Union Budget 2021: Key Highlights

The Finance Minister (FM) Nirmala Sitharaman presented India’s first ‘paperless’ Union Budget 2021, on February 1, 2021. Here are the key highlights from her budget speech:

The FM announced the Jal Jeevan Mission with an outlay of Rs 2.87 lakh crores, aiming to provide full-fledged water supply to all urban local bodies with household tap connections and proposed Rs 1.41 lakh crores over a period of five years, for the Urban Swacch Bharath 2.0. In addition to this, an amount of Rs 1.47 lakh crores over a five-year period, from 2021, has been assigned for initiatives such as wastewater treatment, reduction in plastic waste and reduction in pollution. To tackle the burgeoning problem of air pollution, the FM proposed to provide an amount of Rs 2,217 crores for 42 urban centres with a million-plus population in this budget.

Sitharaman proposed an amount of Rs 1.97 lakh crores, over five years, starting this FY to nurture global manufacturing champions and increase jobs for the youth. She also proposed a mega-investment textile park to be launched, along with seven more textile parks to be established over the next three years.

The FM proposed the following National Highway budgets for the below states:

Sitharaman further announced that the National Rail Plan 2030 had been formulated to prepare a future rail system in India which will also bring down logistics costs.

The next few phases of metro projects will be taken up in five cities including Kochi, Chennai, Bengaluru, Nagpur and Nashik. Also in line are the 'Metro Lite' and 'Metro Neo’ concepts, which will be implemented in Tier II and III cities.

The FM announced that the 'one nation-one ration card' plan had been implemented by 32 States and UTs, which is benefitting migrant workers, as they can claim ration from anywhere in the country. A portal that will collect relevant information on gig, building, and construction workers, among others, will be launched, which will help formulate health, housing, skill, insurance, credit and food schemes for migrant workers. Additionally, social security benefits will extend to gig and platform workers. Minimum wages will apply to all categories of workers and they will all be covered by the Employees State Insurance Corporation (ESIC) .

The FM announced that the deduction under section 80EEA will be extended to loans taken up to 31 March, 2022. Additionally, affordable housing projects can avail of the tax holiday till 31 March, 2022. The move has been welcomed by realty experts, as it will boost demand, as well as the supply of affordable housing units in the market.

The FM announced in Budget 2021 that the ITR will now have capital gains, dividend incomes and interest income pre-filled, apart from salary, TDS, etc. Apart from this, senior citizens of age 75 and above who get pensions and interest income, need not submit income tax (IT) returns.

The FM announced that debt financing of Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs) by foreign portfolio investors will be enabled, by making suitable amendments in the relevant legislations. This will further ease access of finance to InvITs and REITs, thus, augmenting funds for the infrastructure and realty sectors.

A new, centrally-sponsored scheme, PM Atmanirbhar Swasth Bharat Yojana, will be launched with an outlay of about Rs 64,180 crores over six years. This will develop capacities of primary, secondary and tertiary care health systems, strengthen existing national institutions and create new institutions to cater to the detection and cure of new and emerging diseases. This will be in addition to the National Health Mission.

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July 5, 2019:

The expectations were high from Modi 2.0’s first Budget. The real estate sector too had its expectations, especially to help fuel growth in the segment. Here are the highlights of what the Union Budget 2019-20 had in store for the real estate sector and the home buyers.  

Individual taxpayers, including the salaried class, pensioners and senior citizens, with a taxable income of Rs 5 lakh will be given full tax rebate. Peak tax for those in the higher salary bracket has been increased. Individuals with income between Rs 2 to 5 crores will have to pay tax at the rate of 39 per cent while individuals earning over Rs 5 crores, will have to pay an effective peak tax rate of 42.7 per cent.  

For corporates, that have an annual turnover of Rs 400 crores will now be able to pay tax at a rate of 25%. This was earlier applicable to corporates with an annual turnover of up to Rs 250 crores. This move will cover 99.3 per cent of all the companies.  

