TABLE of CONTENTS

PART-A

Page No.
 Introduction 1

 Health and Wellbeing 5

 Physical and Financial Capital and Infrastructure 7

 Inclusive Development for Aspirational India 19

 Reinvigorating Human Capital 22

 Innovation and R&D 23

 Minimum Government, Maximum Governance 24

 Fiscal Position 25

PART B
Direct Tax Proposals 28
 Relief to Senior Citizens
 Reduction in Time for Income Tax Proceedings
 Setting up the Dispute Resolution Committee
 Faceless ITAT
 Relaxation to NRI
 Exemption from Audit
 Relief for Dividend
 Attracting foreign investment into infrastructure sector
 Affordable Housing/Rental Housing
 Tax incentives to IFSC
 Pre-filling of Returns
 Relief to Small Trusts
 Labour Welfare

Indirect Tax Proposals 33

 GST
 Custom Duty Rationalization
 Electronic and Mobile Phone Industry
 Iron and Steel
 Textile
 Chemicals
 (ii)

 Gold and Silver

 Renewable Energy
 Capital Equipment
 MSME Products
 Agriculture Products
Annexures
Annexures to Part A of the Speech 37

 Health and Wellbeing – Expenditure

 Flagship Projects: Roads and Highways
 Highlights of Disinvestment/Strategic Disinvestment Policy
 MSP Purchases of Agricultural Commodities
 Initiatives on Education as part of NEP
 Statement of Extra Budgetary Resources
(Govt. fully serviced bonds, NSSF loan and other resources)

Annexures to Part B of the Speech 45

Direct Tax
Indirect Tax
 Budget 2021-2022

Speech of
NirmalaSitharaman
Minister of Finance

February 1, 2021

Hon’ble Speaker,

I present theBudget for the year 2021-2022.

Introduction

1. Honourable Speaker, the preparation of this Budget was undertaken

in circumstances like never before. We knew of calamities that have
affected a country or a region within a country, but what we have endured
with COVID-19 through 2020 is sui generis.

2. When I presented the Budget 2020-21, we could not have imagined

that the global economy, already in throes of a slowdown, would be pushed
into an unprecedented contraction.

3. We could not have also imagined then that our people as those in
other countries would have to endure the loss of near and dear ones and
suffer hardships brought about due to a health crisis.

4. The risk of not having a lockdown was far too high. Within 48 hours
of declaring a three-week-long complete lockdown, the Prime Minister
announced the PradhanMantriGaribKalyanYojana, valued at `2.76 lakh
crores– this provided, free food grain to 800 million people, free cooking
gas for 80 million families for months, and cash directly to over 400 million
farmers, women, elderly, the poor and the needy.
5. Even as a large section of citizens stayed home, milk, vegetable, and
fruit-suppliers, health and sanitary workers, truck drivers, railways and
public transport workers, bank employees, electricity workers, our
annadatas, police, firemen, and the armed forces, all had to go about their
work as normal, but with the additional anxiety of the virus hanging over
them. We recognise this, and I think I speak on behalf of everybody in this
august House, when I express my heartfelt gratitude to these men and
women, for how they were able to carry out their work and duty, to provide
for the nation’s basics, over those crucial months.

6. Speaker Sir, for public good, Honourable Members of Parliament

and Members of Legislative Assemblies too offered their salaries.

7. In May 2020, the government announced the AtmaNirbhar Bharat

package (ANB 1.0).To sustain the recovery, further into the year, we also
rolled out two more AtmaNirbhar Bharat packages (ANB 2.0 and ANB 3.0).
Total financial impact of all AtmaNirbhar Bharat packages including
measures taken by RBI was estimated to about `27.1 lakh crores which
amounts to more than 13% of GDP.

8. As a government, we kept a watch on the situation and were

proactive in our responses. The government, led by the Prime Minister,
stretched its resources to deliver for most vulnerable sections of our society
– the poorest of the poor, the Dalits, Tribals, the elderly, the migrant
workers, and our children. The PMGKY, the three ANB packages, and
announcements made later were like five mini-budgets in themselves.

9. The AtmaNirbhar Packages accelerated our pace of structural

reforms. Redefinition of MSMEs, Commercialisation of the Mineral Sector,
Agriculture and Labour Reforms, Privatisation of Public Sector Undertakings,
One Nation One Ration Card, and Production Linked Incentive Schemes are
some of the notable reforms carried out during this period. Faceless
Income Tax Assessment, DBT and Financial Inclusion are the others.

10. Today, India has two vaccines available, and has begun medically
safeguarding not only her own citizens against COVID-19, but also those of
100 or more countries. It is added comfort to know that two or more
vaccines are also expected soon.

11. Honourable Prime Minister launched the vaccination drive by

crediting and thanking our scientists. We are ever grateful for the strength
and rigour of their efforts.
12. Having said that, we are all reminded time and again that our fight
against COVID-19 continues into 2021.
13. Now, just as it had happened after the two World Wars, there are
signs that the political, economic, and strategic relations in the post COVID
world are changing. This moment in history is the dawn of a new era – one
in which India is well-poised to truly be the land of promise and hope.

''Faith is the bird that feels the light and sings when the dawn is still
dark''.
-Rabindranath Tagore
(Fireflies – A Collection of Aphorisms)

14. In this spirit, I can’t help but recall the joy that we, as a cricket-loving
nation, felt after Team India’s recent spectacular success in Australia. It has
reminded us of all the qualities that we as a people, particularly our youth,
epitomise of having abundant promise and the unsuppressed thirst to
perform and succeed.

15. Today, data shows that India now has one of the lowest death rate
of 112per million population and one of the lowest active cases of about
130 per million. This has laid the foundation to the revival we are seeing
now in the economy.

16. This Budget will be the first of this new decade. This Budget will also
be a digital Budget and that has happened with all your support.
17. So far, only three times has a Budget followed a contraction in the
economy. All such contractions were as a result of situations typical to
India. This time, the contraction in our economy is due to a global
pandemic, just like in several other countries.
18. Having said that, I want to confidently state that our Government is
fully prepared to support and facilitate the economy’s reset. This Budget
provides every opportunity for our economy to raise and capture the pace
that it needs for sustainable growth.

19. 2021 is the year of many important milestones for our history. I
mention a few of these: It is the 75 th year of Independence; 60 years of
Goa’s accession to India; 50 years of the 1971 India-Pakistan War; it will be
the year of the 8th Census of Independent India; it will also be India’s turn
at the BRICS Presidency; the year for our Chandrayaan-3 Mission; and the
HaridwarMahaKumbh.
20. Honourable Speaker, before I commence Part A of the Budget, I
want to take a moment to acknowledge how isolating and distancing
seemed like insurmountable challenges for a country like ours that has
people coming together in times of crises. It hurt us in many ways. I bow my
head in respect to every citizen, for the endurance shown in facing what
was an undeniably a tough year for all our physical and mental well-being.

PART A

21. In Part A, I wish to lay a vision for AtmaNirbhar Bharat.

22. AtmaNirbharta is not a new idea. Ancient India was largely self-
reliant, and equally, a business epicentre of the world.

23. AtmaNirbhar Bharat is an expression of 130 crores Indians who have

full confidence in their capabilities and skills.

24. We are already part of International groupings such as the G20 and
BRICS. The Coalition for Disaster Resilient Infrastructure and the
International Solar alliance are realities today due to India’s efforts.

25. The proposals in Part A will further strengthen the sankalp of Nation
First, Doubling Farmer’s Income, Strong Infrastructure, Healthy India, Good
Governance, Opportunities for Youth, Education for All, Women
Empowerment, and Inclusive Development, among others.

26. Additionally, also on the path to fast-implementation are the 13

promises we had made in the Budget of 2015-16 which were to materialise
during the AmrutMahotsav of 2022, on the 75 th year of our Independence.
They too resonate with this vision of AtmaNirbharta.

27. The Budget proposals for 2021-2022 rest on 6 pillars.

i. Health and Wellbeing
ii. Physical & Financial Capital, and Infrastructure
iii. Inclusive Development for Aspirational India
iv. Reinvigorating Human Capital
v. Innovation and R&D
vi. Minimum Government and Maximum Governance

1. Health and Wellbeing

28. Even at the outset, I would like to say that the investment on Health
Infrastructure in this Budget has increased substantially. Progressively, as
institutions absorb more, we shall commit more.

29. Taking a holistic approach to Health, we focus on strengthening

three areas: Preventive, Curative, and Wellbeing.

Health Systems

30. A new centrally sponsored scheme, PM AtmaNirbharSwasth Bharat

Yojana, will be launched with an outlay ofabout ` 64,180crores over 6 years.
This will develop capacities of primary, secondary, and tertiary care Health
Systems, strengthen existing national institutions, and create new
institutions, to cater to detection and cure of new and emerging diseases.
This will be in addition to the National Health Mission. The main
interventions under the scheme are:

a. Support for 17,788 rural and 11,024 urban Health and Wellness
Centers
b. Setting up integrated public health labs in all districts and 3382 block
public health units in 11 states;
c. Establishing critical care hospital blocks in 602 districts and 12
central institutions;
d. Strengthening of the National Centre for Disease Control (NCDC), its
5 regional branches and 20 metropolitan health surveillance units;
e. Expansion of the Integrated Health Information Portal to all
States/UTs to connect all public health labs;
f. Operationalisation of 17 new Public Health Units and strengthening
of 33 existing Public Health Units at Points of Entry, that is at 32
Airports, 11 Seaports and 7 land crossings;
g. Setting up of 15 Health Emergency Operation Centers and 2 mobile
hospitals; and
h. Setting up of a national institution for One Health, a Regional
Research Platform for WHO South East Asia Region, 9 Bio-Safety
Level III laboratories and 4 regional National Institutes for Virology.

Nutrition

31. To strengthen nutritional content, delivery, outreach, and outcome,

we will merge the Supplementary Nutrition Programme and the
PoshanAbhiyan and launch the Mission Poshan 2.0. We shall adopt an
intensified strategy to improve nutritional outcomes across 112 Aspirational
Districts.

Universal Coverage of Water Supply

32. The World Health Organisation has repeatedly stressed the

importance of clean water, sanitation, and clean environment, as a pre
requisite to achieving universal health.

33. The JalJeevan Mission (Urban), will be launched. It aims at universal

water supply in all 4,378 Urban Local Bodies with 2.86 crores household tap
connections, as well as liquid waste management in 500 AMRUT cities. It
will be implemented over 5 years, with an outlay of `2,87,000crores.

Swachch Bharat, Swasth Bharat

34. For further swachhta of urban India, we intend to focus on complete

faecal sludge management and waste water treatment, source segregation
of garbage, reduction in single-use plastic, reduction in air pollution by
effectively managing waste from construction-and-demolition activities and
bio-remediation of all legacy dump sites. The Urban Swachh Bharat Mission
2.0 will be implemented with a total financial allocation of `1,41,678crores
over a period of 5 years from 2021-2026.

Clean Air

35. To tackle the burgeoning problem ofair pollution, I propose to

provide an amount of `2,217 crores for 42 urban centres with a million-plus
population in this budget.

Scrapping Policy

36. We are separately announcing a voluntary vehicle scrapping policy,

to phase out old and unfit vehicles. This will help in encouraging fuel-
efficient, environment friendly vehicles, thereby reducing vehicular
pollution and oil import bill. Vehicles would undergo fitness tests in
automated fitness centres after 20 years in case of personal vehicles, and
after 15 years in case of commercial vehicles. Details of the scheme will be
separately shared by the Ministry.

Vaccines
37. The Pneumococcal Vaccine, a Made in India product, is presently
limited to only 5 states will be rolled out across the country. This will avert
more than 50,000 child deaths annually.

38. I have provided `35,000 crores for Covid-19 vaccine in BE 2021-22. I

am committed to provide further funds if required.

39. The Budget outlay for Health and Wellbeing is `2,23,846croresin BE

2021-22 as against this year’s BE of `94,452crores an increase of 137
percentage. The details of the same are at Annexure I of the Speech.

