Budget 2021: It may be the third time Finance Minister Nirmala Sitharaman will be presenting the Union Budget but it won't be a clinch this year for her. With economic growth currently at a 10-year low, widening fiscal deficit, and inflation at its highest, FM Sitharaman has a difficult task to manage to steer the economy back on the growth track that has been marred by the coronavirus pandemic.
The FM has already hinted that Budget 2021 will the one that will be hailed as "never before". As a result, there are all eyes on Sitharaman that how she will prioritise spendings to get the coronavirus-ravaged economy back to one of the fastest-growing major economies.
Although the pandemic-induced economic shock has had a knock-on effect on almost all sectors of the economy, indicators show that some of them are recovering quickly, while others aren't that lucky yet.
MSMEs across several sectors are still grappling financially, resulting in little or no job creation. The auto and real estate sectors, which are still struggling, have urged the government to give more tax breaks to citizens, leaving them with higher disposable incomes.
The healthcare sector too has pinned big hopes on Budget 2021 in the wake of the coronavirus pandemic. Citizens and individual taxpayers alike are expecting tax concessions in this year's budget.
Here's all you need to know about Budget 2021:
What is the budget?
The Union Budget is an annual financial statement comprising the estimated earnings and approximate expenditures of the government during a particular financial year.
Who will present Budget 2021?
Finance Minister Nirmala Sitharaman will present her third budget under the National Democratic Alliance (NDA) government led by Prime Minister Narendra Modi. The Union Budget is prepared by the Department of Economic Affairs in the Ministry of Finance, which is then presented by the finance minister.
Budget 2021 date
Union Budget 2021 will be presented in the Lok Sabha of the parliament on February 1. Although the budget session will begin on January 29, 2021, the Budget will be presented on February 1, 2021. President Ram Nath Kovind will address a joint sitting of both the houses of parliament on January 29, following which the Economic Survey would be presented in the Lok Sabha.
Budget 2021 time
Budget 2021 proceedings will begin at 11 am on February 1. FM Sitharaman delivered the longest ever budget speech last year, on February 1, 2020. She spoke for 2 hours and 41 minutes.
Where to watch the Union Budget 2021?
The Budget 2021 will be telecast LIVE on national television channels such as Lok Sabha TV, Rajya Sabha TV, and Doordarshan. One can also visit their respective Twitter accounts and YouTube channels to watch the budget LIVE in action. Viewers can also tune in to BusinessToday.In, India Today TV and Aaj Tak to catch the live proceedings of this year's budget. One can also follow the LIVE blog by BusinessToday.In to track the latest updates on the important announcements made by FM Sitharaman. The budget 2021 speech can also be downloaded from the government's official website indiabudget.gov.in.
Budget 2021 to be paperless?
Union Budget 2021 is going to be completely paperless in the view of the ongoing COVID-19 pandemic. This will be the first time in independent India that the budget papers will not be printed. The government has also received permission for it from both houses of parliament.
The Centre took the decision as several people, around 100, were required to stay at the printing press for nearly a fortnight, which could have been risky amid the coronavirus fear. They were also needed to stay on till the budget documents were printed, sealed and delivered on the day of the budget. Thus, the finance ministry has decided not to keep the workers in the printing press and instead ensure that soft copies are available to all members of the parliament.
Budget 2021 Expectations
Defence expectations in Budget 2021
The Centre's defence spending which got a higher allocation boost last year in view of the India-China conflict at the Ladakh border, is likely to get more budgetary apportionment this year too. Besides this, the government may also focus on R&D and indigenous procurement for the defence sector.
Sin Goods (Tobacco/Alcohol) in Budget 2021
As the revenue collection is highly constrained, the government may further increase levies on 'sin goods', such as alcohol and tobacco, in the Union Budget 2021.
Household Savings in Budget 2021
The COVID-19 pandemic has hit the savings sector hard. Household savings, which dropped last year, meant people were hesitant to invest in long-term savings. The government is expected to address this in the Union Budget 2021 by incentivising savings/investments.
Real estate expectations from Budget 2021
Although several policy measures have been taken to boost real estate in pandemic-hit 2020, the sector expects the government to widen the scope of its affordable housing scheme and provide more tax benefits to potential homebuyers. The sector wants stimulus in the form of sops in the Union Budget 2021 to boost housing demand. The key demands of the real estate sector comprise tax rebate on housing, GST waiver, personal tax relief, extension of interest subvention, easing liquidity for the sector, and infrastructure status for realty.
Consumer durables/Electronics expectations from Budget 2021
Businesses selling consumer durables did not get any particular benefits in last year's Budget, thus the sector is expecting a reduction in component prices in addition to a demand push to push sales.
Income tax expectations in Budget 2021
The salaried individuals are pinning high hopes on the government to increase the basic exemption limit from Rs 2.5 lakh to Rs 5 lakh in order to leave them with more disposable income in their hands thereby boosting personal demand. It is also highly likely that the government may increase the income tax exemption limit under Section 80C to Rs 2 lakh from Rs 1.5 lakh in the Union Budget 2021.
Healthcare expectations from Budget 2021
Following the pandemic-hit year (2020), the sector expects the government to increase healthcare spend in Budget 2021 for ramping up infrastructure in the sector. As the coronavirus crisis has highlighted the need for the Centre to make healthcare a priority, the sector is eyeing holistic reforms such as higher budgetary allocation to it, and reduction in taxes on healthcare and treatment. It also expects the government to strengthen the provisioning of healthcare services via public-private partnerships.
Women's expectations from Budget 2021
The Centre is expected to announce steps to push women labour participation rate by widening the scope of skill development and entrepreneurship programmes. Working women are also pinning hopes on the government for tax concessions in Budget 2021.
Banking sector hopes from Budget 2021
The government is expected to disinvest and privatise some public sector banks (PSBs) which may be a part of the budget proposal, besides earmarking allocation for recapitalisation and privatisation of PSU banks. The banking sector's other key expectations from the Union Budget 2021 include setting up of multiple bad banks, slashing stakes in PSBs, and establishing a specialised agency to investigate financial frauds.
Auto sector's expectations from Budget 2021
Although the sector has bounced back from the pandemic-induced economic shock, auto manufacturers in the country expect the government to announce more demand-creating measures in the Budget 2021 for faster sales recovery.
Railway's expectations from Budget 2021
Infrastructure development and privatisation of trains continues to be foremost priorities for the Indian Railways. Although the budgetary allocation may see only a marginal increase, the government may announce measures for better public-private partnership (PPP) in passenger train operations.
Jobs/Employment expectations from Budget 2021
The government is expected to spend more on some important project-oriented sectors in order to generate higher employment opportunities. Key schemes such as MNREGA may be further widened.
Agriculture expectations from Budget 2021
The government may boost its overall agriculture expenditure to placate farmers protesting against its farm laws, besides taking steps to expand storage and warehousing capacities.
Aviation sector's expectations
The aviation sector, which is one of the worst affected by the pandemic-induced restrictions, expects near-term fiscal support from the government. The sector also hopes for a reduction in high levies and taxes as airlines try to find their feet again after the coronavirus pandemic crippled their operations in 2020.
Education sector's hopes from Budget 2021
The education sector, which saw a paradigm shift last year as teaching shifted from classrooms to online in the wake of the coronavirus pandemic, is pinning hopes on the government to allocate more funds towards reinforcing technological capacities to boost e-learning in smaller towns, cities and rural areas. It is quite a possibility that the government may allocate higher investment to strengthen the ed-tech sector.