRIs exempted from tax audit

India’s finance minister Nirmala Sitharaman in her budget presentation proposed to increase the threshold for tax audit from Rs 50 million to Rs 100 million for businesses that have been transacting 95 per cent digitally.

The move is expected to benefit non-resident Indians who have businesses operating in India. Besides this, the Indian government will be notifying rules to eliminate double taxation for NRIs on foreign retirement funds, and has proposed one person companies which will help NRIs entrepreneurs.

11:15am

Nirmala Sitharaman reduces tax compliance for citizens over 75 yrs of age; NRIs exempted from audit

11: 05am

Senior Citizens (75 years & above) earning only pension and interest income are now exempted from filing IT Returns: FM Nirmala Sitharaman

11:03am

India’s FM has proposed to reduce the time frame for reopening of tax reassessment cases from 6 years to 3 years: FM Nirmala Sitharaman

10:57am

One nation, one ration card plan under implementation in 32 states, 1 UT: FM

We have launched one nation, one ration card scheme through which beneficiaries can claim their rations anywhere in the country. Migrant workers in particular benefit from scheme. One nation, One ration card plan is under implementation by 32 states & UTs: FM Nirmala Sithraman.

10:56am

Social security benefits will be extended to gig and platform workers. Minimum wages will apply to all categories of workers. Women will be allowed to work in all categories and also in night shifts with adequate protection: FM Nirmala Sithraman

10:54am

Fiscal Deficit is pegged at 9.5 per cent for fiscal 2021, says Sitharaman

10:50am

The upcoming census in India will be a digital one, says Sitharaman

10:49am

UAE collaboration for skills enhancement

India has collaborated with the UAE for skill enhancement of workers. We also have collaborative training programme with Japan. We will extend such partnerships with more countries, says India’s FM

10:45am

FM announces development of 5 major fishing hubs

I am proposing substantial investments in the development of modern fishing harbours & fish landing centres. 5 major fishing harbours - Kochi, Chennai, Visakhapatnam, Paradip and Petuaghat will be developed as hubs for economic activities: FM Nirmala Sitharaman.

10:40am

Divestment target for FY22 at Rs 1.75 trillion: Nirmala Sitharaman

In FY21, the government had budgeted to raise Rs 2.1 trillion through divestments but fell short. Some of the big ticket divestments planned last year, like the stake sale in LIC, may conclude this year. The government has approved a new public sector enterprises policy, which is intended to drive privatisation. Fiscal support in FY22 depends on revenue generation from the success of these programmes.

10:36am

These are the initial highlights from Sitharaman’s fiscal 2021-22 budget speech:

EXPENDITURE

* 2020/21 revised expenditure 4.36 trillion rupees ($59.74 billion)

* 2020/21 capital expenditure estimated at 5.43 trillion rupees ($74.40 billion)

* 2020/21 budget deficit said to be 9.5% of GDP - Bloomberg

* To provide more than 2 trillion rupees ($27.40 billion)for states and autonomous bodies

HEALTHCARE

* India to allocate 2.2 trillion rupees ($30.20 billion) for healthcare in 2021/22

* Sitharaman says expect two or more COVID-19 vaccines soon

* India to launch new federal health scheme with outlay of around 641 billion rupees ($8.80 billion) over the next six years

* To allocate 350 billion rupees ($4.81 billion) for COVID-19 vaccines, and allocate more funds if needed.

FINANCE

* India to introduce bill for development financial institution with capital of 200 billion rupees ($2.74 billion)

* To infuse 200 billion rupees ($2.74 billion) for recapitalization of state-run banks in FY2022

* India to consolidate certain SEBI regulations for Securities Market Code

* To relax FDI cap for insurance sector to 74% from 49%

* Set up asset reconstruction company to take over toxic assets

INFRASTRUCTURE

* To allocate 2.87 trillion rupees ($39.40 billion) for clean water supplies over the next five years

* To allocate 3 trillion rupees ($41.10 billion) for power sector for next five years

* To provide 10 billion rupees ($137.01 million)to Solar Energy Corporation of India

* Sitharaman says will move to end power distribution company monopolies

* To double ship recycling capacity by 2024

* India to monetise infrastructure assets

TRANSPORT

* Allocates 1.18 trillion rupees ($16.17 billion) for ministry of roads and highways

* Allocates 1.1 trillion rupees ($15.07 billion) for railways

* Railways to monetise freight corridors

* India to launch new vehicle scrapping policy

10:35am

Govt proposes further recapitalisation of state-owned banks; earmarks Rs 200 billion: FM

10:30am

Government to now allow one-person companies. No restriction on paid-up capital and turnover, to incentivise incorporation of one-person companies. Conversion of one-person company to any other kind, reducing residency limit from 182 days to 120 days. Allow non-resident Indians (NRIs) to incorporate one-person companies in India.

10:27am

India’s finance minister has proposed to revise definition of small companies by increasing their threshold for capitalisation to not exceeding Rs 5million to not exceeding Rs 20 million.

10:25am

Indians govt stretched its resources to help the poor

- Free food grain to 800 million people

- Free cooking gas for 80 million families

- Jal Jeevan Mission, universal coverage of water supply

- Budget to double farm incomes

10:24am

Indian government proposes IPO of Life Insurance Corporation of Indian in next financial year

10:22am

FDI in insurance companies proposed to increase from 49 per cent to 75 per cent

10:17am

New scrapping policy for commercial vehicles to reach clean air goal

Voluntary scrapping policy has been announced for discarding old commercial vehicles, which are constidered a large contributor for air pollution in India. The finance minister said that the scrapping parameters will be based on fitness test - 20 years in a personal vehicle and 15 years for the commercial vehicle. More details to be available soon.

10:16am

India to launch 7 textile parks in 3 years

Government has committed Rs 1.97 trillion for PLI schemes covering 13 sectors. Further seven textile parks will be launched over three years. Sitharaman said, " A scheme of Investments Textile Park will be launched in addition to PLI Scheme which will create world class infrastructure with plug and play facilities to enable global champions in exports.

10:16am

Budget highlights

1. Ujwala scheme will be extended to cover 10 million more beneficiaries

2. 100 more districts will added to the city gas network

3. Gas pipeline initiative in Jammu and Kashmir

10:12am

A hydrogen energy mission to be launched in 2021-22 to generate hydrogen from green power sources: FM Nirmala Sitharaman

10:08am

For 2021-22, I propose a sharp increase in Capital Expenditure & thus have provided Rs 5.54 trillion which is 34.5 per cent more than the BE 2020-21: FM Nirmala Sitharaman

10:03am

New economic corridors planned to boost road infrastructure: : Finance Minister Nirmala Sitharaman

9:57am

India now has one of the lowest Covid-19 death rates of 112 per million population and one of the lowest active cases of about 130 per million. This has laid the foundation for the economic revival we see today: Finance Minister Nirmala Sitharaman in Parliament

10am

Capital expenditure of Rs 5.5 trillion proposed for 2021-22

9:55am

FM lists six pillars for economic revival

Budget proposals rest on 6 pillars, including health and well-being; physical and financial capital: FM

Six pillar of this budget:

1. Health & Wellbeing

2. Physical and financial

3. Inclusive development for aspiration

4. Reinvigoration of Healthcare centres and setting up of new ones