Finance Minister Nirmala Sitharaman presented her third and Narendra Modi government’s ninth Budget on Februrary 1, 2021.
Here are the updates:
Budget has vision of self-reliance: PM Modi
Prime Minister Narendra Modi hailed the Union Budget, saying it has the vision of ‘Aatmanirbharta’ (self-reliance) and addresses all sections of the society.
Mr. Modi termed the Union Budget for 2021-22 one which not only built the confidence of people in the unprecedented pandemic-hit circumstances but also had “the farmer and India’s villages in its heart”.
Speaking via a public broadcast on television after the tabling of the Budget, Mr. Modi commended Finance Minister Nirmala Sitharaman for the balancing act that she did looking at the challenges thrown up by COVID-19. “Our government’s response to Corona pandemic has never been reactive but proactive,” he said.
“The Budget focusses on increasing farmers’ income; several measures have been taken in this direction. Farmers will be able to get loans easily. Provisions have been made to strengthen Agricultural Produce Marketing Committees [APMC] markets with the help of the Agriculture Infrastructure Fund,” he stated.
A reassuring Budget: Biocon executive chairperson
Kiran Mazumdar Shaw, executive chairperson, Biocon Ltd.: “Overall, a reassuring Budget with no negative surprises that has buoyed overall sentiment. Healthcare & well-being has received top priority in this Budget, with more than doubling of the outlay to ₹2,23,846 crore, including the allocation of ₹35,400 crore towards COVID-19 vaccination and ₹64,184 Cr for a new scheme to strengthen the country’s primary, secondary and tertiary health infrastructure.
“Other positives include the higher spending on infrastructure, the push for bank privatisation, increased funding for strengthening the public sector R&D and innovation ecosystem, as well, as increasing the FDI cap in insurance from 49% to 74%. Monetisation of public sector assets including land is an important policy plan which must be implemented expeditiously to support the mega infra projects.”
FM’s emphasis on healthcare will encourage innovation: SII CEO
Adar Poonawalla, CEO, Serum Institute of India: “Globally, spending on healthcare infrastructure and vaccine have given countries and their economies the best bang for their buck. Investments in these areas have prevented hospitalisations and resulted in a healthier and more productive workforce, thereby leading to an efficient economy.
“Therefore we welcome the FM’s emphasis on healthcare spending and immunisation, especially for COVID-19 and the pneumococcal vaccines as this will help India recover rapidly from this pandemic. Hopefully, this will also encourage more innovation and expansion in the sector.”
Several positive signals for manufacturing, commercial vehicles sector: Ashok Leyland MD
Vipin Sondhi, MD & CEO, Ashok Leyland: “The Union Budget 2021 has several positive signals for the manufacturing sector and the commercial vehicles (CV) sector, which are core to the economy. I would like to mention four specific areas that we feel could provide the much needed demand impetus to the CV sector.
“Firstly, the commitment to augment our country’s road infrastructure with projects for building 8,500 km of highways and economic corridors augurs well for surface and road transport.
“Secondly, a ₹18,000-crore scheme to augment public transport in urban areas with the addition of 20,000 new buses in a PPP model would ensure cleaner and efficient public transportation and ease congestion.
“Thirdly, the assurance of implementing a voluntary scrappage policy, for 20 years for personal vehicles and 15 years for commercial vehicles is positive. This is good for the environment and good for setting in motion a circular economy. However, we await further details of the policy, as the industry had requested for an incentive-based scrappage policy for it to be effective.
“Lastly, the emphasis on rejuvenating the manufacturing sector with double digit sustainable growth is reassuring as manufacturing would be a big job creator. The thrust on R&D for National Priority Projects and the PLI scheme will be key enablers to attain our Prime Minister’s vision for Aatmanirbharta in the manufacturing sector.”
A growth-oriented Budget: Dr. Reddy’s Laboratories chairman
Dr. Reddy’s Laboratories chairman Satish Reddy: “It is a growth-oriented Budget with a lot of positive interventions, and with something in it for everyone.