2. Physical and Financial Capital and Infrastructure

AtmaNirbhar Bharat – Production Linked Incentive scheme (PLI)

40. For a USD 5 trillion economy, our manufacturing sector has to grow
in double digits on a sustained basis. Our manufacturing companies need to
become an integral part of global supply chains, possess core competence
and cutting-edge technology. To achieve all of the above, PLI schemes to
create manufacturing global champions for an AtmaNirbhar Bharat have
been announced for 13 sectors. For this, the government has committed
nearly `1.97 lakh crores,over 5 years starting FY 2021-22. This initiative will
help bring scale and size in key sectors, create and nurture global
champions and provide jobs to our youth.

Textiles

41. To enable the textile industry to become globally competitive,

attract large investments and boost employment generation, a scheme of
Mega Investment Textiles Parks (MITRA) will be launched in addition to the
PLI scheme. This will create world class infrastructure with plug and play
facilities to enable create global champions in exports. 7 Textile Parks will
be established over 3 years.

Infrastructure

42. The National Infrastructure Pipeline (NIP) which I announced in

December 2019 is the first-of-its-kind, whole-of-government exercise ever
undertaken by Government of India. The NIP was launched with 6835
projects; the project pipeline has now expanded to 7,400 projects. Around
217 projects worth `1.10 lakh crores under some key infrastructure
Ministries have been completed.

43. The NIP is a specific target which this government is committed to

achieving over the coming years. It will require a major increase in funding
both from the government and the financial sector. In this Budget, I
propose to take concrete steps to do this, in three ways:

44. Firstly, by creating the institutional structures; secondly, by a big

thrust on monetizing assets, and thirdly by enhancing the share of capital
expenditure in central and state budgets.

Infrastructure financing - Development Financial Institution (DFI)

45. Infrastructure needs long term debt financing. A professionally

managed Development Financial Institution is necessary to act as a
provider, enabler and catalyst for infrastructure financing. Accordingly, I
shall introduce a Bill to set up a DFI. I have provided a sum of `20,000 crores
to capitalise this institution. The ambition is to have a lending portfolio of at
least `5 lakh crores for this DFI in three years time.

46. Debt Financing of InVITs and 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 infrastructure and real estate sectors.

Asset Monetisation

47. Monetizing operating public infrastructure assets is a very important

financing option for new infrastructure construction. A “National
Monetization Pipeline” of potential brownfield infrastructure assets will be
launched. An Asset Monetization dashboard will also be created for
tracking the progress and to provide visibility to investors. Some important
measures in the direction of monetisation are:

a. National Highways Authority of India and PGCIL each have

sponsored one InvIT that will attract international and domestic
 institutional investors. Five operational roads with an estimated
enterprise value of ` 5,000 crores are being transferred to the NHAI
InvIT. Similarily, transmission assets of a value of `7,000 crores will
be transferred to the PGCIL InvIT.
b. Railways will monetise Dedicated Freight Corridor assets for
operations and maintenance, after commissioning.
c. The next lot of Airports will be monetised for operations and
management concession.
d. Other core infrastructure assets that will be rolled out under the
Asset Monetization Programme are: (i) NHAI Operational Toll Roads
(ii) Transmission Assets of PGCIL (iii) Oil and Gas Pipelines of GAIL,
IOCL and HPCL (iv) AAI Airports in Tier II and III cities, (v) Other
Railway Infrastructure Assets (vi) Warehousing Assets of CPSEs such
as Central Warehousing Corporation and NAFED among others and
(vii) Sports Stadiums.

Sharp Increase in Capital Budget

48. In the BE 2020-21, we had provided `4.12 lakh crores for Capital
Expenditure. It was our effort that in spite of resource crunch we should
spend more on capital and we are likely to end the year at around `4.39lakh
crores which I have provided in the RE 2020-21. For 2021-22, I propose a
sharp increase in capital expenditure and thus have provided `5.54 lakh
crores which is 34.5% more than the BE of 2020-21. Of this, I have kept a
sum of more than `44,000 crores in the Budget head of the Department of
Economic Affairs to be provided for projects/programmes/departments
that show good progress on Capital Expenditure and are in need of further
funds. Over and above this expenditure, we would also be providing more
than `2 lakh crores to States and Autonomous Bodies for their Capital
Expenditure.

49. We will also work out specific mechanisms to nudge States to spend
more of their budget on creation of infrastructure.

Roads and Highways Infrastructure

50. More than 13,000 km length of roads, at a cost of `3.3 lakh crores,
has already been awarded under the `5.35 lakh croresBharatmalaPariyojana
project of which 3,800 kms have been constructed. By March 2022, we
would be awarding another 8,500 kms and complete an additional 11,000
kms of national highway corridors.

51. To further augment road infrastructure, more economic corridors

are also being planned. Some are:

a. 3,500 km of National Highway works in the state of Tamil Nadu at an

investment of `1.03 lakh crores. These include Madurai-Kollam
corridor, Chittoor-Thatchur corridor. Construction will start next
year.
b. 1,100 km of National Highway works in the State of Kerala at an
investment of `65,000 crores including 600 km section of Mumbai-
Kanyakumari corridor in Kerala.
c. 675 km of highway works in the state of West Bengal at a cost of
`25,000 crores including upgradation of existing road-Kolkata –
Siliguri.
d. National Highway works of around `19,000 crores are currently in
progress in the State of Assam. Further works of more than `34,000
crores covering more than 1300 kms of National Highways will be
undertaken in the State in the coming three years.

52. Some of the flagship corridors and other important projects that
would see considerable activity in 2021-22 are in Annexure-II.

53. I am also providing an enhanced outlay of `1,18,101 crores for

Ministry of Road Transport and Highways, of which `1,08,230 crores is for
capital, the highest ever.

Railway Infrastructure

54. Indian Railways have prepared a National Rail Plan for India – 2030.
The Plan is to create a ‘future ready’ Railway system by 2030.

55. Bringing down the logistic costs for our industry is at the core of our
strategy to enable ‘Make in India’. It is expected that Western Dedicated
Freight Corridor (DFC) and Eastern DFC will be commissioned by June 2022.
The following additional initiatives are proposed:
 a. The Sonnagar – Gomoh Section (263.7 km) of Eastern DFC will be
taken up in PPP mode in 2021-22. Gomoh-Dankuni section of 274.3
km will also be taken up in short succession.
b. We will undertake future dedicated freight corridor projects namely
East Coast corridor from Kharagpur to Vijayawada, East-West
Corridor from Bhusaval to Kharagpur to Dankuni and North-South
corridor from Itarsi to Vijayawada. Detailed Project Reports will be
undertaken in the first phase.
c. Broad Gauge Route Kilometers (RKM) electrified is expected to reach
46,000 RKM i.e., 72% by end of 2021 from 41,548 RKM on 1st Oct
2020. 100% electrification of Broad-Gauge routes will be completed
by December, 2023.

56. For Passenger convenience and safety the following measures are
proposed:
a. We will introduce the aesthetically designed Vista Dome LHB coach
on tourist routes to give a better travel experience to passengers.
b. The safety measures undertaken in the past few years have borne
results. To further strengthen this effort, high density network and
highly utilized network routes of Indian railways will be provided
with an indigenously developed automatic train protection system
that eliminates train collision due to human error.
c. I am providing a record sum of `1,10,055crores, for Railways of
which `1,07,100 croresis for capital expenditure.

Urban Infrastructure
57. We will work towards raising the share of public transport in urban
areas through expansion of metro rail network and augmentation of city bus
service. A new scheme will be launched at a cost of `18,000 crores to
support augmentation of public bus transport services. The scheme will
facilitate deployment of innovative PPP models to enable private sector
players to finance, acquire, operate and maintain over 20,000 buses. The
scheme will boost the automobile sector, provide fillip to economic growth,
create employment opportunities for our youth and enhance ease of
mobility for urban residents.

58. A total of 702 km of conventional metro is operational and another

1,016 km of metro and RRTS is under construction in 27 cities. Two new
technologies i.e., ‘MetroLite’ and ‘MetroNeo’ will be deployed to provide
metro rail systems at much lesser cost with same experience, convenience
and safety in Tier-2 cities and peripheral areas of Tier-1 cities.

59. Central counterpart funding will be provided to:

a. Kochi Metro Railway Phase-II of 11.5 km at a cost of `1957.05 crores.
b. Chennai Metro Railway Phase-II of 118.9 km at a cost of `63,246
crores.
c. Bengaluru Metro Railway Project Phase 2A and 2B of 58.19 km at a
cost of `14,788 crores.
d. Nagpur Metro Rail Project Phase-II and Nashik Metro at a cost of
`5,976 crores and `2,092 crores respectively.

Power Infrastructure

60. The past 6 years have seen a number of reforms and achievements
in the power sector. We have added 139 Giga Watts of installed capacity,
connected an additional 2.8 crores households and added 1.41 lakh circuit
km of transmission lines.

61. The distribution companies across the country are monopolies,

either government or private. There is a need to provide choice to
consumers by promoting competition. A framework will be put in place to
give consumers alternatives to choose from among more than one
Distribution Company.

62. The viability of Distribution Companies is a serious concern. A

revamped reforms-based result-linked power distribution sector scheme
will be launched with an outlay of `3,05,984crores over 5 years. The
scheme will provide assistance to DISCOMS for Infrastructure creation
including pre-paid smart metering and feeder separation, upgradation of
systems, etc., tied to financial improvements.

63. Prime Minister, while speaking at the 3rd Re-inVest Conference in

November 2020, had announced plans to launch a comprehensive National
Hydrogen Energy Mission. It is now proposed to launch aHydrogen Energy
Mission in2021-22 for generating hydrogen from green power sources.

Ports, Shipping, Waterways

64. Major Ports will be moving from managing their operational services
on their own to a model where a private partner will manage it for them.
For the purpose, 7 projects worth more than `2,000 crores will be offered
by the Major Ports on Public Private Partnership mode in FY21-22.

65. A scheme to promote flagging of merchant ships in Indiawill be

launched by providing subsidy support to Indian shipping companies in
global tenders floated by Ministries and CPSEs. An amount of `1624 crores
will be provided over 5 years. This initiative will enable greater training and
employment opportunities for Indian seafarers besides enhancing Indian
companies share in global shipping.

66. India has enacted Recycling of Ships Act, 2019 and acceded to the
Hong Kong International Convention. Around 90 ship recycling yards at
Alang in Gujarat have already achieved HKC-compliant certificates. Efforts
will be made to bring more ships to India from Europe and Japan. Recycling
capacity of around 4.5 Million Light Displacement Tonne (LDT) will be
doubled by 2024. This is expected to generate an additional 1.5 lakh jobs for
our youth.

Petroleum & Natural Gas

67. Our government has kept fuel supplies running across the country
without interruption during the COVID-19 lockdown period. Taking note of
the crucial nature of this sector in people’s lives, the following key initiatives
are being announced:

a. Ujjwala Scheme which has benefited 8 crores households will be

extended to cover 1 crores more beneficiaries.
b. We will add 100 more districts in next 3 years to the City Gas
Distribution network.
c. A gas pipeline project will be taken up in Union Territory of Jammu &
Kashmir.
d. An independent Gas Transport System Operator will be set up for
facilitation and coordination of booking of common carrier capacity
in all-natural gas pipelines on a non-discriminatory open access
basis.
Financial Capital
68. I propose to consolidate the provisions of SEBI Act, 1992,
Depositories Act, 1996, Securities Contracts (Regulation) Act, 1956 and
Government Securities Act, 2007 into a rationalized single Securities
Markets Code.

69. The Government would support the development of a world class

Fin-Tech hub at the GIFT-IFSC.

70. To instill confidence amongst the participants in the Corporate Bond

Market during times of stress and to generally enhance secondary market
liquidity, it is proposed to create a permanent institutional framework. The
proposed body would purchase investment grade debt securities both in
stressed and normal times and help in the development of the Bond
market.

71. In the budget of 2018-19, Government had announced its intent to

establish a system of regulated gold exchanges in the country. For the
purpose, SEBI will be notified as the regulator and Warehousing
Development and Regulatory Authority will be strengthened to set up a
commodity market eco system arrangement including vaulting, assaying,
logistics etc in addition to warehousing.

72. Towards investor protection, I propose to introduce an investor

charter as a right of all financial investors across all financial products.

73. To give a further boost to the non-conventional energy sector, I

propose to provide additional capital infusion of `1,000 crores to Solar
Energy Corporation of India and `1,500 crores to Indian Renewable Energy
Development Agency.

