The Union Budget of 2021 focused on 6 major sectors of the Indian economy. This Budget was designed to resonate with the Government’s vision of making India ‘Aatma Nirbhar’. Furthermore, it is structured to strengthen the nation’s marketplace and help it bounce back from the financial crises brought about by the Corona Virus pandemic.
This article aims to provide an insight about the sources for inflow and suggested outflow in the Budget of 2021. However, these proposals are yet to be ratified. The size of the Union Budget 2021 is INR 34.83 Lakh Crores.
To meet the size of the Budget, the sources of inflow are:
|Source||Contribution (in percentage)|
|Borrowings & Other Liabilities||36%|
|Goods and Services Tax||15%|
|Union Excise Duties||8%|
|Non-Debt Capital Receipts||5%|
- Total receipts are inclusive of States’ share of taxes and duties.
Money from the Budget is allotted to various sectors and also assigned to meet expenses. In brief, the outflow is planned as follows:
|Sector/Expense||Share (in percentage)|
|States’ share of taxes & duties||16%|
|Central Sector Scheme||13%|
|Finance Commision & other transfers||10%|
|Centrally Sponsored Scheme||9%|
- Total expenditure is inclusive of the States’ share of taxes and duties.
A Fiscal Deficit of INR 15.1 Lakh Crores is respected from this Budget.
The Budget has explicitly mentioned specific sectors that need attention. The funds allocated for these individual sectors are listed below:
There has been a considerable increase in the amount of money allotted for investment in this sector.
- This sector was assigned INR 94,452 crores in the previous year. However, in this Budget, the allocated amount has been increased to Rs 2,23,846 crores.
- Furthermore, INR 64,180 crores is set aside for the PM AatmaNirbhar Swasth Bharat Yojana and will be spread across 6 years.
- To meet the requirements of the most essential Covide-19 vaccine, INR 35,000 crore is set aside.
The JalJeevn Mission is set to be launched in the coming 5 years, and a total amount of INR 1,41,678 is allotted for the same.
- AatmaNirbhar Bharat-Production Linked Incentive Scheme: For this scheme, a total of INR 1.97 Lakh crores has been committed (for the next 5 years, beginning from FY 2021-22).
- Around 217 infrastructure projects amounting to over INR 1.10 Lakh Crores have been completed. The Government has already provided a sum of INR 20,000 Crores to capitalize on financial institutions and aims to provide at least INR 5 Lakh Crores more in the next 3 years.
The Finance Minister has announced the completion of over 13,000 km of road. This would cost around INR 3.3 Lakh Crores.
A total of INR 18,000 Crores will be spent to support the augmentation of public transport, mainly busses and metros.
The finance minister promised an outlay of INR 3,05,984 Crores over the next five years to revamp the power distribution sector.
While the government is figuring out a schema for the post-pandemic new world, they have also made amendments in the laws (for direct and indirect taxes) that will help them collect enough taxes while also giving some relief to taxpayers who are the most burdened. Hopefully, this will increase India’s GDP and make up for some of the fiscal deficit caused by the pandemic.