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An Analysis of Budget 2021-22

The article is written by Sneha Mahawar, a  law student at Ramaiah Institute of Legal Studies. The article discusses the important highlights and gives an overview of the Budget 2021-22. 

Introduction of Budget 

As per Article 112 of the Constitution of India, 1949, it requires the government to present to parliament a statement of estimated receipts and expenditure in respect of every financial year- 1st April to 31st March. In our Indian Constitution budget is written as an Annual Financial Statement. It is a spending plan formulated by the government mentioning their expenditure and revenue for a certain time period. 

However, in the general sense, budget is regarded as the amount of money or resources earmarked for a particular institution, activity, or time frame. It is an itemized summary of intended expenditure usually coupled with expected revenue. 

Important highlights of Budget 2021-22

  • On 1st February 2021, Finance Minister, Nirmala Sitharaman presented in the Parliament the budget for 2021-22 the financial year starting from 1st April 2021 and ending on 31st March 2022. 

  • While presenting the Union Budget for 2021-22, Finance Minister Nirmala Sitharaman said that the Budget proposals for this financial year 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, and Minimum Government and Maximum Governance. 

  • Moreover, other significant announcements included a slew of hikes in customs duty to benefit Make in India, a proposal to disinvest two more PSBs and a general insurance company, and numerous infrastructure pledges to poll-bound States. The fiscal deficit stands at 9.5% of the GDP and is estimated to be 6.8% in 2021-22. Personal income tax slabs remain as it is.  

  • The budget seeks to reduce the compliance burden on senior citizens who are of 75 years of age and above. Such senior citizens having only pension and interest income will be exempted from filing their income tax returns.  

Six pillars of Budget 2021-22

  1. Health and Wellbeing 

  • In the budget 2021-22 the government announced that PM AatmaNirbhar Swasth Bharat Yojana will be launched with an outlay of about Rs. 64,180 crore over 6 years. This will benefit in developing capacities of primary, secondary, and tertiary health care systems. 

  • The primary health care system deals with the health care system at the village level. 

  • The secondary health care system deals with the health care system of the city hospitals. 

  • The tertiary health care system deals with the health care system of the super-specialty hospital such as AIIMS (All India Institute of Medical Sciences). 

  • A provision was created of Rs. 35,000 crore for the covid-19 vaccine in Budget estimate 2021-22. 

  • The government will merge the Supplementary Nutrition Programme and Poshan Abhiyan and launch Mission POSHAN 2.0.  

  • Poshan Abhiyan targets to reduce stunting, undernutrition, anemia (among young children, women, and adolescent girls), and reduce low birth weight. 

  • Supplementary Nutrition Programme is a scheme under which infants were provided with supplementary nutrition. 

  • A Voluntary Vehicle Scrapping Policy was announced to phase out old and unfit vehicles. 

  • The Voluntary Vehicle Scrapping Policy is expected to increase the production and capacity utilisation of vehicles. 

  • The Voluntary Vehicle Scrapping Policy is seen as an attempt by the government to boost automobile demand. 

  • Fitness test has been proposed in automated fitness centres after 20 years in the case of personal vehicles, and after 15 years in the case of commercial vehicles. 

  1. Physical and Financial Capital and Infrastructure

Roads and Highways Infrastructure

  • More than 13,000 km length of roads, at a cost of Rs. 3.3 lakh crore, has already been awarded under the 5.35 lakh crore Bharatmala Pariyojna Project of which 38,000 km has been constructed. 

  • By March 2022, the government would be awarding another 8,500 km and complete an additional 11,000 km of national highway corridors. 

Railway Infrastructure 

  • Indian railways have prepared a National Rail Plan for India- 2030. 

  • The plan is to create a “future-ready” railway system by 2030. 

  • The core strategy to enable “Make in India” is to bring down the logistic costs for our industry. 

  • By June 2022, it is expected that Western Dedicated Freight Corridor (DFC) and Eastern Dedicated Freight Corridor (DFC) will be commissioned. 

  • Eastern Dedicated Freight Corridor (DFC) starts at Sahnewal (Ludhiana) in Punjab and ends at Dankuni in West Bengal. 

