Amid India’s prolonged standoff at the Line of Actual Control (LoAC), Defence Minister Rajnath Singh highlighted that the budget allocation for defence has been hiked to 4.78 lakh crore for 2021-22. While the pensions of the personnel amount to Rs.1.15 lakh crore, Rs.1.35 lakh crore has been allocated to the defence capital expenditure.
Thanking Union Finance Minister Nirmala Sitharaman and Prime Minister Narendra Modi for Union Budget 2021-22, Singh revealed that this was the highest increase in capital outlay for defence in the last 15 years.
Maintaining that this budget lays the foundation for a Self-Reliant India, the senior BJP leader contended that this will expedite the country’s economic transformation. According to him, this budget is an addition to the series of mini-budgets unveiled by the Union Finance Minister in 2020 during the challenging Covid-19 pandemic. Singh pointed out that it focuses on economic reforms, employment generation, capital formation and creating infrastructure in India.
Earlier in the day, Union Finance Minister Nirmala Sitharaman presented the first-ever digital Union Budget which laid emphasis on 6 pillars- health and well-being, physical and financial capital and infrastructure, inclusive development for aspirational India, reinvirogating human capital, innovation and Research and Development and minimum government and maximum governance. To begin with, the outlay for the health sector was increased by 137% including the allocation of Rs.35,000 crore for COVID-19 vaccine. The introduction of a new Centrally sponsored scheme- PM Aatmanirbhar Swasth Bharat Yojana has given a big boost to health infrastructure.
There has been a 34.5% increase in the capital budget expenditure as compared to 2020-21. In another big move, the FDI limit in the insurance sector has been increased from 49% to 74% besides allowing foreign ownership and control with safeguards. Fixing the disinvestment target for 2021-22 at Rs.1.75 lakh crore, Sitharaman disclosed that every Public Sector Undertakings in all but 4 strategic sectors will be privatised. In 2021-22, the fiscal deficit is estimated to be 6.8% of the GDP with the aim to achieve a fiscal deficit level below 4.5% of the GDP by 2025-26.
On the direct taxation front, relief has been provided to senior citizens above 75 years of age besides changes in mechanisms for reducing disputes and simplifying settlements. For instance, the National Faceless Income Tax Appellate Tribunal Centre will be established. Moreover, the Centre has opted for Customs Duty rationalization and introduced the the Agriculture Infrastructure and Development cess on a small number of items to aid farmers.