“On healthcare, the government has taken a big step with an outlay of ₹2.23 lakh crores, a 137% increase from last year, a step that was long overdue. On innovation and R&D, the additional allocation of ₹50,000 crore over five years through the National Research Foundation marks a good beginning in improving the research eco-system in the country.
“As with all Budgets, there are concrete proposals that are encouraging but it is the execution that finally matters and I hope this time the government gets it right.
Budget justifiably focused on resetting the Indian economy: Cognizant India chairman
Rajesh Nambiar, chairman and managing director for India, Cognizant: “Coming as it does during an unprecedented global crisis, the Union Budget for 2021 is justifiably focused on resetting the Indian economy and enabling it to emerge from the shadows of a prolonged and unforeseen disruption.
“The accent on improving healthcare, manufacturing and infrastructure as part of India’s mission to drive greater self-reliance will not only create more employment opportunities, but also accelerate the country’s shift towards digital modernisation and transformation that have become a key competitive differentiator in the new normal for businesses and governments alike.”
Rationalisation of import duty on gold a welcome move: World Gold Council India MD
Somasundaram P.R., managing director, India, World Gold Council: “The rationalisation of import duty on gold to around 10.75% from 12.5% is a welcome move and timely. Hopefully, this is the first of a series of such cuts to make bullion an asset class that operates mainstream.
“It is a much needed incentive for the organised and compliant players in the bullion and gold jewellery market. A rationalised duty structure and simplified processes are fundamental to an organised trading market.
“Following appointment of IFSCA to regulate the International Bullion Exchange at GIFT City last year, the regulatory clarity in this budget around a domestic bullion exchange will spur infrastructure development and good delivery standards, enabling India to emerge as a major bullion trading hub.”
Focus on healthcare a positive step: secretary general of Indian Pharmaceutical Alliance
Sudarshan Jain, secretary general, Indian Pharmaceutical Alliance: “Focus on healthcare infrastructure in FY22 Budget is a positive step towards growth with a 137% increase in allocation to the sector at ₹2,23,846 crore. The allocation of ₹64,000 crore, over six years, on the PM Atmanirbhar Swasth Bharat Yojna will help boost the healthcare infrastructure across primary, secondary and tertiary care.
“COVID-19 pandemic is an unprecedented time and has brought importance to healthcare in India. The vaccination programme is well-funded with over ₹35,000 crore, it will help the country address the pandemic. All these initiatives are pointers to increased investment in healthcare infrastructure and will strengthen the sector going forward.”
Historic budget with growth as the centre piece: CII president
CII president Uday Kotak: “Delivering on her promise of unveiling a ‘Budget Like No Other’, the Finance Minister announced a raft of prudent measures aimed at rejuvenating government spending towards critical areas of increasing allocation on infrastructure expansion, education, housing and health as India rolls out a vaccine drive to inoculate 1.3 billion people.
“Laying down the vision for providing further fillip to the government’s flagship Aatmanirbhar Bharat Programme by spelling out the measures under the critical six pillars, the Budget ticked all the right boxes which would strengthen the path of recovery of the economy. This is a budget catering to all aspects of lives, livelihoods and growth.”
Recognising the need for giving infrastructure investments a renewed push, Mr. Kotak said that the sector received key priority from the government in the form of several important announcements. The announcement regarding the setting up of the Development Financial Institution (DFI) which is likely to play a critical role in channelizing investments in infrastructure and other key sectors of the economy, is in line with CII’s recommendations.
“In addition, the setting up of National Asset Monetisation Pipeline is a great initiative by the government and is likely to not only boost sentiment but will also generate additional resources for the government. This is something which CII has been very strongly advocating with the government.”
Other measures such as setting up of seven Mega Investment Textile parks, giving choice to consumers to chose from more than one distribution company to buy power are in line with CII’s recommendations.
“We recognise that the commitment of the present government to spur growth is not limited to announcements in the Budget alone. The three tranches of the Aatmanirbhar Bharat ably demonstrates this intent. In this regard, I would like to mention that the Budget presentation marks an ongoing process rather than a one-off approach in making the recovery process more robust and equitable.”