Additionally, those withdrawing Rs 1 crore cash or more from the banks, will be levied a TDS (tax deducted at source) of two per cent. 

For the realisation of the goal of Housing for All by 2022, the government in its last budget had provided a tax holiday to the developers. This year, the finance minister has proposed an additional interest deduction of up to Rs 1.5 lakh on a home loan of up to Rs 30 lakhs on home loans borrowed up to March 31, 2020. This move will take the total interest deduction to Rs 3.5 lakhs while translating to a benefit of Rs 7 lakhs for borrowers, for a 15 year period of home loan. 

Under PMAY Gramin, Sitharaman informed that a total of 1.5 crore rural homes have been completed in the past five years and another 1.59 crore houses were proposed to be provided to eligible beneficiaries. These homes will have toilets, electricity and gas connection. For PMAY Urban, over 81 lakh houses with an investment of Rs 4.83 lakh crores had been sanctioned. Construction of 45 lakh such homes had already started while 24 lakh homes have been delivered to the beneficiaries. Of these, over 13 lakh homes have been constructed using new-age technology. These new-age technologies such as DBT, has also helped in reducing the time taken to construct a home under PMAY. While it took an average of 314 days to complete a house under PMAY in 2014-15, it is now taking an average of 114 days.  

According to Sitharaman, over 9.64 crore toilets have been constructed since the launch of the mission on October 2, 2014. So far, over 6,000 villages and nearly 95 per cent of the cities have become open-defecation free (ODF) . The finance minister in the budget, proposed to expand this mission and undertake solid waste management in every village. With the progress, the government plans to achieve its targets set under the Swachh Bharat mission by October 2019. 

The government has prioritised providing safe drinking water to every citizen by 2024, under the Har Ghar Jal scheme. In her speech, Sitharaman said, "This new ministry will look at the management of our water resources and water supply in an integrated and holistic manner and will work with states to ensure Har Ghar Jal, to all rural households by 2024 under Jal Jeevan Mission." She also announced access to electricity to every household, by 2022. 

“Several reforms would be undertaken to promote rental housing as the current rental laws are archaic and they do not address the lessor-lessee relationships fairly,” said Sitharaman. The Model Tenancy Law will be finalised and circulated to states, she added.  

For the faster adoption of electric cars/vehicles, the finance minister proposes an upfront incentive when making a purchase. She also mentioned that the government has already moved the GST Council to lower the tax rate on electric vehicles from the existing 12 per cent to 5 per cent. In the budget, Sitharaman also proposed an additional income tax deduction of Rs 1.5 lakh to taxpayers purchasing an electric vehicle, to encourage more people to buy these environmentally friendly vehicles.   

Railways infrastructure in India, according to Sitharaman, needs an investment of Rs 50 lakh crores till 2030. This can be done by using the model of public-private partnership (PPP) .  

She also focused on schemes such as Bharatmala, Sagarmala, freight corridors, industrial corridors, Pradhan Mantri Gram Sadak Yojana and UDAN that will be key in bridging the rural-urban divide and improve transport infrastructure.  

She also promoted the idea of a PPP model in accelerating the development of suburban railways, the Regional Rapid Transit Systems and the Metro networks. According to Sitharaman, 657 kilometres of Metro route has become operational so far. In 2018-19, 300 kms of new Metro routes were approved and another 210 kms became operational. 

To ease traveling across the country, a national common mobility card will be introduced. This will enable people to pay for multiple transport charges. This card will run on Rupay and will allow users to pay for bus, toll, parking charges, retail shopping and also to withdraw money. 

The finance minister proposed the Reserve Bank of India (RBI) to regulate the housing finance companies. Moreover, PAN and Aadhaar have now been made interchangeable, allowing those who do not have a PAN card, to file IT returns. 

(With inputs from Gunjan Piplani)