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Budget 2021-2022 Summary

 Budget 2021 - 2022 Summary



For the first time under such a pandemic and circumstances, the budget was prepared. This budget was the first budget of this new decade and was completely digital. 

Last Year nobody could have imagined that the global economy would get slowdown and would see an unusual contraction. The Prime Minister declared "Pradhan Mantri Garib Kalyan Yojna"  within 48 hours of the declaration of a 3weeks lockdown. The scheme is valued at Rs. 2.6 lakh crore for needy people. In May 2020 Government announced "Atmanirbhar Bharat " package 1.0, 2.0, and 3.0 which is estimated at about Rs. 27.1 lakh crore which is more than 13% of India's GDP

The budget depends on 6 pillars:

Health and well being

→Physical and Financial Capital and Infrastructure

→Inclusive Development for Aspirational India

→Reinvigorating human capital

→Innovation and R&D

→Minimum government and maximum governance

To develop primary, secondary, and tertiary care health system, strengthen existing national institutions, etc. "PM Atmanirbhar Swasth Bharat Yojana" will be launched which will about Rs. 64,180 crore for 6 years.

The government will merge the "Supplementary Nutrition Programme" and "the Poshan Abhiyan" and launch "Mission Poshan 2.0" to strengthen nutritional content, delivery, outreach, and outcome.

With an outlay of Rs. 2,87,000 crore government will launch "Jal Jeevan Mission" for 5 years which will be aimed to supply water in all Urban local bodies with 2.86 crore household taps and in 500 AMRUT cities a well leveled liquid management.

Rs. 1,41,678 crore will be allocated to "Urban swachh Bharat Mission 2.0" which will be launched for 5 years with aim of complete fecal sludge management and wastewater treatment, etc.

Rs. 2,217 crores for tackling the problem of air pollution in 42 urban centers.

Scrapping Policy: FM announced the scrappage policy to encourage fuel-efficient vehicles, environment-friendly vehicles, etc. Vehicles after 15 years for commercial vehicles and 20 years for personal vehicles would undergo fitness tests This would help to boost automobile sales and can not be good for some vehicle owners. Further details to be announced by the Ministry later.

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The Pneumococcal Vaccine which is a Made in India product that is currently limited to only 5 stated will be rolled out across the country and this vaccine will save 50,000 child deaths annually. Government to provide Rs. 35,000 for the Covid-19 vaccine and the funds can be increased if required.

A budget outlay of Rs. 2,23,846 crore for Health and well-being against the outlay of Rs. 94,452 crore which is an increase of 137%.

Government to give Rs. 1.97 lakh crore over 5 years to create manufacturing giants of the world. This would help scaling sectors, create employment for the youth, etc.

With the launch of the scheme of "Mega Investment Textiles Parks (MITRA)" the government aims to attract large investments, boost employment, etc. Under this government will create 7 textile parks within a period of 3 years.

FM in December announced the launch of "National Infrastructure Pipeline(NIP)", it was launched with 6835 projects and currently have around 7,400 projects. Completion of 218 projects worth Rs. 1.10 lakh crore.

Development Financial Institution(DFI) will be formed and will be given Rs.20,000 to capitalize itself and have the aim of reaching a lending portfolio of Rs. 5 lakh crore in 3 years.

Funds will be allocated to infrastructure and real estate will help in easing of finances to InVITs (Infrastructure Investment Trust) and REITs(Real Estate Investment Trust).

An Asset Monetization dashboard will be created to track the progress and provide visibility to investors.

(a) An one InvIT has been sponsored by each National Highway Authority of India (NHAI) and PGCIL to attract NHAI and PGCIL. 5 operational roads with an enterprise value of Rs. 5000 crore transferred to NHAI InvIT and Rs. 7000 crore transferred to PGCIL InvIT.

(b) After commissioning, for operations and maintenance Monetization of Dedicated Freight Corridor assets by Railways.

(c) For operations and management concession monetization of the next lot of airports will be done. 

(d) Under the asset monetization Programme core other assets that will be rolled out are:

→NHAI Operational Toll Roads

→Transmission assets of PGCIL

→Oil and Gas pipeline of GAIL, IOCL, and HPCL

→AAI airports in Tier 1, Tier 2, and Tier 3

→Other railway assets

→Warehousing assets of CPSEs such as Central Warehousing Corporation and NAFED among others

→Sports Stadium

For capital expenditure, they had provided Rs. 4.12 lakh crore for BE(Budget Estimate) 2020-21 and capital expenditure for RE(Revised Estimate) 2020-21 was Rs. 4.39 lakh crore. For 2021-22 capital expenditure is 34.5% increased to Rs. 5.54 lakh crore. for BE 2021-22. out of this Rs. 44,000 crore is kept for the Department of Economic Affairs for projects, programs, and departments.

For capital expenditure, Rs. 2 lakh crore is provided to States and Autonomous bodies.

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Rs. 5.35 lakh crore "Bharatmala Pariyojana", Rs. 3.3 lakh crore has already been awarded for 13000 km length of roads and awarding for another 8,500 km and an additional 11,000 km of national highway corridors by March 2022.

