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Last updated: 02 Feb, 2021  

budget-indiaTHMB.jpeg Budget 2021

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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.

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