CHENNAI ■ MADURAI ■ VIJAYAWADA BENGALURU ■ KOCHI ■ HYDERABAD ■ VISAKHAPATNAM ■ COIMBATORE ■ KOZHIKODE ■ THIRUVANANTHAPURAM ■ BELAGAVI ■ BHUBANESWAR ■ SHIVAMOGGA ■ MANGALURU ■ TIRUPATI ■ TIRUCHY ■ TIRUNELVELI ■ SAMBALPUR ■ HUBBALLI ■ DHARMAPURI ■ KOTTAYAM ■ KANNUR ■ VILLUPURAM ■ KOLLAM ■ WARANGAL ■ TADEPALLIGUDEM ■ NAGAPATTINAM ■ THRISSUR ■ KALABURAGI ■ ■ BELAGAVI TUESDAY FEBRUARY 02, 2021 `7.00 PAGES 12 LATE CITY EDITION HOW MINISTRY-LEVEL ALLOCATIONS COMPARE (in J crore) Housing & Urban Affairs Health & Family Welfare Education (HRD) Railways Road Transport & Highways Agriculture & Farmers’ Welfare Rural Development Home Affairs Consumer Affairs, Food, & PDS Defence 50,039.9 67,111.8 99,311.52 72,215.63 91,823.22 1,42,762.35 1,22,398.43 1,67,250.33 1,24,535.43 4,71,378 Actual Exp FY21 RE FY21 MAJOR SCHEMES (in J crore) BE FY22 SCHEME Per cent 28,104.62 46,791 54,581 9.07% 59,117.11 82,928.3 73,932 10.16% 58,558.1 85,089 93,224 6.13% 42,828.51 1,11,233.63 1,10,055 53.39% 72,380.97 1,01,823.22 1,18,101 28.62% 97,640.6 1,24,520.4 1,31,531.2 7.87% 1,57,298.81 1,98,628.7 1,33,690 8.45% 1,49,388.11 1,06,534.4 1,66,546.94 0.42% 1,51,195.6 4,50,686.63 2,56,948 106.32% 3,38,634.4 4,84,736 4,78,196 1.45% BE FY21 RE FY21 BE FY22 Per cent MGNREGA 61,500 1,11,500 PM Kisan 75,000 65,000 National Education Mission 39,161 28,244 National Health Mission 34,115 35,554 Jal Jeevan Mission AMRUT & Smart Cities 11,500 13,750 11,000 9,850 73,000 18.7% 65,000 13.33% 34,300 12.4% 37,130 8.8% 50,011 335% 13,750 0% Higher allocation to health and rural jobs programme, while universal water supply scheme has seen a five-fold jump. But outlay cut down for Modi’s flagship PM-Kisan scheme Low fuel, full throttle TARGET A 1.75 Lakh cr O N T H E C A R D S Stake sale in public sector companies and financial institutions, including 2 PSU banks and one insurance company Govt wants to divest publicsector companies in nonstrategic sectors U P F O R S A L E IDBI Bank BPCL Shipping Corp Container Corporation Neelachal Ispat Nigam L I C I P O Govt plans legislative amendments for LIC IPO in 2021-22 NITI Aayog to prepare next list of central public sector companies that can be divested S U N I T H A N AT T I THERE are no good finance ministers, only lucky ones. Unarguably Nirmala Sitharaman has been , the unluckiest. After “boring and disappointing” budgets, she has boned up on the task and delivered a sensible, growth-oriented budget prioritising investments over fiscal consolidation, a stable tax regime, and spring-cleaning stressed assets and government’s books. The Covid pandemic toppled the arithmetic alchemy in FY21, where expenses and debt rose and income fell. Fiscal deficit will breach past 9.5% largely due to the food subsidy bill, for which government cut a `1.5 lakh crore cheque. With this, the UPA-era offbudget financing gets a quiet burial, the nation’s balance sheet reflects reality and the government wins investors’ trust for transparency and deficit realism. In FY22, expenditure at `34.83 lakh crore is barely `33,000 crore over FY21 — the lowest ever increase in decades. But what sets this budget apart is the quality of expenditure. As Sitharaman tried balancing between thrift and spendthrift, revenue expenditure is tipped for the chop, while capex will jump 34% at `5.54 lakh crore — just what’s needed for job creation and growth recovery . Fiscal deficit will reduce to 6.8% of GDP from 9.5% in FY21, not because tax revenue will be back to its best behaviour, but be- cause of expenditure rationalisation from 17.7% to 15.6% of GDP. Perhaps, the FM hopes in private, that revenue collections will be better than projections. Among sectors, healthcare will get rolls of crisp currency notes aggregating `2.38 lakh crore, but since this includes water and sanitation allocations, Sitharaman’s sincere efforts couldn’t win either the expert or the ordinary . FY21 fiscal deficit pegged at 9.5% The Centre on Monday pegged the fiscal deficit for FY21 at 9.5%, higher than what analysts have predicted as it