Budget 2021 Highlights: Minimum Government, Maximum Governance and Fiscal Position

• 03 Feb 2021

Why in News

Recently, the Minister of Finance presented the Union Budget 2021-22. This was the first digital budget.

• This section deals with the theme ‘Minimum Government, Maximum Governance’ and Fiscal Position of the government.

Key Points

• Minimum Government, Maximum Governance:
  
  • National Commission for Allied Healthcare Professionals already introduced to ensure transparent and efficient regulation of the 56 allied healthcare professions.
  • The National Nursing and Midwifery Commission Bill introduced for the same in the nursing profession.
  • Proposed Conciliation Mechanism with mandate for quick resolution of contractual disputes with Central Public Sector Enterprises (CPSEs).
  • Rs. 3,768 crore allocated for first digital census in the history of India.
  • Rs. 300 crore grant to the Government of Goa for the diamond jubilee celebrations of the state’s liberation from Portuguese.
  • Rs. 1,000 crore for the welfare of Tea workers especially women and their children in Assam and West Bengal through a special scheme.
• Fiscal Position:
  
  • Fiscal deficit stands at 9.5% of the Gross Domestic Product (GDP), and is estimated to be 6.8% in 2021-22.
  • Plan to continue on the path of fiscal consolidation, achieving a fiscal deficit level below 4.5% of GDP by 2025-2026 with a fairly steady decline over the period.
    
    • Amendment to Fiscal Responsibility and Budget Management (FRBM) Act proposed to achieve targeted Fiscal Deficit levels.
  • The Contingency Fund of India is to be augmented from Rs. 500 crore to Rs. 30,000 crore through Finance Bill.

• Recommendations of Fifteenth Finance Commission:
  
  • The final report covering 2021-26 was submitted to the President, retaining vertical shares of states at 41%.
  • Funds to UTs of Jammu and Kashmir and Ladakh would be provided by the Centre.
  • On the Commission’s recommendation, Rs. 1,18,452 crore have been provided as Revenue Deficit Grant to 17 states in 2021-22, as against Rs. 74,340 crore to 14 states in 2020-21.
• Tax Proposals:
  
  • No exemption on interest, if Provident Fund PF contribution is more than Rs. 2.5 lakh.
  • Exemption from filing tax returns for senior citizens over 75 years of age and having only pension and interest income; tax to be deducted by paying the bank.
  • Income Tax settlement commission abolished.
  • Higher Tax Collection at Source rate for non-filers.
  • Reducing time to file belated returns.
  • Agriculture Infrastructure and Development Cess (AIDC) on a small number of items.
  • Dispute Resolution Committee to be set up for taxpayers with taxable income up to Rs. 50 lakh and disputed income up to Rs. 10 lakh.
  • National Faceless Income Tax Appellate Tribunal Centre to be established.

Source:PIB