Increasing FDI in Insurance Sector

74. I propose to amend the Insurance Act, 1938 to increase the

permissible FDI limit from 49% to 74% in Insurance Companies and allow
foreign ownership and control with safeguards. Under the new structure,
the majority of Directors on the Board and key management persons would
be resident Indians, with at least 50% of Directors being Independent
Directors, and specified percentage of profits being retained as general
reserve.

Stressed Asset Resolution by setting up a New Structure

75. The high level of provisioning by public sector banks of their stressed
assets calls for measures to clean up the bank books. An Asset
Reconstruction Company Limited and Asset Management Company would
be set up to consolidate and take over the existing stressed debt and then
manage and dispose of the assets to Alternate Investment Funds and other
potential investors for eventual value realization.

Recapitalization of PSBs

76. To further consolidate the financial capacity of PSBs, further

recapitalization of `20,000 crores is proposed in 2021-22.

Deposit Insurance

77. Last year, Government had approved an increase in the Deposit

Insurance cover from `1 lakh to `5 lakhs for bank customers. I shall be
moving amendments to the DICGC Act, 1961 in this Session itself to
streamline the provisions, so that if a bank is temporarily unable to fulfil its
obligations, the depositors of such a bank can get easy and time-bound
access to their deposits to the extent of the deposit insurance cover. This
would help depositors of banks that are currently under stress.

78. To improve credit discipline while continuing to protect the interest

of small borrowers, for NBFCs with minimum asset size of `100 crores, the
minimum loan size eligible for debt recovery under the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest
(SARFAESI) Act, 2002 is proposed to be reduced from the existing level of
`50 lakhs to `20 lakhs.

Company Matters

79. The decriminalizing of the procedural and technical compoundable

offences under the Companies Act, 2013, is now complete. I now propose to
next take up decriminalization of the Limited Liability Partnership (LLP) Act,
2008.
80. Sir, I propose to revise the definition under the Companies Act, 2013
for Small Companies by increasing their thresholds for Paid up capital from
“not exceeding `50 Lakh” to “not exceeding `2 Crore” and turnover from
“not exceeding `2 Crore” to “not exceeding `20 Crore”. This will benefit
more than two lakh companies in easing their compliance requirements.

81. As a further measure which directly benefits Start-ups and

Innovators, I propose to incentivize the incorporation of One Person
Companies (OPCs) by allowing OPCs to grow without any restrictions on
paid up capital and turnover, allowing their conversion into any other type
of company at any time, reducing the residency limit for an Indian citizen to
set up an OPC from 182 days to 120 days and also allow Non Resident
Indians (NRIs) to incorporate OPCs in India.

82. To ensure faster resolution of cases, NCLT framework will be

strengthened, e-Courts system shall be implemented and alternate
methods of debt resolution and special framework for MSMEs shall be
introduced.

83. During the coming fiscal 2021-22, we will be launching data

analytics, artificial intelligence, machine learning driven MCA21 Version 3.0.
This Version 3.0 will have additional modules for e-scrutiny, e-Adjudication,
e-Consultation and Compliance Management.

Disinvestment and Strategic Sale

84. In spite of COVID-19, we have kept working towards strategic

disinvestment. A number of transactions namely BPCL, Air India, Shipping
Corporation of India, Container Corporation of India, IDBI Bank, BEML,
Pawan Hans, NeelachalIspat Nigam limited among others would be
completed in 2021-22. Other than IDBI Bank, we propose to take up the
privatization of two Public Sector Banks and one General Insurance
company in the year 2021-22. This would require legislative amendments
and I propose to introduce the amendments in this Session itself.

85. In 2021-22 we would also bring the IPO of LIC for which I am
bringing the requisite amendments in this Session itself.

86. In the AtmaNirbhar Package, I had announced that we will come out
with a policy of strategic disinvestment of public sector enterprises. I am
happy to inform the House that the Government has approved the said
policy. The policy provides a clear roadmap for disinvestment in all non-
strategic and strategic sectors. We have kept four areas that are strategic
where bare minimum CPSEs will be maintained and rest privatized. In the
remaining sectors all CPSEs will be privatized. The main highlights of the
policy are mentioned at Annexure-III.

87. To fast forward the disinvestment policy, I am asking NITI to work

out on the next list of Central Public Sector companies that would be taken
up for strategic disinvestment.

88. To similarly incentivise States to take to disinvestment of their Public

Sector Companies, we will work out an incentive package of Central Funds
for States.

89. Idle assets will not contribute to AtmaNirbhar Bharat. The non-core
assets largely consist of surplus land with government
Ministries/Departments and Public Sector Enterprises. Monetizing of land
can either be by way of direct sale or concession or by similar means. This
requires special abilities and for this purpose, I propose to use a Special
Purpose Vehicle in the form of a company that would carry out this activity.

90. In order to ensure timely completion of closure of sick or loss

making CPSEs, we will introduce a revised mechanism that will ensure
timely closure of such units.

91. I have estimated ` 1,75,000crores as receipts from disinvestment in

BE 2021-22.

Government Financial Reforms

92. Under the Treasury Single Account (TSA) System autonomous bodies
directly draw funds from the Government’s account at the time of actual
expenditure, saving interest costs. We will extend the TSA System for
universal application from 2021-22.

93. On the recommendation of the Fifteenth Finance Commission, we

have undertaken a detailed exercise to rationalise and bring down the
number of Centrally Sponsored Schemes. This will enable consolidation of
outlays for better impact.

94. The Government is committed to the development of Multi-State

Cooperatives and will provide all support to them. To further streamline the
‘Ease of Doing Business’ for Cooperatives, I propose to set up a separate
Administrative Structure for them.

3. Inclusive Development for Aspirational India

95. Honourable Speaker Sir, under this pillar, I will cover Agriculture and
Allied sectors, farmers’ welfare and rural India, migrant workers and labour,
and financial inclusion.

Agriculture

96. Our Government is committed to the welfare of farmers. The MSP

regime has undergone a sea change to assure price that is at least 1.5 times
the cost of production across all commodities. The procurement has also
continued to increase at a steady pace. This has resulted in increase in
payment to farmers substantially.

97. In case of wheat, the total amount paid to farmers in 2013-2014 was
`33,874 crores. In 2019-2020 it was `62,802 crores, and even better, in
2020-2021, this amount, paid to farmers, was `75,060 crores. The number
of wheat growing farmers that were benefitted increased in 2020-21 to
43.36 lakhs as compared to 35.57 lakhs in 2019-20.

98. For paddy, the amount paid in 2013-14 was `63,928 crores. In 2019-
2020 this increased `1,41,930crores. Even better, in 2020-2021, this is
further estimated to increase to `172,752 crores. The number of farmers
benefitted increased from 1.24 crores in 2019-20 to 1.54 crores in 2020-21.

99. In the same vein, in case of pulses, the amount paid in 2013-2014
was `236 crores. In 2019-20 it increased `8,285 crores. Now, in 2020-2021,
it is at `10,530 crores, a more than 40 times increase from 2013-14.

100. The receipts to cotton farmers have seen a stupendous increase

from `90 crores in 2013-14 to `25,974 crores (as on 27 th January 2021). The
details are in Annexure IV.

101. Early this year, Honourable Prime Minister had launched SWAMITVA
Scheme. Under this, a record of rights is being given to property owners in
villages. Up till now, about 1.80 lakh property-owners in 1,241 villages have
been provided cards. I now propose during FY21-22 to extend this to cover
all states/UTs.
102. To provide adequate credit to our farmers, I have enhanced the
agricultural credit target to `16.5 lakh crores in FY22. We will focus on
ensuring increased credit flows to animal husbandry, dairy, and fisheries.

103. We are enhancing the allocation to the Rural Infrastructure

Development Fund from `30,000 crores to `40,000 crores.

104. The Micro Irrigation Fund, with a corpus of `5,000 croreshas been
created under NABARD, I propose to double it by augmenting it by another
`5,000 crores.

105. To boost value addition in agriculture and allied products and their
exports, the scope of ‘Operation Green Scheme’ that is presently applicable
to tomatoes, onions, and potatoes, will be enlarged to include 22 perishable
products.

106. Around 1.68 crores farmers are registered and ` 1.14 lakh crores of
trade value has been carried out through e-NAMs. Keeping in view the
transparency and competitiveness that e-NAM has brought into the
agricultural market, 1,000 more mandis will be integrated with e-NAM.

107. The Agriculture Infrastructure Fund would be made available to

APMCs for augmenting their infrastructure facilities.

Fisheries

108. I am proposing substantial investments in the development of

modern fishing harbours and fish landing centres. To start with, 5 major
fishing harbours – Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat –
will be developed as hubs of economic activity. We will also develop inland
fishing harbours and fish-landing centres along the banks of rivers and
waterways.

109. Seaweed farming is an emerging sector with potential to transform

the lives of coastal communities.It will provide large scale employment and
additional incomes. To promote seaweed cultivation, I propose a
Multipurpose Seaweed Park to be established in Tamil Nadu.

Migrant Workers and Labourers

110. We have launched the One Nation One Ration Card scheme through
which beneficiaries can claim their rations anywhere in the country.
Migrant workers in particular benefit from this scheme – those staying away
from their families can partially claim their ration where they are stationed,
while their family, in their native places, can claim the rest. I am happy to
inform you that One Nation One Ration Card plan is under implementation
by 32 states and UTs, reaching about 69 crores beneficiaries – that’s a total
of 86% beneficiaries covered. The remaining 4 states and UTs will be
integrated in the next few months.

111. To further extend our efforts towards the unorganised labour force
migrant workers particularly, I propose to launch a portal that will collect
relevant information on gig, building, and construction-workers among
others. This will help formulate Health, Housing, Skill, Insurance, Credit, and
food schemes for migrant workers.

112. We will conclude a process that began 20 years ago, with the
implementation of the 4 labour codes. For the first time globally, 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. Women will be allowed to work in
all categories and also in the night-shifts with adequate protection. At the
same time, compliance burden on employers will be reduced with single
registration and licensing, and online returns.

Financial Inclusion

113. To further facilitate credit flow under the scheme of Stand Up India
for SCs, STs, and women, I propose to reduce the margin money
requirement from 25% to 15%, and to also include loans for activities allied
to agriculture.

114. We have taken a number of steps to support the MSME sector. In

this Budget, I have provided `15,700 crores to this sector, more than double
of this year’s BE.

4. Reinvigorating Human Capital

115. The National Education Policy (NEP) announced recently has had
good reception.
School Education

116. More than 15,000 schools will be qualitatively strengthened to

include all components of the National Education Policy. They shall emerge
as exemplar schools in their regions, handholding and mentoring other
schools to achieve the ideals of the Policy.

117. 100 new Sainik Schools will be set up in partnership with

NGOs/private schools/states.

Higher Education

118. In Budget 2019-20, I had mentioned about the setting-up of Higher

Education Commission of India. We would be introducing Legislation this
year to implement the same. It will be an umbrella body having 4 separate
vehicles for standard-setting, accreditation, regulation, and funding.

119. Many of our cities have various research institutions, universities,

and colleges supported by the Government of India. Hyderabad for
example, has about 40 such major institutions. In 9 such cities, we will
create formal umbrella structures so that these institutions can have better
synergy, while also retaining their internal autonomy. A Glue Grant will be
set aside for this purpose.

120. For accessible higher education in Ladakh, I propose to set up a

Central University in Leh.

121. The other important projects to be taken up as part of NEP are listed
at Annexure V.

Scheduled Castes and Scheduled Tribes Welfare

122. We have set ourselves a target of establishing 750 Eklavya model

residential schools in our tribal areas. I propose to increase the unit cost of
each such school from `20 crores to `38 crores, and for hilly and difficult
areas, to `48 crores. This would help in creating robust infrastructure
facilities for our tribal students.

123. We have revamped the Post Matric Scholarship Scheme, for the
welfare of Scheduled Castes. I have also enhanced the Central Assistance in
this regard. We are allotting ` 35,219 crores for 6 years till 2025-2026, to
benefit 4 crores SC students.