Greater impetus to manufacturing sector a welcome move: L&T Technology Services CEO
Keshab Panda, CEO & MD, L&T Technology Services: “The move to provide greater impetus to India’s manufacturing sector with outlay of almost ₹2 trillion over the next five years is indeed a welcome move.
“We are hopeful, this will pave the way for enhanced adoption of digital engineering capabilities by domestic players, especially in the Industry 4.0 segment, to give them a global edge. With patents and innovations being at the core of our proposition as a pure-play engineering services provider, it was encouraging to know that Innovation and R&D was classified under the six pillars of focus for this year’s union budget.
“Unlike last year where explicit mention to initiatives such as National Mission on Quantum Computing and Technology were announced, one would have hoped that this year’s budget would have made provision for further focus.”
Scrappage policy without real benefits: joint secretary of All India Transporters Welfare Association
“Much awaited scrappage policy without any real benefits for scrapping.
“No real change in diesel prices which is sky rocketing. No reduction in GST rates for CVs which is still at 28%
“Section 44AE of Income Tax not modified which insists that small truckers must pay income tax at ridiculous income level.
“Section 194N of Income Tax which applies TCS burden on cash withdrawal not given any relief to transport sector which increases finance burden.
“Under GST the provisions of Section 129 not modified in favour. Instead 200% of tax is charged as penalty now for an expired document even though tax is paid.
“All in all, nothing for the road transport sector to be even remotely happy about. Complete disappointment!”
Enhanced capital expenditure will create livelihoods: ITC chairman
Sanjiv Puri, chairman & managing director, ITC Limited: “It is a visionary and growth-oriented budget that provides further impetus to build India’s competitiveness as also foster inclusive growth. The enhanced capital expenditure, particularly on infrastructure, will create livelihoods and provide an accelerated thrust to the V-shaped recovery trajectory.
“The heightened spends on agriculture and rural infrastructure development are aligned to the comprehensive policy interventions aimed at creating competitive agri value chains to raise farm incomes. These augur well for the economy and will spur a virtuous consumption-investment-employment cycle.”
Scrappage policy will create a safer, environment-friendly auto sector: Volkswagen India MD
Gurpratap Boparai, managing director, Škoda Auto Volkswagen India Private Limited: “The support announced for the rural economy and farm sector will be a big boost for wealth creation in the non-urban markets.
“The Union Budget for 2021-22 presented by Honorable Finance Minister Smt. Nirmala Sitharaman, augers well to create capacity for developmental and growth in the country. Increased outlays in the road sector, infrastructure development and introduction of the voluntary vehicle scrappage policy will not only create a safer and environment-friendly auto sector but also drive replacement demand in the sector.
“The support announced for the rural economy and farm sector will be a big boost for wealth creation in the non-urban markets and increase the scope for auto demand in these regions. While further details of the prior announced PLI scheme is awaited, the same is expected to help the Indian auto industry to improve production efficiency and become self-reliant – “Aatmanirbhar’.
“It is important to keep in mind that even in the coming financial year, the passenger vehicle market is unlikely to reach the level of 2018 and the much-required rationalisation of GST and cess to aid the auto industry was missing. Additionally, the increase in customs duty on certain auto parts to 15% will further increase input costs and prices for cars which depend on specialised components which cannot be manufactured locally due to unviable volumes.”
Budget will help in accomplishing a COVID-19-free country: Bharat Biotch CMD
Bharat Biotech CMD Krishna Ella: “It’s a great step and far-reaching budget announcement providing ₹35,000 crore for COVID-19 vaccination in 2021-22.
“The Finance Minister’s commitment to provide more funds towards containing spread of the pandemic in the country and an effective, smooth path for the vaccination scheme will help lead our nation towards accomplishing a COVID-19 disease-free Bharat.