increased spending, sidestepping the concerns over the impact on the sovereign rating by taking fiscal expansionary stance | P10 Agriculture credit has been raised to `16.5 lakh crore and so are allocations for defence -- somewhat marginal despite the China threat — education and others. However, there was a marked absence of targeted support for distressed housheolds, who for now must survive largely on love. And as if poking on the ribs, interest earned on annual PF contribution exceeding `2.5 lakh is taxable from April. Once taxation begins, it only goes upwards. Additionally, a farm cess on a few items aims to raise `30,000 crore, or 0.1% of GDP. As for banks, there’s a sniper in the woods (bad loans) so government will set up a bad bank at last. Infrastructure got more than one gold vein to pump the heart of the economy The proposed Devel. opment Financial Institution is a good egg though investing in Indian infra has historically been considered risky The asset mon. etisation drive will see almost everything that’s saleable at PSUs hanging a for-sale sign. They can rake in the dough only if buyers don’t jockey for bargains. Perhaps FY2022 will be a year of privatisation starting with two state-run banks and an insurer. We already have a few jilted brides in LIC, BPCL and Air India and disinvestment proceeds have always been the bridesmaid. So, strategic sale of PSUs will rest not on government’s willingness but its resolve to amend laws. In all, the Budget’s spirit is willing, but the flesh is weak with Sitharaman playing schwäbische Hausfrau — southern Germany’s pragmatic Swabian housewife — to guard the nation’s finances. The FM should have used the decade’s first budget setting a definitive agenda for the future and not just the next 12 months. India will be the world’s fastest growing economy. At this moment, we’ve only got one chance and Sitharaman could have displayed a seatof-the-pants ability to regain our rightful place in the sun. New agriculture cess could leave states much poorer E X P R E S S N E W S S E R V I C E @ New Delhi MYANMAR COUP, SUU KYI DETAINED Myanmar’s military staged a coup on Monday and detained many politicians, including Nobel laureate Aung San Suu Kyi. The military blamed it on the government for not acted on claims of fraud in November’s elections in which Suu Kyi’s party won a majority in Parliament | P9 THE crackdown following the Republic Day violence here continued on Monday with the police installing spikes on the road at one of the farmer protest sites, erecting cement walls, barricading arterial roads and even temporarily getting Twitter to suspend 250 accounts. The government also extended the ban on internet services at Singhu, Ghazipur and Tikri borders till Tuesday night. There will be no internet in adjoining areas either. The suspension, which came into effect on January 29, was to be in place till 11 pm on January 31. The government said this is done for “public safety”. While the FM did not change the income tax rates or slabs, a slew of other measures were taken to ease the burden on taxpayers Senior citizens aged 75 years and above having only pension and interest income exempt from filing ITRs. Their bank will deduct the necessary tax on their income Additional tax deduction of `1.5 lakh on interest paid on loan taken to buy affordable home extended till Mar 31, 2022 Time limit for reopening of income tax assessment cases reduced from six to three years; for serious tax fraud cases, where concealment of income is ‘Faceless’ dispute resolution committee for small tax payers with taxable income of up to Narendra Modi, Prime Minister Forget putting cash in the hands of people, Modi govt plans to handover India’s assets to his crony capitalist friends Rahul Gandhi, Congress leader `50 lakh This means the Income Tax Appellate Tribunal will also go faceless and all procedures will be carried out electronically `50 lakh or more, it would be 10 years Pre-filling of returns will also cover capital gains from listed securities, dividend