Budget 2021-22 special www.freepressjournal.in | twitter.com/fpjindia Reg. No. Mcs/048/2018-20; RNI No. 1541/1957 I M.p.c.s office Mumbai-400001 SPEND & SPEND–THAT’S THE CURE 320c. 210c. Sunrise: 07:12 am Sunset: 06:32 pm Vol. 64 No. 235 | TUESDAY | FEBRUARY 2, 2021 | 19 Pages | EDITIONS: Mumbai*, Pune, Indore, Bhopal, E-Paper Dr Nirmala Sitharaman’s prescription for pandemic-hit economy Only by becoming a devotee of God can you conquer death. Sri Ma •BUDGET MORE THAN DOUBLES HEALTHCARE SPEND•MAJOR PUSH FOR ‘ATMANIRBHAR’ INDIA• •BOOST FOR INFRASTRUCTURE•NO RELIEF FOR MIDDLE CLASS•FISCAL DEFICIT PROJECTED AT 6.8% OF GDP• F R SRINIVASAN inance Minister Nirmala Sitharaman more than doubled the outlay for healthcare to Rs 2.2 lakh crore, including Rs 35,000 crore for Covid vaccines, and sharply stepped up capital expenditure on infrastructure projects in a Rs 35 lakh crore spending plan aimed at repairing the havoc wreaked by the Covid19 pandemic and kickstart economic growth. Tabling the Union Budget for 2021-22 in Parliament on Monday – her third Budget, and the first ‘paperless’ one in history , read out from a Made in India tablet – the FM said the budget rested on six pillars -- health and wellbeing, physical & CAPSULES PSUs FOR SALE TWO PSU Banks and one Insurance firm are to be privatised. However, big banks such as  or PNB will not be SBI  touched; rather, it is the smaller and middle-level banks that are being targeted. The government has also not disclosed the name of the public sector insurance firm that will be privatised. FARM PETRO CESS THE GOVERNMENT on Monday imposed agriculture and infrastructure development cess at the rate of Rs 2.5 per litre on petrol and Rs 4 per litre on diesel to mobilise additional resources. However, to prevent the additional cess from impacting the retail price of the two petroleum products, Finance Minister Nirmala Sitharaman announced that rates of basic excise duty and special additional excise duty on petrol and diesel are being reduced from the existing levels. That would keep oil marketing companies away from raising the retail price of petrol and diesel based on the new imposition. BAD BANK PLAN THE FP has proposed a socalled ‘bad bank’ which will take over the stressed assets of public sector banks and manage them. This will free PSU banks’ books for fresh lending, as well as make them more attractive disinvestment targets. ZERO-COUPON BONDS IN A BID to attract investments into the infrastructure sector, the government will notify Infrastructure Debt Funds eligible to raise funds by issuing tax efficient "zero coupon bonds". A zero-coupon bond is a debt security that does not have to pay interest but instead trades at a deep discount, rendering a profit at maturity, when the bond is redeemed for its full face value. POLL-BOUND STATES PF WAIVER GOES INDIVIDUALS WHOSE PF contribution is  2.5 lakh or Rs more in a financial year, will not be able to seek tax exemption on the interest earned from the next financial year. Currently, interest earned on provident fund is exempted from income tax. The number of people who contribute such a sum is less than 1 per cent of total contributors. MOBILES DEARER SMARTPHONE PRICES may be up for a hike in view of the waiver of key exemptions in the manufacturing sector and imposition of 2.5 percent customs duties on components, parts and sub-parts that are imported from other countries. This is part of the bid to push for “greater domestic value addition” from the sector. As a result, brands may choose to ship smartphones without a bundled charger. Growth-oriented fiscal stimulus ANALYSIS / RINGSIDE VIEW SUU KYI IS OUSTED BY MILITARY Ajit Ranade T he government cannot spend even a rupee without the consent of Parliament. Hence its annual spending plan, called the Union Budget proposal, is tabled in the Lok Sabha, as required by the Constitution. The budget proposals are examined for how they impact the common man, how resources are to be raised, how is the gap to be filled, how will it affect economic growth, and whether the proposals make sense and are credible. On the eve of the budget the Prime Minister had said that the budget would carry on the work of the previous year, when five mini-budgets were presented in the pandemic year, under the “ Atmanirbhar” package. By contrast the finance minister had said this would be a “never-before”, once-in-a century kind of budget. AP/NAYPYITAW This is possibly the first such budget which is showing conviction about government vacating space for the private sector What we have got is certainly very bold and ambitious. It is clearly focused on reviving growth. It makes up for the lack of fiscal stimulus that was mostly absent during the pandemic year. It now makes sense, that the government chose to backload the fiscal stimulus, at a time when most of the lockdowns around the country are being dismantled. For if people are stuck in their homes, then fiscal spending would not bring a bigger bang for the buck. CONTD. ON P15 Myanmar's military staged a coup on Monday and detained senior politicians, including Nobel laureate Aung San Suu Kyi — a sharp reversal of the significant, if uneven, progress toward democracy the Southeast Asian nation has made following five decades of military rule. An announcement read on military-owned Myawaddy TV said Commander-in-Chief Senior Gen. Min Aung Hlaing would be in charge of the country for one year. It said the seizure was necessary because the government had not acted on the military's claims of fraud in November's elections — in which Suu Kyi's ruling party won a majority of the parliamentary seats up for grabs — and because it allowed the election to go ahead despite the coronavirus pandemic. CONTD. ON P15 Sop for those above 75 FROM OUR BUREAU / New Delhi Finance Minister Nirmala Sitharaman on Monday