Nirmala Sitharaman to present 'Budget like never before' shortly
At 11 am, Finance Minister Nirmala Sitharaman will present her third Union Budget. With the minister earlier declaring that this Budget "will be like never before," the expectations of a coronavirus-battered nation are already high. Notably, the Economic Survey 2021 pegged India's GDP growth at 11% for 2021-22 while estimating a 7.7% contraction for the ongoing fiscal. Here are more details.
Evidently, coronavirus pandemic spelled doom for economy
The Budget comes when India's economy is still struggling with the impact of the coronavirus pandemic. The health crisis sparked job losses, uprooted several businesses, and left all sectors battered. In May, just as India took small steps toward unlocking after a harsh lockdown imposed in March, Prime Minister Narendra Modi had announced the Aatmanirbhar Bharat package of Rs. 20 lakh crore.
Budget revolves around philosophy of 'growth with human touch'
Understandably, the Aatmanirbhar Bharat sentiment would dominate Sitharaman's Budget. Her Budget follows the philosophy of "growth with a human touch," sources told HT. The Budget will focus on increasing the income of Farmers, a large chunk of whom are miffed with the government over three agricultural reforms passed in mid-September. Farmers, arguing that their livelihoods would be threatened, want the laws repealed.
Sitharaman will focus on generating jobs, supporting MSMEs, improving healthcare
The Budget could focus on generating jobs, improving the standards of healthcare (that was put to test during the pandemic), and supporting MSMEs. Ease of compliance for citizens as well as businesses and making India a notable player in the global supply chain are also likely to get attention. Putting more money in the pockets of common taxpayers could also be on agenda.
Government turning to privatization, selling stakes to fund expenditure
The Finance Minister is expected to increase spending by over 15% year-on-year in 2021-22. The government is expected to turn to privatizing state-run firms and selling minority stakes in large companies for funding its expenditure plan. Reportedly, the government is aiming to raise Rs. 2.5-3 lakh crore in 2021-22 by selling stakes. Import duties on high-end items could be increased as well.
Individuals are eyeing an increase in basic tax exemption limit
Though there is little room to announce huge tax relief for individuals, hopes are still running high. Homi Mistry, Tax Partner, Deloitte India, advocated increasing the basic tax exemption limit. "The COVID-19 pandemic has affected everyone in some way or the other. Increasing the basic exemption limit will provide tax respite to individuals, increase liquidity, and give a boost to the economy," he opined.
Experts want relief for sectors worst-hit by the pandemic
Separately, corporations and industry chambers want Sitharaman to announce tax-relief measures for sectors that were worst hit by the coronavirus pandemic, like real estate, aviation, tourism, and automobile sector. However, this might become challenging, considering India's fiscal deficit in the ongoing financial year is likely to be over 7% of GDP. This deficit is double the government's estimate of 3.5%.
In a first, Budget to be presented in paperless form
Sitharaman will present the Budget in a "paperless form." Previously, the Finance Minister ditched the colonial-era brown briefcase and introduced a "bahi khata." With colleague Anurag Thakur by her side, Sitharaman flaunted a tablet, which was wrapped in a red-colored cloth, at Parliament's entrance today. Last month, she had launched Union Budget Mobile App to make documents easily accessible to parliamentarians and the public.
