Budget 2021 Highlights: Minimum Government, Maximum Governance and Fiscal Position
- 03 Feb 2021
- 3 min read
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.
- 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.