Skilling

124. In 2016, we had launched the National Apprenticeship Promotion

Scheme. The Government proposes to amend the Apprenticeship Act with a
view to further enhancing apprenticeship opportunities for our youth. We
will realign the existing scheme of National Apprenticeship Training Scheme
(NATS) for providing post-education apprenticeship, training of graduates
and diploma holders in Engineering. Over `3,000 crores will be provided for
this.

125. An initiative is underway, in partnership with the United Arab

Emirates (UAE), to benchmark skill qualifications, assessment, and
certification, accompanied by the deployment of certified workforce. We
also have a collaborative Training Inter Training Programme (TITP) between
India and Japan to facilitate transfer of Japanese industrial and vocational
skills, technique, and knowledge. We will take forward this initiative with
many more countries.

5. Innovation and R&D

126. In my Budget Speech of July 2019, I had announced the National

Research Foundation. We have now worked out the modalities and the NRF
outlay will be of `50,000 crores, over 5 years. It will ensure that the overall
research ecosystem of the country is strengthened with focus on identified
national-priority thrust areas.

127. There has been a manifold increase in digital payments in the recent
past. To give a further boost to digital transactions, I earmark `1,500 crores
for a proposed scheme that will provide financial incentive to promote
digital modes of payment.

128. We will undertake a new initiative – National Language Translation

Mission (NTLM). This will enable the wealth of governance-and-policy
related knowledge on the Internet being made available in major Indian
languages.
129. The New Space India Limited (NSIL), a PSU under the Department of
Space will execute the PSLV-CS51 launch, carrying the Amazonia Satellite
from Brazil, along with a few smaller Indian satellites.

130. As part of the Gaganyaan mission activities, four Indian astronauts

are being trained on Generic Space Flight aspects, in Russia. The first
unmanned launch is slated for December 2021.

131. Our oceans are a storehouse of living and non-living resources. To

better understand this realm, we will launch a Deep Ocean Mission with a
budget outlay of more than `4,000 crores, over five years. This Mission will
cover deep ocean survey exploration and projects for the conservation of
deep sea bio-diversity.

6. Minimum Government, Maximum Governance

132. Speaker Sir, I now come to the last of the six pillars. This will outline
plans for reforms in one of our core principles of minimum government,
maximum governance.

133. We have taken a number of steps to bring reforms in Tribunals in

the last few years for speedy delivery of justice. Continuing with the
reforms process, Inow propose to take further measures to rationalize the
functioning of Tribunals.

134. We have introduced the National Commission for Allied Healthcare

Professionals Bill in Parliament, with a view to ensure transparent and
efficient regulation of the 56 allied healthcare professions. Additionally, to
bring about transparency, efficiency and governance reforms in the nursing
profession, The National Nursing and Midwifery Commission Bill will be
introduced by the government for passing.

135. To have ease of doing business for those who deal with Government
or CPSEs, and carry out contracts, I propose to set up a Conciliation
Mechanism and mandate its use for quick resolution of contractual
disputes. This will instil confidence in private investors and contractors.

136. The forthcoming Census could be the first digital census in the
history of India. For this monumental and milestone-marking task, I have
allocated `3,768 crores in the year 2021-2022.
137. Goa is celebrating the diamond jubilee year of the state’s liberation
from Portuguese rule. From the GoI’s side, I propose a grant of `300 crores
to the Government of Goa for the celebrations.

138. I propose to provide `1,000 crores for the welfare of Tea workers
especially women and their children in Assam and West Bengal. A special
scheme will be devised for the same.

Fiscal Position

139. In these last few paragraphs of Part A of my speech, I draw the

attention of this august House to the fact that, at the beginning of the
current Financial Year, the pandemic’s impact on the economy resulted in a
weak revenue inflow. This was combined with high expenditure to provide
essential relief to vulnerable sections of the society especially the poor,
women, SCs and STs.

140. Unlike many other countries, we opted for a series of medium-sized

packages during the pandemic so that we could calibrate and target our
response according to an evolving situation. Once the health situation
stabilised, and the lockdown was being slowly lifted, we switched to
ramping up Government spending so as to revive domestic demand. As a
result, against an original BE expenditure of `30.42 lakh crores for 2020-
2021, our RE estimates are `34.50 lakh crores. We have maintained the
quality of expenditure. The capital expenditure, estimated in RE is `4.39 lakh
crores in 2020-2021 as against `4.12 lakh crores in BE 2020-21.

141. The fiscal deficit in RE 2020-21 is pegged at 9.5% of GDP. We have

funded this through Government borrowings, multilateral borrowings, Small
Saving Funds and short term borrowings. We would need another ` 80,000
crores for which we would be approaching the markets in these 2 months.
To ensure that the economy is given the required push, our BE estimates for
expenditure in 2021-2022, are `34.83lakh crores. This includes `5.54lakh
crores as capital expenditure, an increase of 34.5% over the BE figure of
2020-2021. The fiscal deficit in BE 2021-2022 is estimated to be 6.8% of
GDP. The gross borrowing from the market for the next year would be
around `12 lakh crores. We plan to continue with our path of fiscal
consolidation, and intend to reach a fiscal deficit level below 4.5% of GDP by
2025-2026 with a fairly steady decline over the period. We hope to achieve
the consolidation by first, increasing the buoyancy of tax revenue through
improved compliance, and secondly, by increased receipts from
monetisation of assets, including Public Sector Enterprises and land. The
Contingency Fund of India is being proposed to be augmented from `500
crores to `30,000 crores through Finance Bill.

142. In accordance with the views of the 15 th Finance Commission, we are

allowing a normal ceiling of net borrowing for the states at 4% of GSDP for
the year 2021-2022. A portion of this ceiling will be earmarked to be spent
on incremental capital expenditure. Additional borrowing ceiling of 0.5% of
GSDP will also be provided subject to conditions. States will be expected to
reach a fiscal deficit of 3% of GSDP by 2023-24, as recommended by the 15 th
Finance Commission.

143. In the July 2019-2020 Budget, I introduced the Statement 27 on

Extra Budgetary Resources – it disclosed the borrowings of Government
agencies that went towards funding GoI schemes, and whose repayment
burden was on the Government. In my 2020-2021 Budget, I enhanced the
scope and coverage of the Statement, by including the loans provided by
Government to the FCI. Taking a step further in this direction, I propose to
discontinue the NSSF Loan to FCI for Food Subsidy and accordingly Budget
Provisions have been made in RE 2020-21 and BE 2021-22. The Extra
Budgetary Resources details are at Annexure VI.
144. We know that the FRBM Act mandates fiscal deficit of 3% of GDP to
be achieved by 31st March 2020-2021. The effect of this year’s unforeseen
and unprecedented circumstances has necessitated the submission of a
deviation statement under Sections 4 (5) and 7 (3) (b) of the FRBM Act
which I am laying on the Table of the House as part of the FRBM
Documents.

145. Towards achieving Central Government fiscal deficit along the broad
path that I have already indicated; I will be introducing an amendment to
the FRBM Act.

146. On 9th December 2020, the 15th Finance Commission submitted its
final report, covering the period 2021-2026 to the Rashtrapatiji. The
Government has laid the Commission’s report, along with the explanatory
memorandum in the Parliament retaining the vertical shares of the states at
41%. We recognise our commitment to fiscal federalism and propose
therefore to adhere to this recommendation. Jammu and Kashmir in the
14th Finance Commission was entitled to get devolution being a State. Now,
the funds to the UTs of Jammu and Kashmir and Ladakh would be provided
by the Centre.I have also provided, on the Commission’s recommendation,
`1,18,452crores as Revenue Deficit Grant to 17 states in 2021-2022, as
against `74,340 crores to 14 States in 2020-2021.

I would, now, move to Part B of my speech.

 PART B

147. Honourable Speaker, the world is facing a serious challenge of the

pandemic and its aftershock. In these trying times, when many economies
are struggling to revive, our people and our industry have exhibited
remarkable resilience.

148. As I mentioned already, post-pandemic, a new world order seems to

be emerging, one in which Asia is poised to occupy a prominent position
and India will have a leading role therein. In this scenario, our tax system
has to be transparent, efficient, and should promote investments and
employment in our country. At the same time it should put minimum
burden on our tax payers.

இயற்றலும் ஈட்டலுங் காத்தலும் காத்த

வகுத்தலும் வல்ல தரசு.

- திருக்குறள்385

A King/Ruler is the one who creates and acquires wealth,

protects and distributes it for common good.

- Thirukkural 385

Direct Tax Proposals

149. Keeping this in mind, our Government introduced a series of reforms
in the Direct tax system for the benefit of our taxpayers and economy. Few
months prior to the pandemic, in order to attract investments we slashed
our Corporate tax rate to make it among the lowest in the world. The
Dividend Distribution Tax too was abolished. The burden of taxation on
small taxpayers was eased by increasing rebates. In 2020, the return filers
saw a dramatic increase to 6.48crorefrom 3.31 crorein 2014.

150. In the Direct Tax administration, we had recently introduced the

Faceless Assessment and Faceless Appeal. I now seek to take further steps
to simplify the tax administration, ease compliance, and reduce litigation.

Relief to Senior Citizens

151. I begin my direct tax proposals by offering my pranaam to our senior
citizens. Many of them, despite having foregone several basic necessities of
their own, have strived to build our nation.

152. Now in the 75th year of Independence of our country, when we

continue our endeavour with renewed vigour, we shall reduce compliance
burden on our senior citizens who are 75 years of age and above. For senior
citizens who only have pension and interest income, I propose exemption
from filing their income tax returns. The paying bank will deduct the
necessary tax on their income.

Reduction in Time for Income Tax Proceedings

153. Honourable Speaker, presently, an assessment can be re-opened up

to 6 years and in serious tax fraud cases for up to 10 years. As a result,
taxpayers have to remain under uncertainty for a long time.

154. I therefore propose to reduce this time-limit for re-opening of

assessment to 3 years from the present 6 years. In serious tax evasion cases
too, only where there is evidence of concealment of income of `50 lakh or
more in a year, can the assessment be re-opened up to 10 years. Even this
reopening can be done only after the approval of the Principal Chief
Commissioner, the highest level of the Income Tax Department.

Setting up the Dispute Resolution Committee

155. Honourable Speaker, it has been the resolve of this Government to

reduce litigation, which mars the present taxation system.

156. The Government came out with the Direct Tax Vivad Se Vishwas
Scheme to give taxpayers an opportunity to settle long pending disputes
and be relieved of further strain on their time and resources. The response
from the taxpayers has been the best ever as over 1 lakh ten thousand
taxpayers have already opted to settle tax disputes of over `85,000
croresunder this Scheme.

157. To further reduce litigation for small taxpayers, I propose to

constitute a Dispute Resolution Committeefor them, which will be faceless
to ensure efficiency, transparency and accountability. Anyone with a taxable
income up to `50 lakh and disputed income up to `10 lakh shall be eligible
to approach the Committee.
Faceless ITAT

158. For ease of compliance and to reduce discretion, we are committed

to make the taxation processes faceless. The Government has already
introduced faceless assessment and appeal this year.

159. The next level of income tax appeal is the Income Tax Appellate
Tribunal. I now propose to make this Tribunal faceless. We shall establish a
National Faceless Income Tax Appellate Tribunal Centre. All communication
between the Tribunal and the appellant shall be electronic. Where personal
hearing is needed, it shall be done through video-conferencing.

Relaxation to NRI

160. When Non-Resident Indians return to India, they have issues with
respect to their accrued incomes in their foreign retirement accounts. This
is usually due to a mismatch in taxation periods. They also face difficulties
in getting credit for Indian taxes in foreign jurisdictions. I propose to notify
rules for removing their hardship of double taxation.