income, etc #AatmanirbharBharatKaBudget is a Budget for farmers and agriculture sector economy... Credit availability will improve, APMC apparatus will be strengthened Threshold for tax audit increased from B5 crore to B10 crore for those transacting 95% digitally Dividend payment to Real Estate Investment Trusts / Infra Investment Trusts exempt from TDS This is a budget to deceive the masses. It’s antifarmer, antipeople and anticountry budget Mamata Banerjee, West Bengal CM Our demand was to hike price of crops, not agri credit. They didn’t talk about MSP. There is nothing in it for farmers Rakesh Tikait, BKU leader CENTRAL FUNDING FOR METRO BIGGEST GAIN FOR KARNATAKA E X P R E S S N E W S S E R V I C E @ Bengaluru READY TO DELIVER Finance Minister Nirmala Sitharaman with her team before leaving the finance ministry for Parliament to present the Budget, in New Delhi on Monday | SHEKHAR YADAV Delhi barricaded, crackdown on Twitter E X P R E S S N E W S S E R V I C E @ New Delhi DISINCENTIVE TAX PROPOSALS At the Singhu border, workers under police supervision were seen hooking iron rods between rows of cement barriers on a flank of the highway to restrict the movement of farmers. Another portion of the highway at the Delhi-Haryana border was blocked by a newly-built cement wall. Farmers put up a brave front and said these barricades would “cage” their spirit. On the government’s request, Twitter blocked about 250 accounts for a few hours for “fake, intimidatory and provocative tweets.” The request to suspend the accounts, sources said, was made to prevent the “escalation of law and order (situation) in view of the ongoing farmer agitation”. P5 Concertina wire added to the barricading at Ghazipur border on Monday | PARVEEN NEGI SUSPENSIONS REVOKED Twitter restored most of the accounts by late evening. Among those whose accounts that were suspended were Kisan Ekta Morcha (@Kisanektamorcha) and BKU Ekta Urgahan (@Bkuektaugrahan), both having thousands of followers KARNATAKA’s biggest takeaway from the Union Budget was in the form of urban mobility Union Fi. nance Minister Nirmala Sitharaman on Monday announced Central counterpart funding for Bengaluru Metro Phase 2 (A) and 2 (B) projects. The 58.19 km stretch from Central Silk Board junction to KR Puram and KR Puram to Kempegowda International Airport is estimated to cost `14,788 crore, of which the Union Government’s direct funding is about 15 per cent. Karnataka will also stand to gain from the Bengaluru-Chennai Expressway under flagship projects schemes. The 278-km expressway’s construction will begin in 2021-22, as per the budget document. Apart from these, the State did not receive any direct big-ticket projects. But allocation to R&D, CK RE P O R RA health, agriculture, education, urban area sanitation, extension of tax holiday to startups, capital gain exemptions, and incentivising innovation and one-person The 58.19-km Metro stretch companies, etc is expected to between Central Silk Board trickle down as a boost to the junction to KR Puram, and economy While opposition lead. KR Puram to KIA to cost ers criticised the budget for handB14,788 crore, of which ing Karnataka a raw deal, BJP direct Central funding is leaders, including CM B S Yediyabout 15% urappa, hailed it as a pro-poor State stands to gain from and pro-middle class budget. the 278-km BengaluruMany, including ministers, inChennai Expressway, whose sisted that `14,778 crore was alconstruction will begin located for Bengaluru Metro, but this fiscal a closer look suggests otherwise. The FM only announced Central counterpart funding of the total project cost of `14,778 crore. The Centre funds 15 per cent of the cost, 35 is raised from multilateral and bilateral development agencies through the Union Government, 35 per cent is funded by the State Government and the remaining 15 per cent is raised from the private sector. “The announcement of ORR-Airport Metro is a big support for public transport and economic activities in Bengaluru. Next two steps for