Budget 2021

Nirmala Sitharaman presented Budget 2021 on 1/2/2021.  Her speech lasted 100 minutes unlike last time which remained incomplete after 160 minutes.  After one hour many MPs were drowsy.  Speaker Om Birla had trouble to keep himself awake.

India should not compare itself to USA and talk of 5 trillion dollar economy.  USA prints dollars and dumps them in market.  India has devalued its currency to keep rupee value low mainly to favour exporters.  A strong rupee is needed for a strong India.  India should endeavour to make rupee the strongest currency in the world.  It should be equal to Bitcoin or 40,000 American dollars, whichever is higher.  If any other crypto, digital, fiat or virtual currency goes higher than that, Indian rupee should match that or go higher.

By the way, American trillion has 12 zeros, British trillion 18.  Indian Government means American trillion.

Budget should be surplus or balanced.  Deficit budgets cause inflation and devalue money.

India should scrap Atmanirbhar Bharat – Production Linked Investment Scheme and scheme of Mega Investment Textiles Parks.  Let textile manufacturers do what they want.

Bill to set up Development Financial Institution should be scrapped.  Many industrialists default on debt repayment.  There are delays in implementation of infrastructure projects, cost overruns and escalations.  Government should do infrastructure projects and there should be penalties on contractors who do not complete work on time.

Asset Monetisation is handing over roads, railways, airports, oil and gas pipelines etc to private parties.  Consumers and users will have to pay more.

Economic corridors in Assam, Kerala, Tamil Nadu and West Bengal are planned, which have elections in coming months.  These are in addition to Bharatmala Pariyojana project.

Metro Railway should be left to states or cities.

Providing choice to consumers in power distribution by promoting competition between companies is a good idea.

Public Private Partnership is public money going to private pockets.  When there is loss private parties withdraw and public is left to pay for it and continue the project.  Major Ports should not go for PPP.

No subsidy should be given to Indian or other shipping companies.

Proposal to create an institution to develop Corporate Bond Market should be scrapped.

Public sector banks have lost lakhs of crores of rupees due to default.  It seems the Insolvency and Bankruptcy Code 2016 did not have the desired effect.  Setting up Asset Reconstruction Company Limited and Asset Management Company is useless.  Defaulter should be jailed and their properties confiscated.

No public sector bank should be too big to fail.  Mergers should be reversed.

Privatisation of two public sector banks and one general insurance company should be scrapped.

Agriculture, fisheries and seaweed farming should be left to states.

School education should be left to states.

Economy was going down before pandemic started.  Pandemic is an excuse for weak revenue flow.

There should be no fiscal deficit.  Expenditure should be cut, freebies and subsidies should be done away with, to balance the budget.

Return filers in 2020 should be compared to 2019 and not 2014.  It is disingenuous to say in 2020 return filers saw a dramatic increase to 6.48 crore from 3.31 crore in 2014.  It is not clear whether the reference is to Income Tax Return filers or all tax returns.

Proposals to establish faceless Dispute Resolution Committee and National Faceless Income Tax Appellate Tribunal Centre are good.  We have to see how they work.

India should manage its infrastructure sector and not invite foreign Sovereign Wealth Fund and Pension Funds.  Atmanirbharata means self-reliance.  Inviting foreigners contradicts that.

Pre-filling of Returns is good.

Employers who deduct contribution of employees towards Provident and other funds should pay penalty or be behind bars.

Good to know government has deployed deep analytics and Artificial Intelligence to identify tax evaders and fake billers and launched special drives against them.

Customs duty has gone up on some items like solar inverters and solar lanterns, auto parts and prawn feed, and come down on items like gold and silver, iron and steel, naphtha and nylon.

Agriculture Infrastructure and Development Cess is proposed on certain items.  It is 2.5 rupees per litre on petrol and 4 rupees per litre on diesel.  Basic Excise Duty and Special Additional Excise Duty on them have been reduced so there is no overall price increase.  AIDC ranges from 1.5% on coal, lignite and peat to 100% on alcoholic beverages.  Reduction in Basic Customs Duty ranges from 1% on coal, lignite and peat to 50% on alcoholic beverages.

Some changes are proposed to provisions relating to anti-dumping duty and countervailing duty.  Customs investigations are to be completed in definite timeline.