GK Capsule February 2021

Welcome to Endeavor’s news bulletin for February 2021. In this blog, we will cover major news, current affairs, and the happening of this month.

On the 1st of February, Finance Minister Nirmala Sitharaman has presented the Union Budget in the Parliament for the upcoming financial year 2021-22. This was the third budget presented by Nirmala Sitharaman. The budget was keenly watched as it was expected to support an economy badly hit by the coronavirus pandemic. The budget estimates the Indian economy to contract by 7.7% in the current fiscal year, although it forecasts growth of 11% for the coming year, after a massive vaccination drive and a rebound in consumer demand & investments. The finance minister said that the budget stands on six pillars, which are —(i) health and wellness, (ii) physical and financial capital and infrastructure, (iii) inclusive development (iv) human capital (v) innovation, and (vi) minimum government and maximum governance. In significant changes to the taxation process, Sitharaman announced the scrapping of income tax for senior citizens under certain conditions, new rules for removal of double taxation for NRIs, and a reduction in the time period of tax assessments among other measures. Startups will get an extension in their tax holiday for an additional year. India’s fiscal deficit is set to rise to 9.5% of GDP in 2020-21. This is sharply higher than the 3.5% of GDP that was projected in the last year’s budget. A decline in government revenues due to COVID-induced lockdown has led to a sharp rise in the deficit. In order to boost the revenue, the IPO of LIC will be brought this year. Two public sector banks and one general insurance company will also be taken up for strategic disinvestment this year. In Budget 2021-22, Union minister Nirmala Sitharaman kept the income tax slabs the same as the previous year. However, a new Agriculture Development Cess of Rs. 2.5 per liter on petrol and Rs. 4 per liter on diesel have been introduced in the budget. Giving relief to those who depend on pension income, persons above 75 years of age are exempted from filing income tax returns. As mentioned earlier, the healthcare sector is a priority in this year’s budget. In health care spending, Nirmala Sitharaman announced a total spend of around Rs 2 lakh crore on healthcare with Rs 35,000 crore on Covid-19 vaccine development. Markets responded to the budget positively. Sensex rose by nearly 1160 points at the conclusion of the budget speech.

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