Missed out on the budget? Catch up on all the highlights and what they mean for you here.

The Union Budget 2021-22 came at a time when India is ailing from a COVID-battered economy, and its healthcare infrastructure has been stretched to the limit. During her speech, Finance Minister Nirmala Sitharaman said that the Budget proposals for this financial year rest on six pillars — health and well-being, physical and financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D, and ‘Minimum Government, Maximum Governance’. Let’s take a look at the major highlights of Union Budget 2021:

Health and Sanitation

• A new scheme, titled PM Atma Nirbhar Swasthya Bharat Yojana, to be launched to develop primary, secondary and tertiary healthcare.
• Mission POSHAN 2.0 to improve nutritional outcomes across 112 aspirational districts.
• Operationalisation of 17 new public health units at points of entry.
• Modernising of existing health units at 32 airports, 15 seaports and land ports.
• Jal Jeevan Mission Urban aimed at better water supply nationwide.
• Strengthening of Urban Swachh Bharat Mission.

Adhil Shetty, CEO, BankBazaar.com’s take: India has extremely low insurance penetration. The National Sample Survey Office conducted a survey between 2017 and 2018, sampling 113,823 urban and rural households. The findings indicate that a whopping 85.9 percent of the rural and 80.9 percent of the urban population did not have health insurance. The survey reported that out-of-pocket expenses for a single hospitalisation in private hospitals costs Rs. 15,937 in rural areas and up to Rs.22,031 in urban areas. Around 79.5 percent of the rural population paid their hospital bills independently, even selling physical assets, while 13.4 percent borrowed. It’s clear healthcare problems greatly strain the average Indian’s finances. In urban areas, 83.7 percent of families paid out of their savings, with 8.5 percent relying on loans. Therefore, greater funding of public healthcare – especially in the light of a crippling pandemic – is most welcome. We await the operational details of the scheme now.

Infrastructure

• Vehicle scrapping policy to phase out old and unfit vehicles –  all vehicles to undergo fitness test in automated fitness centres every 20 years (personal vehicles), every 15 years (commercial vehicles).
• Highway and road works announced in Kerala, Tamil Nadu, West Bengal and Assam.
• National Asset Monetising Pipeline launched to monitor asset monetisation process.
• National Rail Plan created to bring a future-ready Railway system by 2030.
• 100% electrification of Railways to be completed by 2023.
• Metro services announced in 27 cities, plus additional allocations for Kochi Metro, Chennai Metro Phase 2, Bengaluru Metro Phase 2A and B, Nashik and Nagpur Metros.
• National Hydrogen Mission to be launched to generate hydrogen from green power sources.
• Recycling capacity of ports to be doubled by 2024.
• Gas pipeline project to be set up in Jammu and Kashmir.
• Pradhan Mantri Ujjwala Yojana (LPG scheme) to be extended to cover 1 crore more beneficiaries.

Adhil Shetty, CEO, BankBazaar.com’s take: Apart from curbing pollution, the new scrappage policy and the development of road infrastructure should boost demand for automobiles along with auto loans and insurance. The auto sector is often seen as an indicator of economic growth and, therefore, boosts to it will be good to see.

Tax

• No IT filing for people above 75 years who get pension and earn interest from deposits.
• Reopening window for IT assessment cases reduced from 6 to 3 years. However, in case of serious tax-evasion cases (Rs. 50 lakh or more), it can go up to 10 years.
• Affordable housing projects to get a tax holiday for one year.
• Compliance burden of small trusts whose annual receipts does not exceed Rs. 5 crore to be eased.
• Duty of copper scrap reduced to 2.5%.
• Custom duty on gold and silver to be rationalised.
• Duty on naphtha reduced to 2.5%.
• Duty on solar inverters raised from 5% to 20%, and on solar lanterns from 5% to 15%.
• All nylon products charged with 5% customs duty.
• Tunnel boring machines to attract customs duty of 7%.
• Customs duty on cotton raised from 0 to 10%.
• Agriculture infrastructure and development cess proposed on certain items including urea, apples, crude soyabean and sunflower oil, crude palm oil, kabuli chana and peas.

Economy and Finance

• Fiscal deficit stands at 9.5% of the GDP; estimated to be 6.8% in 2021-22.
• Proposal to allow States to raise borrowings up to 4% of GSDP this year.
• A Unified Securities Market Code to be created, consolidating provisions of the Sebi Act, Depositories Act, and two other laws.
• Proposal to increase FDI limit from 49% to 74%.
• An asset reconstruction company will be set up to take over stressed loans.
• Deposit insurance increased from Rs 1 lakh to Rs 5 lakh for bank depositors.
• Proposal to decriminalise Limited Liability Partnership Act of 2008.
• Two PSU banks and one general insurance firm to be disinvested this year.
• An IPO of LIC to debut this fiscal.
• Strategic sale of BPCL, IDBI Bank, Air India to be completed.

Adhil Shetty, CEO, BankBazaar.com’s take:

DICGC

The government’s move to streamline the deposit insurance claims is welcome. Last year, the government had increased the deposit insurance coverage from Rs. 1 lakh to Rs. 5 lakh in the interest of depositors. But the claim could only be made if the bank’s license was cancelled and its liquidation proceedings were started. Now as per the latest announcement, bank customers whose accounts are frozen can also expect to get access to their funds up to the insurance limit. This is a positive development and protects bank customers from the kind of situations we had seen in the recent past when the RBI had imposed moratorium on banks and limited access to deposits.

Digital Payments

Digital payments are here to stay and we’re going to see greater adoption of modes such as UPI, netbanking, and Credit Cards. The announcement to incentivise digital payments with an allocation of Rs. 1500 crore should help various payment gateways compete with zero-charge options such as Rupay and UPI.

FDI In Insurance

Good development since this is a long-term ask of the industry to bring in capital and growth. The FM mentioned safeguards in terms of retention of profit in reserve and residency status of directors which are mitigation to risks. We support this.