neither gave relief nor effected any change in the income tax rates, except for giving a lollipop of exemption to those above 75. Senior citizens in this category need not file income tax returns, provided they are dependent only on pension and interest and have no other source of income. FACELESS DISPUTE: She also offered a faceless dispute resolution committee to those with taxable income up to Rs 50 lakh and dis- puted income up to Rs 10 lakh. Also, the reopening of the assessment has been reduced from six years to three years, which means the returns will not be checked after three years. This will reduce litigation and uncertainty for the taxpayers. Also, only serious tax offences of concealment of income of over Rs 50 lakh can be reopened after 10 years. Sitharaman also promised relaxation to the NRIs and rules to stop their harassment with double taxation. The tax holiday for the start-ups has been further extended by one year till March 31, 2022. CONTD. ON P15 Mad scramble to rly stations SWAPNIL MISHRA & PRATIP ACHARYA Mumbai At railway stations across Mumbai, on Monday the , scenes seemed right out of a day in February 2020. On the first day that Mumbai locals were open to all, after 10 long months, there was chaos at ticket counters and the confusion over time slots had fewer commuters boarding trains. However, 34 lakh passengers travelled on the first day on both Western and , Central Railways, as compared to the 21 lakh who ONE-PERSON COS GET NOD FPJ NEWS SERVICE / New Delhi With the Union government deciding to extend the tax holiday claim of start-ups by one more year and incentivise the incorporation of one-person companies (OPCs), stakeholders in the industry have welcomed the moves, saying these will promote ease of doing business, promote entrepreneurship and boost investments. Presenting the Budget on Monday Union Finance Min, ister Nirmala Sitharaman said that the government will allow the growth of oneperson companies without any restrictions on paid-up capital and turnover. CONTD. ON P15 PIC: BL SONI THE BUDGET was also a shrewd exercise in politics, with a significant share of the new road and railway projects being allocated to the four poll-bound states of West Bengal, Assam, Tamil Nadu and Kerala. Both Kochi and Chennai Metro projects got fresh funds, while Tamil Nadu also got an innovative seaweed park, as well as new fishing harbours and other projects. financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D and minimum government, maximum governance. This massive surge in spending – both in the current fiscal, which saw total expenditure surge to Rs 34.5 lakh crore, as against a Budget Estimate of Rs 30-42 lakh crore for 2020-21, as well as the Rs34.83 lakh crore for FY 2021-22 – will send the fiscal deficit to 6.8 per cent of GDP in the coming fiscal. While this is lower than deficit of 9.5 per cent for the ongoing fiscal, this is well above the 3 per cent mandated by the FRBM Act, which is now proposed to be amended in view of the changed circumstances. The deficit is to be financed largely through sharply stepped up government borrowing, as well as travelled on January 29, which means almost 42 per cent of commuters were back in action, as compared to March last year. CONTD. ON P15 PUNJAB MAIL AVOIDS DELHI TAILPIECE T FPJ NEWS SERVICE / New Delhi he Ferozepur-Mumbai Punjab Mail was diverted from Rohtak to Rewari on Monday morning to prevent around 1000 farmers from reaching Delhi, social activist Yogendra Yadav claimed on Twitter. According to an online media report, the train, one of the oldest in India, has a 20-minute halt at Delhi, where it enters from Rohtak. However on Monday it did not take that route and was routed via Rewari in Haryana and then further westward to take the route to Mumbai. Apparently, there were few takers for farmers in the Capital on Budget day . disinvestment of public sector units, including at least one bank, a general insurance company and dilution of stake in LIC, to mop up a planned Rs 1.75 lakh crore. While she avoided levying any new taxes on income – a ‘Covid cess’ was widely feared – she disappointed the middle class, which has been hard hit by job losses and pay cuts forced by the slowdown by refraining from offering any relief on the income tax front. However, compliance burden was eased, with simpler procedures for small disputes and an exemption from filing a return (although not an exemption from tax) for senior citizens aged 75 years or older, who relied solely on pension and interest income. CONTD. ON P15 A king/ruler is the one who creates and acquires wealth, protects and distributes it for common good SENSEX CHEERS The stock markets cheered the Budget – the Sensex gained over 2,300 points – and bond yields rose 12 basis points, signifying debt market worries at the size of government borrowing. – FM Nirmala Sitharaman Sanitiser instead of polio shot SANJAY JOG / Mumbai On the heels of the tragedy in which 10 newborns were charred to death in a fire at the Bhandara district general hospital, comes another disastrous episode, involving children. Twelve children, be- tween one and five years of age, were administered hand sanitiser instead of the polio vaccine at the Kapasi Kopari village under the Ghatanji Primary Health Centre (PHC) in Yavatmal. They were admitted to the government medical college in Yavatmal after they began vomiting. The department of public health has sought a report from the district authorities, as the incident took place during the nationwide polio vaccination campaign that began across the country from January 31. Yavatmal District Collector M Devender Singh visited the hospital at night to inquire about the condition of the children. Zilla Parishad Chief Executive Officer Shrikrishna Panchal has launched an investigation into the incident. CONTD. ON P15