Exemption from Audit

161. Currently, if your turnover exceeds `1 crore, you have to get your
accounts audited. In the February 2020 Budget, I had increased the limit for
tax audit to `5 crore for those who carry out 95% of their transactions
digitally. To further incentivise digital transactions and reduce compliance
burden, I propose to increase this limit for tax audit for such persons from
`5 crore to `10 crore.
Relief for Dividend

162. In the previous Budget, I had abolished the Dividend Distribution Tax
(DDT) in order to incentivise investment. Dividend was made taxable in the
hands of shareholders. Now, in order to provide ease of compliance, I
propose to make dividend payment to REIT/ InvIT exempt from TDS.
Further, as the amount of dividend income cannot be estimated correctly
by the shareholders for paying advance tax, I propose to provide that
advance tax liability on dividend income shall arise only after the
declaration/payment of dividend. Also, for Foreign Portfolio Investors, I
propose to enable deduction of tax on dividend income at lower treaty rate.
Attracting foreign investment into infrastructure sector
163. In the last budget, for attracting foreign investment in the
infrastructure sector, we had granted 100% tax exemption, subject to
certain conditions, to foreign Sovereign Wealth Funds and Pension Funds,
on their income from investment in Indian infrastructure. We have noticed
that few of such Funds are facing difficulties in meeting some of these
conditions. In order to ensure that a large number of Funds invest in India, I
propose to relax some of these conditions relating to prohibition on private
funding, restriction on commercial activities, and direct investment in
infrastructure.

164. In order to allow funding of infrastructure by issue of Zero Coupon

Bonds, I propose to make notified Infrastructure Debt Funds eligible to raise
funds by issuing tax efficient Zero Coupon Bonds.

Affordable Housing/Rental Housing

165. This Government sees ‘Housing for All’ and affordable housing as
priority areas. In the July 2019 Budget, I provided an additional deduction of
interest, amounting to `1.5 lakh, for loan taken to purchase an affordable
house. I propose to extend the eligibility of this deduction by one more
year, to 31st March 2022. The additional deduction of `1.5 lakh shall
therefore be available for loans taken up till 31 st March 2022, for the
purchase of an affordable house.

166. Further, to keep up the supply of affordable houses, I propose that

affordable housing projects can avail a tax holiday for one more year – till
31st March, 2022.

167. We are committed to promote supply of Affordable Rental Housing

for migrant workers. For this, I propose to allow tax exemption for notified
Affordable Rental Housing Projects.

Tax incentives to IFSC

168. As I mentioned in Part A of this speech, the Government is

committed to make the International Financial Services Centre (IFSC) in GIFT
City a global financial hub. In addition to the tax incentives already
provided, I propose to include, among others, tax holiday for capital gains
for aircraft leasing companies, tax exemption for aircraft lease rentals paid
to foreign lessors; tax incentive for relocating foreign funds in the IFSC; and
to allow tax exemption to the investment division of foreign banks located
in IFSC.
Pre-filling of Returns

169. Honourable Speaker, in order to ease compliance for the taxpayer,

details of salary income, tax payments, TDS, etc. already come pre-filled in
income tax returns. To further ease filing of returns, details of capital gains
from listed securities, dividend income, and interest from banks, post office,
etc. will also be pre-filled.

Relief to Small Trusts

170. We hope to reduce compliance burden on small charitable trusts

running educational institutions and hospitals. So far, there is a blanket
exemption to such entities, whose annual receipt does not exceed
`1 crore. I now propose to increase this amount to `5 crore.

Labour Welfare

171. We have noticed that some employers deduct the contribution of

employees towards Provident funds, superannuation funds, and other
social security funds but do not deposit these contributions within the
specified time. For the employees, this means a loss of interest or income.
In cases where an employer later becomes financially unviable, non-deposit
results in a permanent loss for the employees.
172. In order to ensure that employees’ contributions are deposited on
time, I reiterate that the late deposit of employee’s contribution by the
employer will not be allowed as deduction to the employer.

Incentives for Start-ups

173. In order to incentivise start-ups in the country, I propose to extend
the eligibility for claiming tax holiday for start-ups by one more year - till
31st March, 2022. Further, in order to incentivise funding of the start-ups, I
propose to extend the capital gains exemption for investment in start-ups
by one more year - till 31st March, 2022.
Indirect Tax Proposals

GST

174. Before I come to my Indirect Tax proposals, I would like to appraise

the House on GST. The GST is now four years old, and we have taken several
measures to further simplify it. Some of the measures include:
 i. nil return through SMS,
ii. quarterly return and monthly payment for small taxpayers,
iii. electronic invoice system,
iv. validated input tax statement,
v. pre-filled editable GST return, and
vi. staggering of returns filing.
The capacity of GSTN system has also been enhanced. We have also
deployed deep analytics and Artificial Intelligence to identify tax evaders
and fake billers and launched special drives against them.

175. The results speak for themselves. We have made record collections
in the last few months.

176. The GST Council has painstakingly thrashed out thorny issues. As
Chairperson of the Council, I want to assure the House that we shall take
every possible measure to smoothen the GST further, and remove
anomalies such as the inverted duty structure.

Custom Duty Rationalization

177. Our Custom Duty Policy should have the twin objective of promoting
domestic manufacturing and helping India get onto global value chain and
export better. The thrust now has to be on easy access to raw materials and
exports of value added products.

178. Towards this, last year, we started overhauling the Customs Duty
structure, eliminating 80 outdated exemptions. I also thank everyone who
responded overwhelmingly to a crowd-sourcing call for suggestions on this
revamp. I now propose to review more than 400 old exemptions this year.
We will conduct this through extensive consultations, and from 1 st October
2021, we will put in place a revised customs duty structure, free of
distortions. I also propose that any new customs duty exemption
henceforth will have validity up to the 31st March following two years from
the date of its issue.

Electronic and Mobile Phone Industry

179. Domestic electronic manufacturing has grown rapidly. We are now

exporting items like mobiles and chargers. For greater domestic value
addition, we are withdrawing a few exemptions on parts of chargers and
sub-parts of mobiles. Further, some parts of mobiles will move from ‘nil’
rate to a moderate 2.5%.
Iron and Steel

180. MSMEs and other user industries have been severely hit by a recent
sharp rise in iron and steel prices. Therefore, we are reducing Customs duty
uniformly to 7.5% on semis, flat, and long products of non-alloy, alloy, and
stainless steels. To provide relief to metal re-cyclers, mostly MSMEs, I am
exempting duty on steel scrap for a period up to 31 st March, 2022. Further,
I am also revoking ADD and CVD on certain steel products. Also, to provide
relief to copper recyclers, I am reducing duty on copper scrap from 5% to
2.5%.

Textile

181. The Textiles Sector generates employment and contributes

significantly to the economy. There is a need to rationalize duties on raw
material inputs to manmade textiles. We are now bringing nylon chain on
par with polyester and other man-made fibers. We are uniformly reducing
the BCD rates on caprolactam, nylon chips and nylon fiber& yarn to 5%. This
will help the textile industry, MSMEs, and exports, too.

Chemicals

182. We have calibrated customs duty rates on chemicals to encourage

domestic value addition and to remove inversions. Apart from other items,
we are reducing customs duty on Naptha to 2.5% to correct inversion.
Gold and Silver

183. Gold and silver presently attract a basic customs duty of 12.5%.
Since the duty was raised from 10% in July 2019, prices of precious metals
have risen sharply. To bring it closer to previous levels, we are rationalizing
custom duty on gold and silver.

Renewable Energy

184. In Part A, we have already acknowledged that solar energy has huge
promise for India. To build up domestic capacity, we will notify a phased
manufacturing plan for solar cells and solar panels. At present, to encourage
domestic production, we are raising duty on solar invertors from 5% to 20%,
and on solar lanterns from 5% to 15%.
Capital Equipment and Auto Parts

185. There is immense potential in manufacturing heavy capital

equipment domestically. We will comprehensively review the rate structure
in due course. However, we are revising duty rates on certain items
immediately. We propose to withdraw exemptions on tunnel boring
machine. It will attract a customs duty of 7.5%; and its parts a duty of 2.5%.
We are raising customs duty on certain auto parts to 15% to bring them on
par with general rate on auto parts.
MSME Products

186. We are proposing certain changes to benefit MSMEs. We are

increasing duty from 10% to 15% on steel screws and plastic builder wares.
On prawn feed we increase it from 5% to 15%. We are rationalizing
exemption on import of duty-free items as an incentive to exporters of
garments, leather, and handicraft items. Almost all these items are made
domestically by our MSMEs. We are withdrawing exemption on imports of
certain kind of leathers as they are domestically produced in good quantity
and quality, mostly by MSMEs. We are also raising customs duty on finished
synthetic gem stones to encourage their domestic processing.

Agriculture Products

187. To benefit farmers, we are raising customs duty on cotton from nil
to 10% and on raw silk and silk yarn from 10% to 15%. We are also
withdrawing end-use based concession on denatured ethyl alcohol.
Currently, rates are being uniformly calibrated to 15% on items like maize
bran, rice bran oil cake, and animal feed additives.

188. There is an immediate need to improve agricultural infrastructure

so that we produce more, while also conserving and processing agricultural
output efficiently. This will ensure enhanced remuneration for our farmers.
To earmark resources for this purpose, I propose an Agriculture
Infrastructure and Development Cess (AIDC) on a small number of items.
However, while applying this cess, we have taken care not to put additional
burden on consumers on most items.

Rationalization of Procedures and Easing of Compliance

189. For their judicious application, we propose certain changes in the

provisions relating to ADD and CVD levies. To complete Customs
investigations, we are prescribing definite timelines. In 2020, we rolled out
the Turant Customs initiative, which brought in Faceless, Paperless, and
Contactless Customs measures. With effect from September 2020, we have
implemented a new procedure for administration of Rules of Origin. This
has helped in putting a check on misuse of FTAs.

190. The specific details of direct and indirect tax changes proposed are
listed in the Annexure to my speech.

191. Mr. Speaker Sir, with these words I commend the Budget to this
august House.
 Annex to Part A of Budget Speech

ANNEXURE-I

Health and Wellbeing – Expenditure

(In `crores)

Ministry/Department Actuals BE BE
2019-20 2020-21 2021-22
D/o Health & Family Welfare 62,397 65,012 71,269

D/o Health Research 1,934 2,100 2,663

M/o AYUSH 1,784 2,122 2,970

CoVID related Special Provisions

Vaccination 35,000

D/o Drinking Water & Sanitation 18,264 21,518 60,030

Nutrition 1,880 3,700 2,700

FC Grants for Water and Sanitation 36,022

FC Grants for Health 13,192

TOTAL 86,259 94,452 2,23,846

 ANNEXURE-II

Flagship Projects: Roads and Highways

Major Expressways/Corridors

 Delhi-Mumbai Expressway: Remaining 260 km will be awarded

before 31.3.2021.

 Bengaluru – Chennai Expressway: 278 km will be initiated in the

current financial year. Construction will begin in 2021-22

 Delhi-Dehradun economic corridor: 210 km corridor will be

initiated in the current financial year. Construction will begin in
2021-22

 Kanpur-Lucknow Expressway: 63 km expressway providing an

alternate route to NH 27 will be initiated in 2021-22.

 Chennai – Salem corridor: 277 km expressway will be awarded

and construction would start in 2021-22.

 Raipur-Vishakhapatnam: 464 km passing through Chhattisgarh,

Odisha and North Andhra Pradesh will be awarded in the current
year. Construction will start in 2021-22.

 Amritsar-Jamnagar: Construction will commence in 2021-22

 Delhi –Katra: Construction will commence in 2021-22

Advanced Traffic management system with speed radars, variable message

signboards, GPS enabled recovery vans will be installed in all new four and
six lane highways.
 ANNEXURE-III

Highlights of Disinvestment/Strategic Disinvestment Policy

Objectives

a) Minimising presence of Central Government Public Sector Enterprises

including financial institutions and creating new investment space for
private sector
b) Post disinvestment, economic growth of Central Public Sector
Enterprises (CPSEs)/ financial institutions will be through infusion of
private capital, technology and best management practices. Will
contribute to economic growth and new jobs.
c) Disinvestment proceeds to finance various social sector and
developmental programmes of the government.