formal approval are consideration and recommendation by the Public Investment Board and approval by the CCEA. MoHUA is working to get these two steps completed within March 2021,” said Ajay Seth, MD, BMRCL. T THE FM on Monday imposed agricultural infrastructure cess on a host of commodities from petrol to alcohol to gold and silver. While it won’t raise costs for the consumer as central excise and customs duties will be cut in tandem, the tweaks mean less money for states from the central coffers. States get no share of central cesses such as those on education cess, road and infrastructure. While the exact amount of money which the states will lose out is yet to be worked out, official say some `30,000 crore will come from the new cess. This year the total income from cen- tral excise and customs duty stood at `4.73 lakh crore. To absorb the new agriculture Infrastructure and Development Cess (AIDC) of `2.5 a litre on petroleum, the Centre has cut the basic excise duty on petrol from `2.98 to `1.4 and from `4.83 to `1.8 a litre for diesel. A similar adjustment has been made for alcoholic beverages that currently attract 150% basic customs duty It has been cut to 50%to . soak in 100% AIDC. While the tippler will continue to pay the same price, states will lose out on revenues. Among products affected by AIDC are gold and silver (2.5%), crude palm oil (17.5%), apples (35%), and cotton (5%). 2,314.84 The stockmarkets gave a big thumbs up to the Budget with the BSE Sensex rallying over 2,000 points to close at 48,600.61 on Monday Source: Budget document MEGA BUDGET SPEND ON ROADS INFRASTRUCTURE POLL-BOUND STATES GET MAMMOTH SHARE BUT OTHERS LEFT OUT TWEAKS IN EXCISE AND CUSTOMS DUTIES DOOR WIDE OPEN FOR FOREIGN INSURANCE FIRMS DISINVESTMENT AMIT BANDRE T BE FY21 (UP TO DEC 2020) MINISTRY Political hot potato EPF now taxable J AYA N TA R O Y C H O W D H U R Y @ New Delhi HIDDEN in the fine print of the budget is a shocker for salaried people – interest on employees contribution to provident fund beyond `2.5 lakh a year or a tad more than `20,000 a month will no longer be tax free. Most people prefer to save through contributions to the Employees Provident Fund Organisation as this was EEE or Exempt, Exempt, Exempt, a system where the money one saves is exempt of taxes at all three stages — when saved, when interest is accumulated on it and when withdrawn. “It is proposed to restrict tax exemption for the interest income earned on the employees’ contribution to various provident funds to the annual contribution of `2.5 lakh. This restriction shall be applicable only for the contribution made on or after April 1, 2021,” the budget document said. Some 12% of an employee’s basic salary and performance wages is deducted as provident fund, while the employer contributes another 12%. It means anyone who earns more than `20.83 lakh a year will see his or her interest on EPF contribution being taxed. “This means the EPF is no longer an EEE scheme but a ETE or exempt when putting in, taxed when earning an income and exempt when withdrawing scheme,” said Sudhakar Sethuraman, par tner, Deloitte India. “We have also to see the impact of the new labour code, which some calculate may result in at least 66% of the total remuneration being turned into basic salary,” he added. INSIDE WELCOME REFORMS, FOCUS ON EFFICIENCY I P6 FDI IN INSURANCE WON’T LIMIT INDIAN MGT CONTROL I P10 CUSTOMS DUTY HIKE MAY MAKE ACs COSTLIER I P12 EXPRESS READ Lt Gen Mohanty is Vice Chief of Army New Delhi: Lt Gen Chandi Prasad Mohanty on Monday took charge as the Vice Chief of the Army Staff, succeeding Lt Gen SK Saini. In a career of four decades, he served in various posts in field and counter-insurgency environments. India, US start talks on F-15EX: Boeing Washington: The US and India have held discussions on F-15EX jets and the two respective air forces have exchanged information about it, a Boeing official said, as the firm is offering the aircraft to the IAF.
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