Bikky Khosla | 02 Feb, 2021
A 'Budget like never before' -- this is what the
Finance Minister had promised, and it seems she, on Monday, delivered on her
promise to a great extent. Despite the fact that it came in the backdrop of an
unprecedented global pandemic, the Budget, by identifying six pillars --
health, physical and financial capital and infrastructure, inclusive
development, human capital, innovation and minimum government and maximum
governance – has successfully catapult optimism.
Budget 2021 focuses on growth over fiscal consolidation.
This is encouraging. We have long been calling for strong measures to push the
infrastructure sector, and now the announcement like setting up of the
Development Financial Institution (DFI) sounds encouraging. Again, the emphasis
on healthcare infrastructure, with proposal for 137% increase in health &
well-being spending, is welcome. Similarly, the decision to pursue an
aggressive disinvestment programme deserves mention.
For startups, there are some major announcements.
Tax holiday for startups is now extended by one more year. These enterprises
will now get capital gains exemption to 31 March 2022. Startups also have one
more year to claim tax holiday. Similarly, the Budget proposes to reduce the
margin money requirement for startups from 25% to 15%. This will help them
upscale their business. Also, there is a proposal to incentivize incorporation
of one-person companies. This is good news for entrepreneurs and innovators.
The Budget has made a provision of Rs 15,700 crore
for the Ministry of Micro, Small and Medium Enterprises. The sector was
allocated Rs. 7,572 crore in the previous union Budget of 2020-21. The Finance
Minister also announced that a special framework for resolution of bankrupt
MSMEs will be introduced. Also, the Budget has proposed to revise the
definition under the Companies Act, 2013 for small companies by increasing
their thresholds for paid up capital. These proposals are encouraging.
I invite your opinions.