“The ₹64,180 crore spending plan for healthcare over the next six years, on primary, secondary and tertiary healthcare, in addition to the National Health Mission is also a welcome move. It will strengthen public health services as 17,000 rural and 11,000 urban health and wellness centres and integrated public health labs to be set up in each district.
“The government’s focus on preventive health, curative health and well-being is reassuring,
Joint Managing Director Suchitra Ella welcomed the proposal for setting up of nine Bio Safety Lab (BSL). “Such facilities will boost research and scientific discoveries,” she said.
Stake sale move in public sector is a welcome move: Indian Bank MD & CEO
Padmaja Chunduru, MD & CEO of Indian Bank: “Stake sale by government in public sector companies and financial institutions, including 2 PSBs and one insurance company, in the next fiscal year is a welcome move.”
“Another important highlight of the Budget is the announcement of FDI in insurance from 49% to 74% which will attract more foreign players and lead to increased investments in the sector. In the long run this will help increase the penetration of insurance in the country.
“In terms of specific proposals for the banking sector, the FM announced an infusion of ₹20,000 crore into PSU Banks, this will provide a very boost credit growth. Also proposed is takeover of bank’s stressed assets by Asset Reconstruction Companies which will help the banks to free their books of bad loans and thereby more funds for lending. Besides it will help fetch better value for the asset by aggregating debt.
“Depositors of failed banks will now have access to funds’ faster as the FM has announced that if a failed bank has been put under watch by the RBI, the bank’s customers won’t have to wait for the institution to be liquidated to get funds insured by the Deposit Insurance and Credit Guarantee Corporation.
“The Budget has extended the tax holiday for start-ups by one more year providing boost to the start-up eco-system. Affordable Housing also gets necessary boost through tax incentives. Proposed reforms in taxation are also welcome.
“Overall, this is a good budget that aims to further the ‘Aatmanirbharta’ mission, by focusing on doubling farmers’ income, strong infrastructure, women’s empowerment, healthy India, good governance, education for all; jobs for the young. inclusive development; and ease of compliance for citizens and businesses.”
Budget will fuel job creation and boost economic momentum: Apollo Hospitals chairman
Dr. Prathap C. Reddy, chairman, Apollo Hospitals Group: “The COVID-19 pandemic was an unprecedented medical crisis and it underlined the importance of building a resilient healthcare infrastructure. Today, the Hon’ble Finance Minister’s said health was her first pillar and her announcements to develop primary, secondary and tertiary healthcare systems, greatly gladdened my heart. This ground-breaking focus on health which will provide access to medical care for all in our country, fuel job creation and boost economic momentum.
“India’s efforts in managing the pandemic have been exemplary — our frontline workers and scientists have been working tirelessly to save lives and develop indigenous vaccines. Now the allocation of ₹35,000 crores for COVID-19 vaccines and more if required, makes our glorious nation stand tall as a model for the world.
“We must now look at the next crisis of non-communicable diseases, which will be responsible for 80% of deaths and cause a 3.8 trillion USD burden to the country by 2030. It is important to focus on prevention, early detection and possible cure to protect Indian families from grief, financial burden and to help the GDP grow. India having proven its clinical excellence, should now focus on clinical trials, research, innovation and technology. There is potential for India to become the largest global health technology centre. As an additional opportunity, India can generate employment and be a healthcare service provider for the world.”
Pro-growth, pro-technology Budget: Lenovo Data Centre Group India MD
Vivek Sharma, MD – India, Lenovo Data Centre Group: “This is a pro-growth, pro-technology Budget with a vision to disinvest where required and re-energise infrastructure, healthcare, banking, and agriculture sectors through numerous employment and capital generating reforms.
“There is a strong focus on Digital India be it through setting a fintech hub at GIFT city, enhancing digital payments and use of Artificial Intelligence, Machine Learning etc. in governance, or making tax appellates faceless and tech enabled – all provide a solid foundation for a forward looking data-economy.”
Budget will boost toy industry: Red Ridge Global chairman
Vic Rana , group chairman, Red Ridge Global: “Looking at the world’s current crisis, the Budget presented by Finance Minister is welcoming. The decision of providing concessional BCD rate on various parts of electronic toys will boost the toy industry significantly in the coming years.