Policy features

a) Policy covers existing CPSEs, Public Sector Banks and Public Sector
Insurance Companies.
b) Various sectors will be classified as strategic and non-strategic
sectors.
c) The strategic sectors classified are:
i) Atomic energy, Space and Defence
ii) Transport and Telecommunications
iii) Power, Petroleum, Coal and other minerals
iv) Banking, Insurance and financial services
d) In strategic sectors, there will be bare minimum presence of the
public sector enterprises. The remaining CPSEs in the strategic
sector will be privatised or merged or subsidiarized with other
CPSEs or closed.
e) In non-strategic sectors, CPSEs will be privatised, otherwise shall be
closed.
 ANNEXURE-IV

MSP Purchases of Agricultural Commodities

Year Wheat Paddy Cotton Jute Pulses Oilseed

s and
Copra

MSP Number MSP Number MSP Number MSP Number MSP MSP
Value of Value of Value of Value of Value Value
farmers farmers famers farmers (`crore)
(`crore) benefite (`crore) benefited (`crore) benefite (`crore) benefite (` lakh)
d (lakhs) d d
(lakhs) (lakhs) (lakhs)

2010-11 24764.3 NA 52573.04 NA - - - - 1.75 149.03

2011-12 33152 NA 58084.48 NA 14 0.02 47.7 0.46 0.005 1.52

2012-13 49020.1 NA 65039.28 NA 4797 7.3 140.19 1.15 407.22 394.06

8

2013-14 33874.2 NA 63927.65 NA 90 0.14 53.98. 0.5 235.86 1626.3

0 9

2014-15 39232.2 NA 66948.00 NA 18506 29.5 6.56 0.06 1128.93 45.52

0

2015-16 40727.6 NA 73981.90 73.08 1825 1.91 - - - 15.90

0

2016-17 35015.5 20.47 85802.73 76.85 - - 28.79 0.17 1039.39. 946.71

3

2017-18 50089.0 31.87 90397.86 72.31 898 0.88 172.16 1.22 8566.13 5072.7
0 3

2018-19 6204.33 38.77 116839.4 96.94 2976 2.38 66.79 0.26 20145.60 7091.1
7 1

2019-20 62802.8 35.57 141928.0 124.59 28500 21.5 56.24 0.55 8284.45 8305.0
8 8 6

2020-21 75059.6 43.36 172752* 154** 25974 18.26* 2.99 0.01 10530.20 3647.1
0 * * 1

* upto 27.01.21; **Estimated

value

NA= Not Available

 ANNEXURE-V

Initiatives on Education as part of NEP

 Standards will be developed for all school teachers in the form of

National Professional Standards for Teachers- NPST. This will enhance
the capabilities of teachers and will be followed by all 92 lakh teachers
of public and private school system in the country.
 Toys are both an expression of entertainment and learning. A unique
indigenous toy-based learning – pedagogy for all levels of school
education will be developed. This will transform classroom
transactions from mundane and rote learning to an engaging and
joyful experience.
 A National Digital Educational Architecture (NDEAR) will be set up
within the context of a Digital First Mindset where the Digital
Architecture will not only support teaching and learning activities but
also educational planning, governance and administrative activities of
the Centre and the States/ Union Territories. It will provide a diverse
education eco-system architecture for development of digital
infrastructure, a federated but inter operable system that will ensure
autonomy of all stakeholders, specially States and UTs.
 For children with hearing impairments, the Government will work on
standardization of Indian Sign language across the country, and
develop National and State Curriculum materials for use by them.
 There are a number of senior and retired teachers. They will be used
for individual mentoring of school teachers and educators through
constant online/offline support on subjects, themes and pedagogy.
 Students have so far been evaluated on uni-dimensional parameters.
There will be a complete shift from using assessments to not only
judge the cognitive levels of the learner but also using it as an
opportunity to identify the unique strengths and the potential of the
child. To this effect, a holistic progress card is envisaged to provide
students with valuable information on their strengths, areas of
interest, needed areas of focus and thereby helping them in making
optimal career choices.
 To enable increased access of resources, online modules covering the
entire gamut of adult education will be introduced.
 During the year, despite the COVID-19 pandemic, we have trained
more than 30 lakh elementary school teachers digitally, covering the
whole gamut of education. Taking this further, in 2021-22, we will
enable the training of 56 lakh school teachers through the National
 Initiative for School Heads and Teachers for Holistic Advancement
(NISTHA).
 For the past few years our Prime Minister has been engaging with
students every year before their Board Exams to help them overcome
anxiety and stress. In this direction, we will introduce CBSE Board
Exam reforms in a phased manner to be effective from the 2022-23
academic session. Exams will move away from rote-learning and
students shall be tested on their conceptual clarity, analytical skills and
application of knowledge to real life situations.
 To promote enhanced academic collaboration with foreign higher
educational institutions, it is proposed to put in place a regulatory
mechanism to permit dual degrees, joint degrees, twinning
arrangements and other such mechanisms.
 ANNEXURE VI
Statement of Extra Budgetary Resources (EBRs) (Govt. fully serviced bonds, NSSF loan and other
resources)
(In `crores)
Part-A – EBRs mobilised through issue of Govt. fully serviced bonds
Dema Name of the 2016- 2017- 2018-19 2019- 2020-21 2020- 2021-
nd Ministry/Department and 17 18 20 21 22
No. Name of the Scheme Actual Actual Actuals Actua BE RE BE
s s ls
24 Department of Higher
Education
Revitalising Infrastructure and --- --- --- --- 3000.00 ---
Systems in Education (RISE)
44 Department of Health &
Family Welfare
PradhanMantriSwasthyaSuraks --- --- --- --- 3000.00 ---
haYojana
59 Ministry of Housing & Urban
Affairs
PradhanMantriAwasYojana --- --- 20000.0 --- 10000.0 ---
(PMAY) - Urban 0 0
61 Department of Water
Resources, River
Development & Ganga
Rejuvenation
(i) Polavaram Irrigation Project --- --- 1400.00 1850.0 --- 2234.2
0 9
(ii)
PradhanMantriKrishiSinchaiYo 2187.0 3105.0 5493.40 1963.3 5000.00 4225.0
jana (Accelerated Irrigation 0 0 0 0
Benefits Programme & other
Projects)
62 Department of Drinking NIL
Water & Sanitation
Swachh Bharat Mission (Rural) --- --- 8698.20 3600.0 ---- ---
JalJeevan Mission/National --- --- --- 0 12000.0 ---
Rural Drinking Water --- 0
Programme
70 Ministry of New &
Renewable Energy
Grid Interactive Renewable 1640.0 --- --- --- --- ---
Power, Off-Grid/ Distributed & 0
Decentralized Renewable
Power
PradhanMantri- --- --- --- --- 1000.0 ---
KisanUrjaSanrakshanEvamUtt 0
hanMahabhiyan (PM-KUSUM)
77 Ministry of Ports, Shipping
and Waterways
Inland Waterways Authority of 340.00 660.00 --- ---- --- ---
India (IWAI) Projects
78 Ministry of Power
DeenDayalUpadhyaya Gram 5000.0 4000.0 13827.0 3782.0 5500.0 5000.0
JyotiYojana/SAUBHAGYA 0 0 0 0 0 0

(ii) Power System Development --- 5504.70 --- --- ---

Fund Projects
86 Department of Rural
Development
PradhanMantriAwasYojana --- 7330.00 10678.80 10811. 10000.0 20000.0
(PMAY) - Rural 00 0 0
Total 9167.0 15095. 65602.10 22006. 49500. 31459.29
0 00 30 00
 Part-B – Financial support extended through loans from NSSF
(In `crores)
Sl. Name of the 2016-17 2017-18 2018-19 2019-20 2020-21 2020-21 2021-22
No. Ministry/Department/
Name of the Entity Actuals Actuals Actuals Actuals BE RE BE

1 Department of Food & Public

Distribution
Food Corporation of India# 70000.00 65000.00 97000.00 110000.00 136600.00 84636.00 ---

2 Ministry of Housing & Urban

Affairs
Building Materials & Technology --- 8000.00 --- 15000.00 --- 10000.00
Promotion Council
3 Department of Fertilizers
Metals & Minerals Trading --- --- --- 1310.00 --- --- ---
Corporation
4 Support to other public agencies 30000.00
(to meet requirement for additional
resources, if any, under some
specific scheme/project)
Total 70000.00 73000.00 97000.00 126310.00 136600.00 94636.00 30000.00
Grand Total (A+B) 79167.00 88095.00162602.10 148316.13 186100.00 126095.29 30000.00

# NSSF loan amount outstanding with FCIas on 31.03.2020 was ` 2,54,600crore.

Notes :

(i) Air India Asset Holding Limited (AIAHL) under M/o Civil Aviation was permitted to raise
EBRs by issuing Govt. Fully Serviced Bonds of upto` 7,000 crore in FY 2019-20 to refinance AIs debt
transferred to AIAHL.

(ii) M/o Railways was permitted to meet fund requirement of upto`10,200 crore
(` 5,200 crore in FY 2018-19 &` 5,000 crore in FY 2019-20) through borrowings for financing its
National Projects. The repayment liability is being borne on General Revenues of Govt.

(iii) Capital Infusion in Public Sector Banks:An amount of `80,000 crore in

2017-18, `1,06,000crore in 2018-19 and ` 65,443 crore in 2019-20 was infused for recapitalisation of
Public Sector Banks (PSBs). For this purpose, a provision of ` 20,000 crore was made in 2020-21. In
the FY 2020-21 so far, an amount of ` 5,500 crore has been infused by Government as fresh capital in
PSBs through non-interest bearing special securities. GoI has also infused capital through issue of
bonds in 3 other banks namely IDBI (` 4,557 crore), EXIM Bank (` 5,050 crore) and IIFCL
(` 5,297.60 crore).

(iv) Statement of liability on annuity projects is given in Part-B of the Receipt Budget 2021-22.
Amount of unpaid annual liability at the end of financial year 2019-20 was `41,822.04 crore.
 Annex to Part B of Budget Speech

Direct Tax Proposals:

Sl. Proposals Proposed Amendments in brief

No.
1. Relief to Senior CitizensIn order to ease compliance burden on senior
citizen pensioners who are of 75 years of age
or above, it is proposed to exempt them from
the requirement of filing of income tax if the
full amount of tax payable has been deducted
by the paying bank. This exemption is
proposed to be made available to such senior
citizens who have only interest income apart
from the pension income.
2. Reduction in Time Limits In order to reduce compliance burden, the
time-limit for re-opening of assessment is
being reduced to 3 years from the current 6
years from the end of the relevant
assessment year. Re-opening up to 10 years
is proposed to be allowed only if there is
evidence of undisclosed income of ` 50 lakh or
more for a year. Further, it is proposed to
completely remove discretion in re-opening
and henceforth re-opening shall be made only
in cases flagged by system on the basis of data
analytics, objection of C&AG and in
search/survey cases.
Further, in order to bring certainty in income
tax proceedings at the earliest, it is also
proposed to reduce the time limits for general
assessment or processing of income tax
return by three months and also for filing of
returns.
3. Relief for Dividend In order to provide relief to taxpayers,
advance-tax liability on dividend income shall
arise only after the declaration/payment of
dividend. The dividend paid to Real Estate
Infrastructure Trusts or Infrastructure
Investment Trusts (REIT/InvIT) shall be
exempt from TDS. It is also proposed to clarify
that deduction of tax on incomes including
dividend income of Foreign Portfolio Investors
may be made at treaty rate. It is also
proposed to exempt dividend payment from
levy of Minimum Alternate Tax (MAT) for
foreign company if the applicable tax rate is
less than the rate of MAT.
4. Setting up of Dispute For reducing litigation and to give an impetus
 Resolution Committee to the dispute resolution for small taxpayers,
(DRC) a Dispute Resolution Committee is proposed
to be constituted. A taxpayer having taxable
income up to ` 50 lakh and disputed income
up to ` 10 lakh shall be eligible to approach
the Committee. For ensuring efficiency,
transparency and accountability, the
procedure of the Committee will be
conducted in a faceless manner.
Consequently, the Settlement Commission
shall be discontinued from 01.02.2021.
However, the pending cases shall be decided
by an Interim Board if opted by the applicant.
5. Faceless Income Tax In order to provide transparent tax appellate
Appellate Tribunal (ITAT) mechanism, it is proposed to the make the
Income Tax Appellate Tribunal faceless and
jurisdiction-less. A National Faceless Income-
tax Appellate Tribunal Centre shall be
established and all the communication
between the Tribunal and the appellant shall
be made electronically. Wherever personal
hearing is needed, it shall be done through
video-conferencing.
6. Tax Neutrality of In order to facilitate the transition of UCBs to
conversion of Urban SFBs, it is proposed to provide tax neutrality
Cooperative Bank (UCB) for the transition of UCBs to SFBs.Hence, the
into a Small Finance Bank UCB shall not be required to pay capital gains
(SFB) for the assets transferred to the SFBs.
7. Tax incentives for In order to incentivise purchase of affordable
Affordable Housing and house, It is proposed to extend the eligibility
Affordable Rental period for claim of additional deduction for
Housing Project interest of ` 1.5 lakh paid for loan taken for
purchase of an affordable house to 31st March
2022.
In order to increase the supply of affordable
house, it is proposed to extend eligibility
period for claiming tax holiday for affordable
housing project by one more year to 31 st
March, 2022.
In order to promote supply of Affordable
Rental Housing for the migrant workers, it is
also proposed to allow a new tax exemption
for the notified Affordable Rental Housing
Projects.
8. Tax benefit for Start-ups In order to incentivise setting-up of more
start-ups in the country, it is proposed to
extend the eligibility period to claim tax
holiday for the start-ups by one more year to
31st March, 2022.
 In order to incentivise investment in start-up,
it is proposed to extend the eligibility period
of claiming capital gains exemption for
investment made in the start-ups by one
more year to 31st Match, 2022.
9. Relaxation to NRI for In order to remove the genuine hardship
Income of Retirement faced by the NRIs in respect of their income
Benefit Account accrued on foreign retirement benefit account
due to mismatch in taxation, it is proposed to
notify rules for aligning the taxation of income
arising on foreign retirement benefit account.
10. Exemption from Audit To incentivise digital transactions and to
reduce the compliance burden of the person
who is carrying almost all of their transactions
digitally, it is proposed to increase the limit
for tax audit for persons who are undertaking
95% of their transactions digitally from
` 5 crore to ` 10 crore.
11. Relaxation of Condition In order to promote strategic disinvestment of
for carry forward of loss PSU, it is proposed to relax the condition
for Disinvestment regarding carry forward of loss for disinvested
PSU in amalgamation.
12. Relaxation of Condition In order to promote strategic disinvestment, it
for tax neutral Demerger is proposed to deem the transfer of assets by
for disinvestment the PSU to the resulting company as tax
neutral demerger.
13. Zero Coupon Bonds by In order to allow funding of infrastructure, it is
Infrastructure Debt Fund proposed to make Zero Coupon Bonds issued
(IDF) by notified IDF eligible for tax benefit.
14. Rationalisation of In order to rationalise taxation of ULIP, it is
taxation of Unit Linked proposed to allow tax exemption for maturity
Insurance Plan (ULIP) proceed of the ULIP having annual premium
up to ` 2.5 lakh. However, the amount
received on death shall continue to remain
exempt without any limit on the annual
premium. The cap of ` 2.5 lakh on the annual
premium of ULIP shall be applicable only for
the policies taken on or after 01.02.2021.
Further, in order to provide parity, the non-
exempt ULIP shall be provided same
concessional capital gains taxation regime as
available to the mutual fund.

15. Rationalisation of Tax- In order to rationalise tax exemption for the

free Income on Provident income earned by high income employees, it
Funds is proposed to restrict tax exemption for the
interest income earned on the employees’
contribution to various provident funds to the
annual contribution of `2.5 lakh. This
 restriction shall be applicable only for the
contribution made on or after 01.04.2021.
16. Taxability of Surplus In order to provide certainty, it is proposed to
amount received by rationalise the provisions relating to taxation
partners of the assets or amount received by partners
from the partnership firm in excess of their
capital contribution.
17. Clarification on In order to provide certainty, it is proposed to
Depreciation on Goodwill clarify that no depreciation on Goodwill shall
be allowed. However, the deduction for the
amount paid for acquiring Goodwill shall be
allowed on sale of Goodwill.
18. Clarification for the Slump In order to provide certainty, it is proposed to
Sale clarify that slump sale shall include all types of
transfer.

19. Fake Invoice/sham In order to protect the revenue, it is proposed

transaction to provide that the penalty proceedings
initiated for fake invoice/sham transactions of
more than ` 2 crore shall also be eligible for
provisional attachment of assets.
20. Exemption for Small In order to reduce compliance burden on the
Trusts small charitable trusts running educational
institutions and hospitals, it is proposed to
increase the limit on annual receipts for these
trusts from present ` 1 crore to ` 5 crore for
non-applicability of various compliances like
approval etc.
21 Carry Forward of loss by In order to provide certainty, it is proposed to
Charitable Organisations clarify that charitable trusts shall not be
permitted to claim carry forward of loss.
However, the loan repayment and
replenishment of corpus shall be allowed as
application.
22. Clarification for In order to provide certainty, it is being
Equalisation Levy expressly clarified that transaction taxable
under income-tax are not liable for
equalisation levy. Further, it is also proposed
to clarify regarding applicability of
equalisation levy on physical/offline supply of
goods and services.
23 Timely deposit of Delay in deposit of the contribution of
Employees’ contribution employees towards various welfare funds by
to labour welfare funds employers result in permanent loss of
by Due Date interest/income for the employees. In order
to ensure timely deposit of employees’
contribution to these funds by the employers,
it is proposed to reiterate that that the late
deposit of employees’ contribution by the
 employer shall never be allowed as deduction
to the employer.
24 Relaxation in conditions In order to incentivise more number of
for exemption to SWF/PF to invest in Indian Infrastructure, it is
Sovereign Wealth Fund & proposed to relax some of conditions for
Pension Fund (SWF/PF) availing 100% tax exemption introduced in the
last budget. The conditions which are
proposed to be relaxed include prohibition on
loans or borrowings, restriction on
commercial activities, direct investment in
entity owning infrastructure, etc.
25. Tax incentives for IFSC In order to promote IFSC, It is proposed to
provide more tax incentives which includes
tax holiday for capital gains incomes of
aircraft leasing company, tax exemptions for
aircraft lease rental paid to foreign lessor, tax
incentive for re-location of foreign funds in
IFSC and tax exemptions to investment
division of the foreign banks located in IFSC.
26 Non-filing of Return by In order to discourage the practice of not
Deductee/Collectee filing returns by the persons in whose case
substantial amount of tax has been
deducted/collected, it is proposed to provide
that a person in whose case TDS/TCS of
`50,000 or more has been made for the past
two years and who has not filed return of
income, the rate of TDS/TCS shall be at the
double of the specified rate or 5%, whichever
is higher. This provision shall not be applicable
for the transactions where full amount of tax
is required to be deducted e.g. salary income,
payment to non-resident, lottery, etc.
27 Levy of TDS on Purchase In order to widen the scope of TDS, it is
of Goods proposed to levy a TDS of 0.1% on a purchase
transaction exceeding ` 50 lakh in a year. In
order to reduce the compliance burden, it is
also proposed to provide that the
responsibility of deduction shall lie only on
the persons whose turnover exceeds ` 10
crore.
28 Substitution of Authority To ensure faster disposal of cases, it is
for Advance Rulings with proposed to replace the Authority for
Board for Advance Advance Rulings with a Board for Advance
Rulings Rulings. It is also proposed to provide appeal
against the order of such Board to the High
Court.

29. Alignment of Minimum In order to provide relief to the taxpayers in

Alternate Tax (MAT) for whose case MAT liability has arisen in the year
 Advanced Pricing of repatriation on account APA or secondary
Agreement (APA) and adjustment, it is proposed to provide relief by
secondary adjustment aligning the MAT provisions with the year of
taxability of such income.
30. Exemption for Leave In order to provide relief to employees, it is
Travel Concession (LTC) proposed to provide tax exemption to the
cash scheme amount given to an employee in lieu of
LTCsubject to incurring of specified
expenditure.
31 Increase in safe harbor In order to incentivise home buyers and real
limit for primary sale of estate developers, it is proposed to increase
residential units. safe harbour limit from 10% to 20% for the
specified primary sale of residential units.
32 Miscellaneous  It is proposed to make consequential
amendment in the provisions relating to
processing of returns for allowing certain
deductions and to provide clarification for
adjustment of income reported in Audit
Report.
 It is also proposed to enable issuance of
notice for calling for returns by the
prescribed authority.
 It is proposed to empower the Board to
relax the rule relating to defective return
for a class of taxpayers and to align due
dates of return for certain taxpayers,
 It is proposed to clarify that Limited Liability
Partnership shall not be eligible for
presumptive tax for professionals.
 It is proposed to define the term “liable to
tax” to provide certainty.
 ANNEXURE TO THE BUDGET SPEECH

A. LEGISLATIVE CHANGES IN CUSTOMS AND CENTRAL EXCISE:

1. Major Amendments in the Customs Act, 1962:

S. No. Amendment
A. Reduce dwell time and EoDB (Trade facilitation)
1. It is proposed to mandate filing of bills of entry before the end of day
preceding the day of arrival of goods (Section 46).
2. It is proposed to allow the specified amendments by
importer/exporter on self-amendment basis. Hitherto all
amendments were to be approved by the officer. (Section 149).
3. To encourage paperless processing, it is proposed to recognize the
use of common portal to serve notice, order etc and the portal to act
as a one-point digital interface for the trade to interact with the
Customs.
B. Efficiency and accountability
1 It is proposed to add a new provision in law to prescribe that all
conditional exemptions, unless otherwise specified or varied or
rescinded, given under Customs Act shall come to an end on 31 st
March falling immediately two years after the date of such grant or
variation. (Section 25 of the Customs Act).
2. It is proposed to introduce a new section 28BB to prescribe a definite
time-period of two years subject to certain exceptions, for
completion of investigations.
C. Improving tax compliance
1. A new provision is being proposed that any goods entered for
exportation making wrongful claim of remission or refund shall be
liable to confiscation [sub-section (ja) is being added to section 113
of the Customs Act].
2. A new provision is being inserted in the Customs Act (section 114AC)
to prescribe penalty in specific case where any person claims refund
of tax or duty discharge, using fraudulent invoices, on exports of
goods.
E. Disposal of seized gold
1. Section 110 of the Customs Act is proposed to be amended to revise
the procedure for pre-trial disposal of seized gold for expediting such
disposals

2. Amendments to the Customs Tariff Act, 1975:

 S. No. Amendment

A Amendment in First Schedule to the Customs Tariff Act, 1975

The first schedule to the Customs Tariff Act is being proposed to be

1. amended in accordance with HSN 2022 amendments. These changes
shall come into effect from 01.01.2022.
Besides certain new tariff lines are being created
B Amendment in the provisions relating to Anti-Dumping Duty (ADD),
Countervailing Duty (CVD), and Safeguard Measures
It is being proposed to make the following amendments in the provision
relating to ADD, CVD [ section 9, 9A of the Customs Tariff Act and
respective Rules] to provide for:
(i) imposition of duty from the date of initiation of anti-
circumvention investigation;
(ii) anti-absorption provisions;
(iii) imposition of these duties on review for period upto 5 years at
a time;
(iv) uniform provisions for imposition ADD/CVD on account of
1.
inputs (attracting ADD or CVD) used by EoUs and SEZs for manufacture
of goods that are cleared to Domestic Tariff Area;
(v) whenever any particular ADD or CVD is temporarily revoked,
such temporary revocation shall not exceed one year at a time;
(vi) final findings are to be issued in ADD/CVD, in investigation in
review proceedings, by the designated authority, at least three months
prior to expiry of the ADD under review (with effect from the 1 st Jul,
2021);
Amendment at S. No. (vi) is being made in respective Rules and rest of
the other changes are being made in the Customs Tariff Act.
The Safeguard Rules are being amended to provide for the manner and
2. procedure for causing investigation into the cases of imports in
increased quantity that cause injury to domestic industry for imposition
of Safeguard TRQs.

3. Amendments to the Central Excise Act, 1944:

1.  Addition of new tariff lines consequent to review of Harmonised
System of Nomenclature (HSN) by World Customs Organisation.
 A few minor changes in the schedule of clarificatory nature are
being made.

