Budget 2021 live updates: Budget for tourism ministry slashed by 19%; industry unhappy

The arithmetic of the 2021-22 Budget is based on the hope of a sharp bounceback in the government’s revenue on the heels of the forecast of 14.4% growth in nominal GDP. With the total expenditure remaining at about the same level, the fiscal deficit would be cut in both absolute and relative terms.

The proposal to incentivise setting up a One Person Company (OPC) might not lead to any significant boost for startups, though it may help microentrepreneurs formalise their business at a very early stage.

A Rs 1,500-crore allocation by the government to promote digital payments will compensate banks and service providers for fees they forego on payments made through debit cards and the Unified Payments Interface (UPI). This will encourage more shopkeepers to accept digital payments and consequently open up more avenues for bank account holders to use cards and mobile phones (UPI) for payments. Dilip Asbe, MD & CEO, National Payments Corporation of India, said the move would be a growth booster for digital payments and the fintech sector.

Nearly two decades after an NDA government’s unsuccessful bid to reduce government holding in public sector banks, finance minister Nirmala Sitharaman has bit the bullet and announced a fresh plan to privatise two public sector banks. Simultaneously, a move to divest stake in one non-life insurance company enables government to target higher revenue without forsaking strategic objectives.

Businessmen, using tax havens like Dubai to avoid paying taxes in India, find themselves in hot water. The reason — India’s tax laws now define the term ‘liable to tax’.

Dalal Street investors gave a big thumbs-up to the FM’s Budget proposal that boosted government investments at a time when private sector players are unable to act simlarly, mainly due to Covid-induced uncertainties.

The Centre on Monday stuck to the 15th Finance Commission’s recommendation to share 41% of tax receipts with states, while accepting in principle several crucial recommendations, including the creation of a non-lapsable modernisation fund for defence and internal security.

The government will continue on its path of fiscal consolidation and intends to reach a fiscal deficit of below 4.5% of gross domestic product (GDP) by 2025-2026, finance minister Nirmala Sitharaman said in her budget speech.

The bill clarifies that if there is a delay in depositing the provident fund amount by the due date, which is the 15th of the next month, even if such deposit is made before the date of filing the return of income, this sum will not be allowed as a deduction in the hands of the employer.

Budget 2021 has restricted avenues for tax-free returns for middle-class taxpayers. From April 1, returns on investment of more than Rs 2.5 lakh in two of the most popular instruments — provident fund and unit linked insurance plan (ULIP) — will be taxed. This, say industry sources, will bring ULIPs on a par with mutual funds, doing away with the edge they have had since 2018 when long term capital gains was introduced.

Allocation for the home ministry in the Budget was marginally lower at Rs 1,66,547 crore as compared to Rs 1,67,250 crore allocated in the last Budget. Though a sum of Rs 4,568 crore was earmarked in last budget for Census 2021 and National Population Register (NPR) exercise, their postponement due to Covid-19 left it largely unutilised, with the revised estimate for 2020-21 being just Rs 755 crore. Though no fresh start date has been announced yet for Census/NPR exercise, the finance minister said she was earmarking Rs 3,768 crore for the “first digital census in the history of India”.

Farm groups have termed the Budget a “bitter harvest” sugar-coated with an implausible target of doubling farmers’ income by 2022. Claiming that there was nothing worthwhile in it for them, they accused the FM of making misleading claims like MSP being 1.5 times of the input cost of crops.

The government on Monday announced the rollout of the voluntary vehicle scrapping policy to phase out old and unfit vehicles. In her budget speech, FM Nirmala Sitharaman also said a Rs 18,000 crore scheme will be launched for a city bus system to increase the availability of public transport in urban areas.

Focusing on the National Education Policy 2020, the government has decided to qualitatively strengthen 15,000 schools so that they emerge as a model for others. Research and innovation, another key focus of NEP, gets a boost with the announcement of Rs 50,000 crore for the new National Research Foundation by Finance minister Nirmala Sitharaman.

After years of being ignored by successive FMs, the Covid-19 pandemic finally forced the government to take note of the country’s biotech sector that has been at the forefront in the fight against coronavirus.

The Union budget will bring in a positive change for investors, businesses and the general public, said Minister of State (MoS) for Finance, Anurag Thakur on Monday."We've focused on micro, small and medium enterprises (MSME) and infrastructure. We are also going to spend big on the healthcare sector. We've allocated around Rs 1.10 lakh crores for roadways and railways each. This Budget will bring in a positive change for investors, businesses and the general public," Thakur told ANI.

Union Home Minister Amit Shah on Monday hailed Union Budget 20-21 as agriculture sector friendly and lauded Prime Minister (PM) Narendra Modi for his devotion towards the welfare of farmers."PM has been working for the welfare of farmers from day one. Numerous efforts were made to double the farmers' income, taking this link forward...Ensuring Minimum Support Price at one and a half times the cost shows the commitment of the Modi government," Shah said in a tweet.