“Also, the government moving their focus on toy-based learning for lower level of school education will transform classroom transactions from rote learning to focused and delightful learning for students. However, time bound and transparent implementation will ensure success of the industry.”
Budget announcements augur well for the automotive sector: ACMA president
Deepak Jain, president, Automotive Component Manufacturers Association of India: “Announcements with regards increased spend on road infrastructure, voluntary scrappage policy, Research & Development and PLI among others, augur well for the automotive sector. Further, continued focus on building rural and agricultural infrastructure and prioritizing agriculture credit growth will have long-term positive impact on rural demand for vehicles.
“It is also heartening that the budget outlay for the MSME sector has been doubled compared to last year. The auto component industry is dominated by MSME and this will provide them the necessary succour as the industry recovers.”
Budget has raised raised the vision of an Atmanirbhar Bharat: CREDAI MCHI president
Deepak Goradia, president, CREDAI MCHI: “The first budget of the decade has raised the vision of an Atmanirbhar Bharat with huge impetus and spending on infrastructure — key to creation of jobs and reviving the economy in the post COVID-19 area.
“The 1 year extension to ₹1.5 lacs tax deduction on homebuyers’ loan for affordable housing units along with tax incentive for affordable housing developers is welcomed by the realty industry. This will continue to provide support to accomplish the ‘Housing for All’ mission.
“The tax simplification on dividend income to REIT’s and INVITS will help mobilise in new resources for new projects.
“We hope there are additional sector specific measures to support/boost towards the Indian realty sector.”
Growth-focussed budget: Co-founder of Client Associates
Rohit Sarin, co-founder of Client Associates, Private Wealth Management: “It’s a growth-focussed budget which is the need of the hour. The government has done well to bite the bullet of expansionary fiscal policy with 6.8% fiscal deficit in FY22 after 9.5% deficit in FY21. This would bring in much needed investment in healthcare, manufacturing and infrastructure which shall show up in higher growth of the GDP in the years to come. This has been balanced with staying away from populist schemes and tinkering with direct tax structure as distractions. Overall a growth oriented and focused budget.”
Health and infrastructure rightly occupied centre stage: ICRA principal economist
Aditi Nayar, principal economist, ICRA Limited: “As expected, health and infrastructure rightly occupied centre stage in the FY2022 Union Budget, with spending directed towards healing the COVID-19 induced scarring.
“Timely implementation of the plethora of well-targeted budget announcements, will hold the key for sustaining the nascent growth revival that is currently underway, and helping the Indian economy attain a higher growth trajectory over the medium term.
“Based on the FY2021 RE, expenditure is expected to more-than-double in Q4 FY2021. Moreover, the capital outlay for FY2022 exceeds our forecast and should support a higher pace of GDP expansion in the coming fiscal.
“Substantially higher-than-expected expenditure, including support to FCI, has pushed the fiscal deficit for FY2021 and FY2022 well above our projections. However, the dated market borrowings are only somewhat higher than what we had foreseen, casting a discordant note. In our view, yields are expected to sustain a hardening bias, in the absence of frequent OMOs.
“Moreover, the glide path for the correction in the Government of India’s fiscal deficit is both back-ended, and more modest than what we had expected.
“A higher fiscal deficit anchor for the State governments should allow them to prioritise capex and NIP funding, but add to the overall general government borrowings in the coming fiscal.”
Monumental decision to make healthcare affordable: Thyrocare Technologies CEO
Arindam Haldar, CEO, Thyrocare Technologies: “We applaud the government for the budget announcement, highlighting ₹64,180 crore investment over a period of six years to improve primary, secondary and tertiary healthcare, in addition to the National Health Mission. The critical announcement of building 17,000 rural and 11,000 urban health and wellness centres with integrated public health labs in each district marks for a monumental decision and the first step to making healthcare affordable and accessible to all.
