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In a short while from now, Union Finance Minister Nirmala Sitharaman will present the Union Budget for 2021-22. The announcement comes after a year of pain and suffering caused by the coronavirus pandemic. India has recorded over 1.7 crore COVID-19 cases, including over 1.54 lakh deaths.
Thus, FM Sitharaman’s announcements will be keenly watched by all to see how India works towards reviving the pandemic-battered economy.
Like every year, the aam aadmi, industries and the market have their wish list for the finance minister. These expectations assume greater significance this time due to the pandemic’s impact on income levels, businesses and the trade.
Union Budget 2021 LIVE Updates
Here is a quick look at the key expectations:
Increased threshold for income not liable to tax
Given the pandemic, many are hoping that the Centre may increase the basic exemption limit for income not liable to tax from Rs 2.5 lakh to Rs 3.5 lakh. This will provide more disposable income to people, and increase their spending capacity, which would augur well for the economy.
Watch: What aam aadmi wants from Budget 2021? Moneycontrol Manifesto tries to answer
Relief in long-term gains
Currently, long-term capital gains arising from sale of listed securities over Rs 1 lakh are taxable at a flat rate of 10 percent, without indexation. This causes hardship to long-term investors as they are taxed on gains without considering inflation. It is expected that the rate of long-term capital gains would be reduced to 5 percent, and the threshold would be increased to Rs 2 lakh, to promote further capital infusion into the equity market from ordinary investors.
Read: What the tax-paying common man wants from Budget 2021
Public spending, infra and manufacturing push
Higher public spending, and focus on infrastructure and manufacturing sectors are the three priority areas which FM Sitharaman needs to address in the Budget, leading figures of India Inc. said as part of the CII-Moneycontrol CEO Budget Survey.
The most important step the Centre can take in the Budget is to announce record capital expenditure, according to 29 percent of the survey’s respondents. About 24 percent said that individuals should be given tax breaks to ensure greater disposable income.
Read: Captains’ View | India Inc wants focus on public spending, manufacturing sector, finds out CII-Moneycontrol CEO Budget Survey
In order to create more jobs, the government needs to provide incentives to small and medium enterprises (SMEs) to expand and hire more, said 55 percent of the respondents in CII-Moneycontrol’s survey.
Read: A wish list of the tax incentives we want
Healthcare may finally get its due
The COVID-19 pandemic, one of the biggest health emergencies of our times, may well propel the Centre to significantly increase spending on public health in the coming fiscal. FM Sitharaman has already spoken of a Budget like “never before” and hinted at an increased emphasis on healthcare in FY22.
India has long been languishing at the bottom of the health-spending pecking order, with the latest Oxfam report showing that the country’s expenditure on health as a percentage of the total budget is the fourth lowest anywhere in the world.
Follow Moneycontrol’s full coverage of Union Budget 2021-22 here