Union Budget 2021 Analysis – Key highlights list for You

Finance minister Nirmala Sitharaman presented the Union Budget 2021-2022 in the Lok Sabha. She presented a paperless budget for the first time. 

With enhanced research, we have come out with useful highlights for you. Take a quick glance to understand the whole budget.

Highlights:

HEALTH and SANITATION

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

EDUCATION

1. 100 new Sainik schools to be set up.
2. 750 Eklavya schools to be set up in tribal areas.
3. A central university to come up in Ladakh.

INFRASTRUCTURE

1. Vehicle scrapping policy to phase out old and unfit vehicles.
2. All vehicles to undergo a fitness test in automated fitness centers every 20 years for personal vehicles and every 15 years for commercial vehicles.
3. Highway and roadworks announced in Kerala, Tamil Nadi, West Bengal, and Assam.
4. National monetizing pipeline launched to monitor asset monetization process.
5. National rail plan created to bring a future-ready Railway system by 2030.
6. 100% electrification to be completed by 2023.
7. Metro services announced in 27 cities, plus additional allocations for Kochi Metro, Chennai Metro phase 2.
8. National Hydrogen Mission to be launched for generating hydrogen from green power sources.
9. Recycling capacity of ports to be doubled by 2024.
10. Gas pipeline project to be set up in J&K.
11. LPG scheme to be extended to cover 1 crore more beneficiaries.

TAX 

1. No IT filing for people above 75 years.
2. The reopening window for IT assessment cases reduced from 6 to 3 years. However, in case of serious tax evasion cases, it can go up to 10 years.
3. Affordable housing projects to get a tax holiday for one year.
4. Compliance burden of small trusts whose annual receipts do not exceed 5 crores to be eased.
5. Customs duty on gold and silver to be rationalized.

ECONOMY and FINANCE

1. The fiscal deficit stands at 9.5% of the GDP; estimated to be 6.8% in 2021-2022
2. A unified securities market code to be created, consolidating provisions of the Sebi Act, Depositories Act, and two other laws.
3. Proposal to increase FDI limit from 49% to 74%
4. An asset reconstruction company will be set up to take over stressed loans.
5. Deposit insurance increased from Rs. 1 lakh to Rs. 5 lakh for bank depositors.
6. Proposal to decriminalize Limited Liability Partnership Act of 2008

AGRICULTURE 

1. Agricultural fund to be made available for APMC’s for augmenting their infrastructure.
2. 1,000 more Mandis to be integrated into the E-NAM market place.
3. Five major fishing hubs, including Chennai, Kochi, and Paradip to be developed

This annual budget is both goal-oriented and balanced. The union budget mainly focused on the healthcare and infrastructure sector.

This is a clear signal to strengthen the country against the pandemic situation and boost the national economy in the coming future.

What is there for the stock market investors?

As in the budget announcement week, there is a surge in stock prices. The stock market has warmly welcomed the FY21 budget. Several strong pillars for that are

1. The focus on the Infrastructure and Manufacturing sector for the FY21 will increase the capital expenditure cycle.
2. Except for certain tweaks, the taxation will help boost up production.
3. The lower interest rates will attract foreign investors and add more liquidity to the market. 

This is the time to rebalance portfolios again and make changes that go with the projection of FY21. Choose some better debt funds and take SIPs for shifting gradually to equities over the period of a year.
Remember, “Being invested is the best investment.”

Consult with your financial advisor before any kind of investment. All the best for your financial goals and strategies.