Union Budget 2021: Key highlights and takeaways from Nirmala Sitharaman's budget

Finance Minister Nirmala Sitharaman on Mondayunveiled Union Budget 2021-22that aims to shore up the Indian economy post coronavirus pandemic.

The Union Budget 2021-22 proposals rest on six pillars: Health and well-being, physical and financial capital and infrastructure, inclusive development for aspirational India reinvigorating human capital, innovation and R&D, minimum government and maximum governance.

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The economy is projected to contract 7.7 per centin the current fiscal year, although the government forecasts growth of 11 per centfor the coming fiscal year, after a massive COVID-19 vaccination drive and a rebound in consumer demand and investments.

However, after a steep drop in the first two quarters, the Indian economy is seen to be recovering with positive GDP growth in the last two quarters.

These are the highlights from Sitharaman's fiscal 2021-22 budget speech:

Deficit

* 2020/21 fiscal deficit seen at 9.5 per centof GDP

* 2021/22 fiscal deficit seen at 6.8per centof GDP

* 2025/26 fiscal deficit target set at 4.5per centof GDP

Expenditure

* 2020/21 revised expenditure 4.39 trillion rupees ($60.14 billion)

* 2020/21 capital expenditure estimated at 5.54 trillion rupees ($75.90 billion)

* 2021/22 gross expenditure seen at 34.83 trillion rupees ($477.16 billion) in 2021/22

* To provide more than 2 trillion rupees ($27.40 billion)for states and autonomous bodies

Borrowing

*Indiasays will need 800 billion rupees ($10.96 billion) in next two months from bond market

* 2021/22 gross market borrowing seen at 12 trillion rupees ($164.40 billion)

Healthcare

*Indiato allocate 2.2 trillion rupees ($30.20 billion) for healthcare in 2021/22

* Sitharaman says expect two or more COVID-19 vaccines soon

*Indiato launch new federal health scheme with outlay of around 641 billion rupees ($8.80 billion) over the next six years

* To allocate 350 billion rupees ($4.81 billion) for COVID-19 vaccines, and allocate more funds if needed.

Finance

*Indiato introduce bill for development financial institution with capital of 200 billion rupees ($2.74 billion)

* To infuse 200 billion rupees ($2.74 billion) for recapitalization of state-run banks in FY2022

*Indiato consolidate certain SEBI regulations for Securities Market Code

* To relax FDI cap for insurance sector to 74 per centfrom 49per cent

* Set up asset reconstruction company to take over toxic assets

* To cut money market requirement to 15per centfrom 25per cent

* To allocate 15 billion rupees ($205.50 million) for scheme to incentivise use of digital payments

*Indiato incentivise incorporation of one-person companies

Taxation

* Proposes exemption to senior citizens for filing income tax returns

* Proposes changes in personal income taxes for non-residentIndian

* To set up dispute resolution panel for small taxpayers

Divestment

*Indiasets 2021/22 divestment target at 1.75 trillion rupees ($23.97 billion)

*Indiato divest two public sector banks and one general insurance company

*Indiato launch IPO of Life Insurance Corporation

*Indiato announce policy for privatisation of state-run companies

* To create new list of companies for divestment

*Indiato introduce new mechanism for privatisation of loss-running state-run companies

* To monetise surplus lands of public sector entities

Infrastructure

* To allocate 2.87 trillion rupees ($39.40 billion) for clean water supplies over the next five years

* To allocate 3 trillion rupees ($41.10 billion) for power sector for next five years

* To provide 10 billion rupees ($137.01 million)to Solar Energy Corporation ofIndia

* Sitharaman says will move to end power distribution company monopolies

* To double ship recycling capacity by 2024

*Indiato monetise infrastructure assets

Transport

* Allocates 1.18 trillion rupees ($16.17 billion) for ministry of roads and highways

* Allocates 1.1 trillion rupees ($15.07 billion) for railways

* Railways to monetise freight corridors

*Indiato launch new vehicle scrapping policy

* Proposes tax holiday for aircraft leasing firms inIndia

Agriculture

*Indiaallocates an estimated 1.7 trillion rupees ($23.29 billion) for paddy procurement

* Hikes enhanced agriculture credit target to 16.5 trillionindian rupees ($226.05 billion) in 2020/21

* To include loans for activities in allied sectors in agriculture

* To discontinue small savings fund loans to Food Corporation ofIndia

Labour

* To launch database for gig economy, building and construction workers

* Social security benefits to be extended to gig economy workers