Finance Minister Nirmala Sitaraman presented the Union Budget 2021 in Lok Sabha on February 1. For the first time in India history, the Union Budget was paperless and it was read out from a 'Made in India' tab. While the highest allocated budget of Rs 4,78,196 crore was allocated to the Defence Ministry, the vaccination drive got Rs 35,000 crore.
The COVID-19 pandemic made every industry feel desolated and people were looking forward to some relief from the Union Budget 2021. Be it in the form of tax deduction or letting off the interest rates. Although, FM Sitharaman did stand up to some of the janta's expectations, but couldn't really cater to all the conjectures.
TBC followed-up with various industries who expressed their expectations from the Budget 2021-22 in our previous article, and here’s what they have to say:
Satish Magar, President, Confederation of Real Estate Developers’ Associations of India (CREDAI)
Section 80IBA for affordable housing has been extended by one year, which was expected due to the pandemic situation. Also scrapping of duties on steel may reduce the steel prices, which will help in keeping the overall housing prices intact. With the hike in Foreign Direct Investment (FDI) in insurance to 74 per cent, there will be more liquidity in the market.
Shivanand Shetty, President, AHAR (Indian Hotel and Restaurant Association)
"The budget has failed to cheer up the restaurant industry which is one of the most affected ones due to Covid-19 pandemic and subsequent lockdowns. After all the turmoil, we had our hopes pinned on the budget and were expecting some positive measures like stimulus package, rationalisation in GST, etc., but again we found no mention in FM’s speech. Such a critical sector contributing well to the GDP and generating employment opportunities cannot be ignored like this especially when it is needed the most."
Sanjiv Kumar Jalan, Head Corporate Audit & Governance, Minda Corporation Limited
It will not be wrong to say that Budget 2021 is a historic budget, as the Finance Minister focused on the all-round growth of all the key sectors, be in infra, textile, and auto. An increase in the customs duty rate on several auto parts will push domestic production. Apart from this transparency and digitization remains the focus of the Government – something that the industry shall cherish in long run. That said, my key take-away from the Budget are as under:
Indirect Taxes -
· Reduction in compliance burden by removal of GST audit by a chartered account is a welcome move,
· Recovery of interest on net cash liability from a retrospective effect, will do away with unnecessary harassment from the authorities,
· Customs common portal will bring transparency in Indirect Tax Laws (with GST already having such a common portal),
· The industry was expecting a Customs Legacy Scheme, which has not been proposed.
Direct Taxes -
· The entire mechanism of Advance Ruling has been replaced with major changes,
· Significant changes in Equalisation levy provisions and TDS related provisions,
· The senior employees' tax burden will increase due to the restriction of exemption on interest from PF fund.
All be it
The Union Budget 2021-22 clearly indicates a massive boost for the economic sentiments and has fulfilled the requisite expectation of the industry at large. While there were certain let downs, all-in-all the budget has struck a balance between remedial measures in law and populism. According to the general reactions, overall, it’s a growth-facilitating budget and seems to aim at supporting economic development in the longer run.