“Healthcare has been bucketed under the six pillars of the Union Budget 2021-22 which underscores the importance of focus on healthcare. Preventive healthcare, is one of the critical areas called out in the budget under health infra, where the investment allotted will further encourage preventive healthcare, which is the need of the hour for our country.
“We at Thyrocare Technologies encourage preventive health check-ups and screenings to reduce the burden of sick care delivery which proves to be more cost heavy for citizens.”
Get well soon type of Budget: NAREDCO president
Dr. Niranjan Hiranandani, national president NAREDCO, commenting on the Union Budget, said, “It is a get well soon type of Budget, the ‘V’ shaped recovery being powered by the COVID-19 vaccination programme.
“On real estate aspects, the proposals for the annual budget reinforce the government’s focus on affordable housing. For the home buyer, the second extension of the deadline till 31 March 2022 for the additional ₹1.5 lakh tax deduction given on loans taken to buy a house in an affordable housing project is welcome, as is the developer whose affordable housing projects also get an extension for tax benefits, for projects completed till March 31, 2022.
Budget theme sell India: TMC
The TMC lashed out at the Centre over the Union Budget on Monday, saying it was 100 per cent “visionless” and its theme was “sell India.”
“India’s first paperless budget is also a 100% visionless budget. Theme of the fake budget is Sell India!” TMC spokesperson Derek O’Brien said
Budget, a case of ‘wrong diagnosis and prescription’: Congress
Terming the Union Budget as “directionless”, the Congress on Monday said it was a case of “wrong diagnosis and prescription”, and Finance Minister Nirmala Sitharaman could have been “brave” by extending help to the poor, but chose to be “timid”.
He further added that ‘One Nation, One Ration Card’ and increased spending on public health were two bright spots in an otherwise “directionless” budget which will be forgotten in a few weeks.
Terming the budget “disappointing” , Congress’ deputy leader in Lok Sabha Gaurav Gogoi alleged that the BJP has put India into insolvency and bankruptcy and is busy selling public-owned assets to 12-15 major companies.
“Rest of India which is struggling with rising costs, unemployment and corruption have to reconcile with a meaningless ‘Aatmanirbhar’ slogan,” he alleged.
Congress spokesperson Manish Tewari also alleged that the budget was a “national monetisation plan — short hand for National Sell out” and there was “no central focus in Budget”.
Senior Congress leader Shashi Tharoor took a dig at the Centre over the budget, saying “this BJP government reminds me of the garage mechanic who told his client, ‘I couldn’t fix your brakes, so I made your horn louder’.”
“After promising a century, FM is out hit wicket at Zero!! Instead of calling it as ‘budget of the century’ it will be remembered as ‘blunder of the century’ by BJP Government,” Congress spokesperson Jaiveer Shergill tweeted.
Growth oriented budget: CavinKare CMD
C.K. Ranganathan, Chairman & Managing Director, CavinKare Ltd termed it a growth oriented budget. He also welcomed the thrust given on infrastructure and rationalisation of custom duties. – Sanjay Vijayakumar
Budget for ‘Aatmanirbhar Bharat’, will strengthen economy: Rajnath Singh
Senior BJP leader and Defence Minister Rajnath Singh on Monday hailed the Union Budget as one for ‘Aatmanirbhar Bharat’, and asserted that this will strengthen the economy.
BJP general secretary Bhupender Yadav said the budget will provide a major boost to India’s infrastructure, agriculture and healthcare.
Party spokesperson Shahnawaz Hussain praised the budget’s emphasis on affordable housing for all, and said it is sensitive to the needs of diverse sections of society.
Party leader Jyotiraditya Scindia said Finance Minister Nirmala Sitharaman has presented a well laid-out plan to get the economy back on track.
“A forward-looking budget. It will make good on the government’s USD 5 trillion economy promise. Multiple pluses:increased govt spending in major sectors like infrastructure, agriculture and healthcare; safety net expanded for the vulnerable; & opportunities for greater private investments,” he tweeted.
(With inputs from Business Bureau)