New Delhi, Feb 1: Finance Minister Nirmala Sitharaman on Monday proposed a sharp increase in expenditure on infrastructure, doubling of healthcare spending and raising the cap on foreign investment in insurance in her Budget for the next fiscal in a bid to pull the economy out of the pandemic-induced trough.
The Budget for the fiscal year beginning April made no changes in personal or corporate tax rates but raised customs duties on certain auto parts, mobile phone components and solar panels in order to provide impetus to domestic manufacturing.
It also imposed an Agriculture Infrastructure and Development Cess (AIDC) on the import of certain items (like apples, peas, lentils, alcohol, chemicals, silver and cotton) to finance agricultural infrastructure and other development expenditure.
In her third budget and the Modi government’s eighth, Sitharaman proposed a vehicle scrappage policy, Rs 20,000 crore recapitalisation of public sector banks, divestment of some state-owned lenders and sale of non-strategic PSUs with a view to bolstering an economy that plunged into its deepest recorded slump amid the pandemic outbreak.
Stock market cheered the Budget announcements, with the biggest jump in indices on a budget day in over two decades while India Inc hailed Sitharaman as a reformist.
Prime Minister Narendra Modi said the Budget puts a lot of emphasis on strengthening the farm sector but opposition Congress termed it a “letdown like never before” and said it was a case of “wrong diagnosis and prescription”.
In the Budget for 2021-22, Sitharaman made interest on employee contributions to PF over Rs 2.5 lakh per annum taxable, effective April 1, 2021.
In a relief to senior citizens, those above 75 years of age with only pension and interest income would no longer have to file income tax returns, subject to certain conditions. She allocated Rs 5.54 lakh crore for capital creation in the infrastructure sector.
This included Rs 1.18 lakh crore for the roads and highways sector and Rs 1.08 lakh crore for railways. The allocation was 37 per cent more than last year.
With just 1 per cent of GDP being spent on health, she proposed raising the spending to Rs 2.2 lakh crore next fiscal to help improve health systems as well as fund the vaccination drive against coronavirus. (PTI)