Planning for further augmentation of more economic corridors and road infrastructure is being planned. A few of them are:

(a) Investment of Rs. 1.03 lakh crore for 3,500 km of National Highway works in the state of Tamil Nadu.

(b) Investment of Rs. 25,000 crore for 1,100 km of National Highway works in the state of Kerala including 600 km of Mumbai - Kanyakumari corridor in the state of Kerala.

(c) Investment of Rs. 25,000 crore for 675km of National Highway works in the state of West Bengal including up-gradation of Kolkata - Siliguri road.

(d) Investment of Rs. 19,000 crore to National Highway works in the state of Assam which is currently in progress.

In the upcoming 3 years, the states will further undertake more than 13,000 km of National Highways for more than Rs. 34,000 crore.

FM gave the Ministry of Road Transport and Highways Rs. 1,18,101 lakh crore out of which for capital Rs. 1,08,230  crores which are the highest ever.

The national plan for India-2030 has been prepared by Indian Railways. Strategies to bring down logistics cost to enable "Made in India" For Railways Rs. 1,10,055 crores out of which for capital expenditure Rs. 1,07,100 crore will be given.

To increase the share of public transport in urban areas. The government will launch a new scheme worth Rs. 18,000 crore for augmentation public bus transport and new 1,016 km of the metro to be made. To run metros at Tier 1 and Tier 2 cities at a lesser cost with the same experience, convenience, and safety new technologies like 'MetroLite' and 'MeteroNeo'.

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Funding to be provided to:

(a) At Rs. 1957.05 crores 11.5 km of Kochi Metro Railway Phase-2

(b) At Rs. 63,246 crores 118.9 km of Chennai Metro Railway Phase-2

(c) At Rs. 14,788 crores 58.9 km of Bengaluru Metro Railway Phase 2A and 2B

(d) At Rs. 5,976 crores and Rs. 2,092 crores Nagpur Metro Railway Phase-2 and Nashik Metro

There are monopolies among power distribution companies so to remove those monopolies and provide consumer choice privatization of DISCOMS will be done. Over 5 years a scheme will be launched worth Rs. 3,05,984 crores to provide support to the privatization of DISCOMS(Power Distribution Companies).PM in 3rd Re-inVest Conference announced the launch of the National Hydrogen Mission and this mission will be launched in 2021-22 to generate hydrogen from non-polluting or green power sources.

Recycling of ship act under which around 90 shipyards have achieved compliant certificates. The target of importing more ships from Europe and Japan and with a 405 Million Light Displacement Tonne (LDT) to get doubled by 2024 and this is expected to create new jobs for 1.5 lakh people.

Government to support world-class Fin-Tech hub at GIFT-IFSC. Under Insurance Act, 1938 permissible FDI limit to be increased from 49% to 74% in Insurance Companies. At least 50% of directors on the board should be independent directors and the majority of directors on the board should be an Indian resident. and a specific percentage of profits to be retained as a general reserve.

Capital of Rs. 1,000 crores to Solar Energy Corporation of India and Rs. 1,500 crores to Indian Renewable Energy Development Agency to be infused to boost the non-conventional energy sector.

To clean up the bank books set up of (Bad Bank) Asset Reconstruction Company and Asset Management Company, it would be taking over the current NPAs and then dispose them potential investors and Alternate Investment Funds for value realization.

When a bank gets into stress the depositors unable to withdraw their money which makes them stress so for ease of depositors increase in deposit insurance cover from Rs. 1 lakh to Rs. 5 Lakh.

Minimum asset portfolio of Rs. 100 crore for NBFC to maintain credit discipline and recovery of debt under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 minimum loan size eligible for recovery is reduced from Rs. 50 lakh to Rs. 20 lakh.

Incorporation of One Person Company(OPC) reduction of residency for Indian citizens from 182 days to 120 days and also allowing NRIs to set up OPC.

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Disinvestment in BPCL, Air India, Shipping Corporation of India, IDBI Bank, BEML, etc. to be completed in 2021-22 and privatization of two PSBs and one general insurance company. LIC IPO to be out in 2021-22. Rs. 1,75,000 crores of disinvestment estimate for BE 2021-22.

Inclusive Development for Aspirational India

MSP is 1.5 times the cost of production of commodities. Credit target of Rs. 16.5 lakh crores to provide credit to farmers for FY22.

Increase in allocation from Rs. 30,000 crores to Rs. 40,000 crores. Under NABARD Rs. 5000 crore has been assigned for Micro Irrigation Fund and doubles the amount by another Rs. 5000 crores.

Registration of 1.68 crore farmers has been done on e-NAM and trades valued at Rs. 1.14 lakh crore has been done through e-NAM.

Investments will be made for the development of modern fishing harbors and fish landing centers: Chennai, Kochi, Visakhapatnam, Petuaghat, and Paradip. Multipurpose seaweed parks will be established in Tamil Nadu to promote seaweed.

For the MSME sector Rs. 15,700 crore has been provided which is double this year's BE.

That's all for Budget Summary... 

Until next BlueSten Markets Update...

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