Consumers won't pay more due to Agri-Infra Cess, clarifies FM

16:18 February 01

Finance Minister Nirmala Sitharaman's post-Budget press conference has ended. Here are the highlights from her presser: 

16:14 February 01

Expecting Rs 30,000 crore through Agri-Infra Cess

"We are expecting Rs 30,000 crore through Agriculture Infrastructure and Development Cess. This cess has been designed in such a manner that it will not impact the common man," Finance Secretary AB Pandey said.

16:09 February 01

FM explains why fiscal deficit was higher than projected

Finance Minister Nirmala Sitharaman explained why fiscal deficit in 2020-21 ended up higher than that projected in Budget 2020:

1. Revenue shortfall in March 2020, due to extension of dates for payment of direct and indirect taxes, in wake of COVID-19
2. Payment of GST cess compensation to states

15:56 February 01

Dialogue only solution: Sitharaman on farmers' stir

Responding to a question on the ongoing farmers' stir, Finance Minister Nirmala Sitharaman said that the government was ready to discuss the three farm reform bills clause by clause.

"On Farm laws, the Government is and has always been open to dialogue with farmers. Agriculture Minister has been ready to have clause-by-clause discussion with farmers on the farm laws. I still believe that dialogue is the only solution (to resolve the farmers’ protest)," she said.

15:54 February 01

Defence Budget allocation for capital gone to Rs 1,35,060 cr

"The Defence Budget consists of three components - revenue, pension, and capital component. The Budget allocation (for the capital component) in 2020-21 was Rs 1,13,734 crore. It has gone to Rs 1,35,060 crore which is an increase of 20 per cent," said TV Somanathan, Secretary, Expenditure.

15:38 February 01

Given clear glide path for deficit management: FM

"We have made government accounts more transparent. We are absolutely upfront with fiscal deficit. We not only ensured repeated review of capital expenditure and ensured that spending was encouraged and not delayed. Our fiscal deficit which started at 3.5 per cent during February 2020 has increased to 9.5 per cent of the GDP, so we have spent, we have spent and we have spent," Sitharaman said.

"At the same time, we have given a clear glide path for deficit management," she added.

15:31 February 01

'Agri-Infra cess through restructuring, consumers won't have to pay more'

"Agriculture has received emphasis in Budget 2021. Allocation for credit flow through NABARD has increased," Finance Minister Nirmala Sitharaman said.

"We are bringing in Agriculture Infrastructure Development Cess through restructuring, without consumers having to pay more," she added.

Sitharaman clarified that the new Agri Infra Cess will not result in price increase for end users, as the higher cess will be adjusted with lower customs duty.

15:26 February 01

Chose to spend big on infra: FM

Addressing her post-Budget press conference, Finance Minister Nirmala Sitharaman said the 37 per cent increase in capital expenditure (Rs 5.45 lakh crore), is a big increase for infrastructure and health.

"We chose to spend big on infrastructure across a wide variety of sectors. We have attended to the needs of the health sector. Capacity building in health has been given a big place," she said.

14:55 February 01

Nirmala Sitharaman post-budget press conference

New Delhi: Finance Minister Nirmala Sitharaman on Monday proposed more than doubling of healthcare spending while imposing a new agri cess on certain imported goods and raising customs duty on items ranging from cotton to electronics in a bid to pull the economy out of the trough.

In her Budget for the fiscal year beginning April 1, she restricted tax-free interest on retirement fund to Rs 2.5 lakh annually but gave tax exemption on Leave Travel Concession subject to incurring of specified expenditure.

A new Agriculture Infrastructure and Development Cess will be imposed from Tuesday on customs duty levied on bullion, alcoholic beverages, coal and agri products ranging from apple to lentil.

But to reduce the burden on consumer, customs or import duty on these items was cut.

A cess of Rs 2.5 per litre on petrol and Rs 4 per litre on diesel was also slapped but this was offset by a reduction of an equivalent amount in the excise duty - making it price neutral for consumers.

Also, a tax deducted at source (TDS) of 0.1 per cent will be levied on purchase of goods exceeding Rs 50 lakh in a year. The responsibility of deduction shall lie only on the persons whose turnover exceeds Rs 10 crore.

Read:Budget 2021: Govt puts spotlight on health, infra, disinvestment

In a relief to senior citizens, those above 75 years of age with only pension and interest income would no longer have to file income tax returns.

In order to incentivise the purchase of affordable house, the finance minister proposed to extend the period for claiming an additional deduction for the interest of Rs 1.5 lakh paid for home loans by one year to March 31, 2022.

To remove hardship faced by NRIs in respect of their income accrued on foreign retirement benefits account due to mismatch in taxation, new rules for alignment will be notified.

Foreign direct investment (FDI) limit in insurance was proposed to be raised to 74 per cent from the current 49 per cent.

In order to provide relief to taxpayers, advance-tax liability on dividend income shall arise only after the declaration/payment of dividend.

The dividend paid to Real Estate Infrastructure Trusts or Infrastructure Investment Trusts (REIT/InvIT) shall be exempt from TDS.

Tax holiday for start-ups has also been extended by one year to March 31, 2022.

The time-limit for re-opening of income tax assessment has been reduced to 3 years from the current 6 years. Re-opening up to 10 years is proposed to be allowed only if there is evidence of undisclosed income of Rs 50 lakh or more for a year.

Read:Budget proposes up to Rs 4/litre cess on petrol, diesel

In her budget speech in the Lok Sabha, Sitharaman projected a fiscal deficit of 6.8 per cent of gross domestic product for the next 2021-22 fiscal. The current year was expected to end with a deficit of 9.5 per cent as against a target of 3.5 per cent.

With about 1 per cent spending of GDP on health, she proposed raising of the spending to Rs 2.2 lakh crore to help improve health systems as well as fund vaccination drive against coronavirus.

By the end of the current fiscal on March 31, the government would spend Rs 94,452 crore.

"The investment on health infrastructure in this budget has increased substantially," she said.

Customs duty on cotton, silk, maize bran, certain gems and jewellery, specified auto parts, screws and nuts was hiked.

To promote value addition in the electronics sector, the same for printed circuit board assembly, wires and cables, solar inverters and solar lamps were also raised.

The import duty on naphtha, iron and steel melting scrap, aircraft components, gold and silver was reduced.

She also allocated Rs 20,000 crore to recapitalise state-run banks that are saddled with bad loans and have been a drag on growth.

The revenue target from privatisation of PSUs was put at Rs 1.75 lakh crore with a planned initial public offering (IPO) of Life Insurance Corporation (LIC) among the state-run companies that will be sold in the next fiscal. 

(PTI Report)