4. Amendments in Customs Rules:

The Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 [IGCR]
are being made so as a trade facilitation measure to allow:
 job-work on the materials (except precious metals) imported under IGCR
 clearance of imported capital goods imported under IGCR on payment of
customs duty on the depreciated value.
B. Customs duty rate changes
1. Changes in basic customs duty for creating level playing field for the
benefit of farmer, MSME and other domestic manufacturers [with effect from
02.02.2021]:

S.No Rate of Duty

Category Specific items
. From To
1. Agricultural Cotton 0 5%*
products Cotton waste Nil 10%
and fishery Raw Silk (not thrown) and silk yarn 10% 15%
sector /yarn spun from silk waste
Denatured ethyl alcohol (ethanol) for 2.5% 5%
manufacture of excisable goods
Prawn Feed 5% 15%
Fish feed in pellet form 5% 15%
Flours, meals and pellets of fish, 5% 15%
crustaceans, molluscs or other
aquatic invertebrates
Maize Bran Nil 15%
De-oiled rice bran cake Nil 15%
2. Chemicals Carbon Black 5% 7.5%
Bis-phenol A Nil 7.5%
Epichlorohydrin 2.5% 7.5%
3. Plastics Builder’s ware of plastic, not 10% 15%
elsewhere specified or included
Polycarbonates 5% 7.5%
4. Leather Wet blue chrome tanned leather, Nil 10%
crust leather, finished leather of all
kinds, including their splits and slides
5. Gems and Cut and Polished Cubic Zirconia 7.5% 15%
Jewellery Synthetic Cut and Polished Stones 7.5% 15%
6. Capital Tunnel Boring Machines Nil 7.5%
Goods and Parts and components for Nil 2.5%
Machinery manufacture of Tunnel Boring
Machines
7. Auto Sector Specified auto parts like ignition 7.5%/ 15%
wiring sets, safety glass, parts of 10%
signaling equipment, etc.
8. Metal Screws, Nuts, etc. 10% 15%
products
* Also, to attract Agriculture Infrastructure and development Cess at the rate of
5%

2. Changes in Customs duty to promote value addition in the Electronics

Sector [with effect from 2.2.2021, unless specified otherwise].

S.No. Description From To

1. Inputs, parts or sub-parts for manufacture of specified
parts of mobile phones, including:
(1) Printed Circuit Board Assembly (PCBA) 0 2.5%
 (2) Camera module 0 2.5%
(3) Connectors 0 2.5%
[To apply with effect from 01.04.2021]
2. Printed Circuit Board Assembly [PCBA] and Moulded 10% 15%
Plastic, for manufacture of charger or adapter
3. Inputs and parts [other than PCBA and moulded Nil 10%
plastic] of mobile charger
4. Inputs, Parts and Sub-parts [other than PCBA and Li- 0 2.5%
ion Cell] for manufacture of Lithium-ion battery and
battery pack [w.e.f. 01.04.2021]
5. Compressor of Refrigerator/Air Conditioner 12.5% 15%

6. Specified insulated wires and cables 7.5% 10%

7. Specific parts of transformer such as Bobbins, Nil Applicable

brackets, wires, etc. Rate
8. Inputs and parts of LED lights or fixtures including LED 5% 10%
Lamps
9. Solar Inverters 5% 20%

10. Solar lanterns or solar lamps 5% 15%

3. Changes in Customs duty raw materials and inputs used by Domestic

Manufacturers for reducing cost of inputs and correction of inverted duty
structure:

Inputs/Raw Rate of duty

S. No. materials Specific Items
From To
(for Sector)
1. Petrochemical
Naphtha 4% 2.5%
industry
2. Textile Caprolactam 7.5% 5%
industry Nylon Chips 7.5% 5%
Nylon fibre and yarn 7.5% 5%
3. Ferrous and Iron and Steel melting scrap, including 2.5% Nil
Non-Ferrous stainless steel scrap [upto 31.3.2022]
Metals Primary/Semi-finished products of non- 10% 7.5%
alloy steel
Flat products of non-alloy and alloy-steel 10%/ 7.5%
12.5%
Long products of non-alloy, stainless and 10% 7.5%
alloy steel
Raw materials used in manufacture of 2.5% Nil
CRGO Steel
Copper Scrap 5% 2.5%
6. Aviation Components or parts, including engines, 2.5% 0%
Sector for manufacture of aircrafts by Public
Sector Units of Ministry of Defence
7. Precious Gold and silver* 12.5% 7.5%*
 Metals Gold dore bar* 11.85% 6.9%*
Silver dore bar* 11% 6.1%*
Platinum, Pallidum, etc. 12.5% 10%
Gold/silver findings 20% 10%
Waste & Scrap of Precious Metals 12.5% 10%
Spent Catalyst or ash containing precious 11.85% 9.2%
metals
Precious Metal Coins 12.5% 10%
8 Animal
Feed additives or pre-mixes 20% 15%
Husbandry
* Also, to attract Agriculture Infrastructure and development Cess at the rate of 2.5%

4. BCD rates has been reduced on following items with imposition of Agriculture
Infrastructure and Development Cess on these so that overall consumer does not
bear additional burden on most of the items. The revised rate of basic customs
duty on such items shall be as follows:

Item Revised basic customs duty

rate*
Apple 15%
Alcoholic beverages falling in Chapter 22 50%
Crude edible oil (Palm, Soyabean, sunflower) 15%
Coal, lignite and peat 1%
Specified fertilizers (Urea, MoP, DAP) 0%
Ammonium nitrate 2.5%
Peas, kabulichana, Bengal gram, lentils 10%
* refer to part C for Agriculture Infrastructure and Development Cess rates on these items

5. Consequent to imposition of Agriculture Infrastructure and Development Cess

(AIDC) on petrol and diesel, the Basic excise duty (BED) and Special Additional
Excise Duty (SAED) rates have been reduced on them so that overall consumer
does not bear any additional burden. Consequently, unbranded petrol and diesel
will attract basic excise duty of Rs 1.4, and Rs 1.8 per litre respectively. The SAED
on unbranded petrol and diesel shall be Rs 11 and Rs 8 per litre respectively.
Similar changes have also been made for branded petrol and diesel. Refer to part C
for Agriculture Infrastructure and Development Cess rates on these items

6. Rationalization of exemptions

Category of
S. No. Specific items From To
goods
1. Minerals Natural borates and concentrates Nil/5% 2.5%
thereof
2. Chemicals Methyl DiphenylIsocyanate (MDI) Nil 7.5%
for the manufacture of spandex yarn
3. Items allowed to Certain duty-free imports of items Nil Applicable
be imported like motif, glue, veneer, polish, rate
duty free based hooks, rivets, button, Velcro,
 on export chaton, badges, beads, sewing
performance in thread etc, on the basis of export
handicrafts, made in the previous financial year,
garments and are allowed to handicraft, garments
leather and leather exporters.
An end date of 31.3.2021 is being
provided for these concessions.

7. Revocation / Temporary Revocation / Discontinuance of Anti-Dumping

Duty and Countervailing Duty

S. No. Specific Items

1. Anti-Dumping duty is being temporarily revoked for the period
commencing from 2.2.2021 till 30.09.2021, on imports of the
following-
(a) Straight Length Bars and Rods of alloy-steel, originating in or
exported from People’s Republic of China, imposed vide notification
No. 54/2018-Cus (ADD) dated 18.10.2018;
(b) High Speed Steel of Non-Cobalt Grade, originating in or
exported from Brazil, People’s Republic of China and Germany,
imposed vide notification No. 38/2019-Cus (ADD) dated 25.09.2019;
(c) Flat rolled product of steel, plated or coated with alloy of
Aluminium or Zinc, originating in or exported from People’s Republic
of China, Vietnam and Korea RP, imposed vide notification No.
16/2020-Cus (ADD) dated 23.06.2020.
2. Countervailing duty is being temporarily revoked for the period
commencing from 2.2.2021 till 30.09.2021, on imports of Certain Hot
Rolled and Cold Rolled Stainless Steel Flat Products, originating in or
exported from People’s Republic of China, imposed vide notification
No. 1/2017-Cus (CVD) dated 7.09.2017.
3. Provisional Countervailing duty is being revoked on imports Flat
Products of Stainless Steel, originating in or exported from Indonesia,
imposed vide notification No. 2/2020-Customs (CVD) dated 9.10.2020.

4. In Sunset Review, anti-dumping duty on Cold-Rolled Flat Products of

Stainless Steel of width 600 mm to 1250 mm and above 1250 mm of
non bonafide usage originating in or exported from People’s Republic
of China, Korea RP, European Union, South Africa, Taiwan, Thailand
and United States of America has been discontinued upon expiry of
the anti-dumping duty hitherto leviable vide notifications no. 61/2015-
Customs (ADD) dated 11th December, 2015 and 52/2017-Customs
(ADD) dated 24th October, 2017.

8. Other miscellaneous changes

 S. No. Category of Specific Items
Goods
1. Miscellaneous Exemption to temporary imports of costumes and
props by film-makers.
Exemption to all items of machinery, instruments,
appliances, components or auxiliary equipment for
setting up of solar power generation projects is being
rescinded [ Notif No. 1/2011-Cus]
2. Project Benefit is being extended to All High-Speed Railway
Imports projects
3. IT/Electronics Concessional rate of BCD on ink cartridges, ribbon
assembly, ribbon gear assembly, ribbon gear carriage,
for use in printers for computers is being withdrawn.
4. Toys Existing entries in exemption notification which
provide concessional BCD rate on various parts of
electronic toys, is being consolidated in a single entry
and a revised BCD rate of 15% is being prescribed for
the said new entry.
3. End use-based A number of cumbersome conditions in customs
exemptions to exemptions are now being replaced by the
be have requirement of observance of Import of Goods at
condition of Concessional rate (IGCR). This will simplify and
IGCR in lieu of standardized the compliance requirement for end
existing use-based exemptions.
miscellaneous
conditions.

C. Imposition of Agriculture Infrastructure and Development Cess on specified

goods [w.e.f. 2.2.2021]
An Agriculture Infrastructure and Development Cess has been proposed on
specified goods, as below:

(A) On customs side

Proposed cess
Items
(Customs)
Gold, Silver and dore bars 2.5%
Alcoholic beverages (falling under chapter 22) 100%
Crude palm oil 17.5%
Crude soyabean and sunflower oil 20%
Apples 35%
Coal, lignite and peat 1.5%
Specified fertilizers (Urea etc) 5%
Peas 40%
Kabuli Chana 30%
Bengal Gram/Chick peas 50%
 Lentil (Mosur) 20%
Cotton (not carded or combed) 5%

For basic customs duty rates on these items refer to part B. Overall there would be
no additional burden on the consumer on most of these items.

(B) On excise side:

An agriculture Infrastructure and Development Cess (AIDC) of ` 2.5 per litre has
been imposed on petrol and ` 4 per litre on diesel. For other duties and cess, as
revised, consequent to imposition of AIDC) on these items refer to part B. Overall
there would be no additional burden on the consumer.

E. Social Welfare Surcharge (SWS)

a. Notification No. 12/2018-Customs dated 2.2.2018 is being

rescinded to keep only one SWS rate of 10% for all goods.
1.
b. The SWS on Agriculture Infrastructure and Development Cess is
being exempted for Gold and Silver.

F. Miscellaneous changes in Central Excise:

1. Blended Fuel: Exemptions from cesses and surcharges on

M-15 Petrol and E-20 the lines of other blended fuels (like E-5 and
Petrol E-10) if these blended fuels are made of duty
paid inputs

G. Legislative Changes in the provisions of Central GST Act, 2017 (CGST Act)
and Integrated GST Act, 2017 (IGST Act):

Certain changes have been in the CGST Act and the IGST Act on the basis of
recommendations made by the GST Council. These changes will come into effect
from the date when the same will be notified, as far as possible, concurrently with
the corresponding amendments to the similar Acts passed by the States & Union
territories with legislature.

These includes measures for

(i) facilitating taxpayers, such as remove the mandatory requirement of

getting annual accounts audited and reconciliation statement, filing of the annual
return on self-certification basis and charging interest on net cash liability with
effect from the 1st July, 2017.
(ii) improving compliance, such as availment of input tax credit only when the
details have been furnished by the supplier in the statement of outward supplies,
validity of provisional attachment for a period, zero-rating on payment of IGST only
in specified cases and linking it to the receipt of foreign remittances
(iii) making certain other changes relating to seizure and confiscation, filing of
appeal only on payment of a sum equal to twenty-five per cent. of penalty
imposed

H. There are few other changes of minor nature. For details of the budget
proposals, the Explanatory Memorandum and other relevant budget documents
may be referred to.