Defence Budget hiked to Rs 4.78 lakh crore; gets biggest capital outlay increase in 15 yrs

Amid India's prolonged standoff at LAC, Defence Minister Rajnath Singh highlighted that defence budget has been hiked to 4.78 lakh crore for 2021-22. While pensions of personnel amount to Rs.1.15 lakh crore, Rs.1.35 lakh crore has been allocated to defence capital expenditure. Thanking Union Finance Minister Nirmala Sitharaman and Prime Minister Narendra Modi for Union Budget 2021-22, Singh revealed that this was highest increase in capital outlay for defence in last 15 years.

Maintaining that this budget lays foundation for a Self-Reliant India, senior BJP leader contended that this will expedite country's ecomic transformation. According to him, this budget is an addition to series of mini-budgets unveiled by Union Finance Minister in 2020 during challenging COVID-19 pandemic. Singh pointed out that it focuses on ecomic reforms, employment generation, capital formation and creating infrastructure in India.

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Union Budget 2021-22

Earlier in day, Union Finance Minister Nirmala Sitharaman presented first-ever digital Union Budget which laid emphasis on 6 pillars- health and well-being, physical and financial capital and infrastructure, inclusive development for aspirational India, reinvirogating human capital, invation and Research and Development and minimum government and maximum governance. To begin with, outlay for health sector was increased by 137% including allocation of Rs.35,000 crore for COVID-19 vaccine. introduction of a new Centrally sponsored scheme- PM Aatmanirbhar Swasth Bharat Yojana has given a big boost to health infrastructure.

re has been a 34.5% increase in capital budget expenditure as compared to 2020-21. In ar big move,  FDI limit in insurance sector has been increased from 49% to 74% besides allowing foreign ownership and control with safeguards. Fixing  disinvestment target for 2021-22 at Rs.1.75 lakh crore, Sitharaman disclosed that every Public Sector Undertakings in all but 4 strategic sectors will be privatised. In 2021-22, fiscal deficit is estimated to be 6.8% of GDP with aim to achieve a fiscal deficit level below 4.5% of GDP by 2025-26.

On direct taxation front, relief has been provided to senior citizens above 75 years of besides changes in mechanisms for reducing disputes and simplifying settlements. For instance,  National Faceless Income Tax Appellate Tribunal Centre will be established. Moreover, Centre has opted for Customs Duty rationalization and introduced   Agriculture Infrastructure and Development Cess on a small number of items to aid farmers. 

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