After the economy hit the rock-bottom post the pandemic-created market slowdown, India is looking up at the union budget 2021-22 with great expectations. The budget was presented by Finance Minister Nirmala Sitharaman who we believe made some exciting announcements that would help the economy get back to normal.
In this blog, let’s do an in-depth analysis of the eight key areas that broadly impacts businesses, MSMEs, taxpayers, and the common man introduced in Union Budget 2021, first paperless budget is history of India.
8 Highlights from Union Budget 2021-22 for Small Businesses in India
Here are the eight key takeaways for the union budget, Nirmala Sitharaman had announced this morning.
The Monday’s budget speech of the Finance Minister outlined six pillars to strengthen the vision of an Atmanirbhar Bharat (self-reliant India). Through this vision, the govt. aims to work towards the health and well being of the country that is driven by capital and infrastructure, inclusive development, reinvigorating human capital, innovation and research and development, and minimum government and maximum governance.
Focus on Healthcare
In her speech, Minister Nirmala Sitharaman announced to outlay ₹2.23 lakh crore for healthcare – which is an increase of 137% from the last year. With this amount, the government aims to focus on preventive and curative healthcare and wellbeing of the people. The govt. also announced ₹35,000 crore for COVID-19 vaccine production by fiscal year 2022.
Government has also announced to setup seven textile parks under its mega investment scheme in the Budget FY22. These parks will be setup on lands over 1000-acres in size.
The textile park will be laid out with world class infrastructure, plug-and-play facilities, and an additional ₹10,683-crore production linked incentive scheme for technical textiles and manmade fibres.
The govt announced new vehicle policy in Union Budget 2021, according to which, the private vehicles will have to undergo a fitness tests after 20 years and commercial vehicles after 15 years, said Sitharaman.
A Development Financial Institution (DFI) was also introduced by the government, with an aim to have a lending portfolio of ₹5 lakh crore in 3 years.
Banking and Companies
The budget speech also had an announcement of allocating Rs. 20,000 crore for bank recapitalization for public sector banks (PSBs). The minister also shared a proposal to revise the definition of small companies in the Companies Act, by increasing their threshold for capitalization.
The govt. also announced Bad Banks in budget session, which will help a bank in segregating its good assets from the bad assets. So that banks can focus on fresh lending.
Finance Minister Sitharaman also proposed to double digit the MSME allocation, outlaying ₹15,200 crores for medium and small enterprises by fiscal year 2022.
In tax relief, the govt. eliminated the double tax rule for NRIs on foreign retirement funds. The govt. made no changes with regard to direct taxes rules. However, it took steps in incentivizing of direct taxes to encourage taxpayers to pay taxes. The personal income tax slab also remained unchanged in this budget.
In the budget speech, Sitharaman also announced the incorporation of companies with one-person ownership such as startups with no restriction on paid-up capital and turnover.
The government also gave a go ahead to non-resident Indians (NRIs) to form one-person companies. As of now, only an Indian citizen or an Indian resident can act as a member and nominee of one person companies.