  • Western Dedicated Freight Corridor (DFC) is from Dadri in Uttar Pradesh to Jawaharlal Nehru Port Trust in Mumbai, touching all major ports along the way.  

Urban Infrastructure 

  • The government announced that a new scheme will be launched at a cost of Rs. 18,000 crore to support the augmentation of public bus transport services. 

  • Two new technologies namely, MetroLite and MetroNeo will be deployed to provide metro rail systems at a much lesser cost with the same experience, convenience, and safety in Tier-2 cities and peripheral areas of Tier-1 cities.

Petroleum and Natural Gas increasing 

  • Following key initiatives are being announced:

  • Ujjwala Scheme is a scheme under which women under Below Poverty Line (BPL)are provided free LPG cylinders which have benefitted 8 crore households will be extended to cover 1 crore more beneficiaries. 

  • The government will add 100 more districts in the next 3 years to the City Gas Distribution network. 

  • A gas pipeline project will be taken up in the Union Territory of Jammu and Kashmir.

Increasing Foreign Direct Investment (FDI) in Insurance Sector

  • It was proposed to amend the Insurance Act, 1938 to increase the permissible FDI limit from 49% to 74% and allow foreign ownership and control with safeguards. 

Disinvestment and Strategic Sale 

  • The Finance Minister said several transactions namely BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachallspat Nigam limited among others would be completed in 2021-22. (Disinvestment)

  • Other than IDBI Bank, Government proposes to take up the privatisation of two public sector banks and one general insurance company in the year 2021-22. 

  • In 2021-22, the government would also bring the IPO of LIC for which the requisite amendments will be made in the session itself. 

  1. Inclusive Development for Aspirational India


  • The Minimum Support Price (MSP) regime has undergone a sea change to assure a price that is at least 1.5 times the cost of production across all commodities. 

  • To provide adequate credit to our farmers, the government has enhanced the agricultural credit target to Rs. 16.5 lakh crore in Fiscal Year 2022. 

  • 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 (TOP), will be enlarged to include 22 perishable products. 

Migrant Workers and Labours 

  • The government has launched the One Nation One Ration Card scheme through which beneficiaries can claim their rations anywhere in the country. One Nation One Ration Card plan is under implementation by 32 states and union territories, reaching about 69 crore beneficiaries (86% beneficiaries covered). The remaining 4 states and union territories will be integrated in the next few years. 

  • Government proposes to 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. 

  1. Reinvigorating Human Capital


  • The Finance Minister said that the National Education Policy (NEP) announced recently has had good reception while adding that more than 15,000 schools will be qualitatively strengthened to include all components of the National Education Policy.

  • It was further announced that 100 new Sainik schools will be set up in partnership with NGO’s/private schools/states. 

  • For accessible higher education in Ladakh, the government proposed to set up a Central University in Leh. 

Scheduled Castes and Scheduled Tribes Welfare 

  • The government has set a target of establishing 750 Eklavya model residential schools in tribal areas with an increase in the unit cost of each such school from Rs. 20 crore to Rs. 38 crore, and for hilly and difficult areas, to Rs. 48 crore. 

  1. Innovation and R&D

  • The government will undertake a new initiative- National Language Translation Mission (NLTM). This will enable the wealth of governance-and-policy-related knowledge on the internet to be made available in major Indian languages. 

  • 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. 

  1. Minimum Government and Maximum Governance

  • The government announced that the forthcoming Census could be the first digital census in the history of India and for this monumental and milestone-marking task, Rs, 3,768 crores allocated in the year 2021-22. 

  • The Finance Minister has stated that the fiscal deficit is RE 2020-21 is pegged at 9.5% GDP.

  • The fiscal deficit in BE 2021-22 is estimated to be 6.8% of GDP.

  • The government plan to continue the path of fiscal consolidation and intend to reach a fiscal deficit level below 4.5% of GDP by 2025-26 with a fairly steady decline over the period. 


Hence, budget 2021-22 covers various aspects such as health, sanitization, infrastructure, education, tax, economy, finance, agriculture, employment, etc. It also includes economic reform schemes, direct tax proposals, indirect tax proposals, etc. 


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