Daily Prelims Notes 2 February 2021

Daily Prelims Notes

2 February 2021

By

Santosh Sir

All 6 CSE Prelims Qualified

4 CSE Mains Qualified

If I can do it, you can too

UNION BUDGET SPECIAL

• Union Budget of India is the country’s comprehensive Annual Financial Statement.
• The Union Budget consists of a detailed account of the government’s finances, its revenues from various sources and expenditures to be incurred on different activities that it will incur.
• As mentioned in Article 112 of the Indian Constitution, the Union Government lays a statement of its estimated receipts and expenditure for that year, From April 1 to March 31, before both the Houses of Parliament.
• The term “budget” is not mentioned in the Constitution.

BUDGET HIGHLIGHTS 2020 – 21

The Union Minister for Finance & Corporate Affairs, Smt Nirmala Sitharaman presented the Union Budget 2021-22 in Parliament today, which is the first budget of this new decade and also a digital one in the backdrop of unprecedented COVID-19 crisis. Laying a vision for AatmaNirbhar Bharat, she said this is an expression of 130 crore Indians who have full confidence in their capabilities and skills. She said that Budget proposals will further strengthen the Sankalp of Nation First, Doubling Farmer’s Income, Strong Infrastructure, Healthy India, Good Governance, Opportunities for youth, Education for All, Women Empowerment, and Inclusive Development among others.

The Budget proposals for 2021-22 rest on 6 pillars.

1. Health and Wellbeing
2. Physical and Financial Capital and Infrastructure
3. Inclusive Development for Aspirational India
4. Reinvigorating Human Capital
5. Innovation and R&D
6. Minimum Government and Maximum Governance

1. Health and Wellbeing

• There is substantial increase in investment in Health Infrastructure and the Budget outlay for Health and Wellbeing is Rs 2,23,846 crore in BE 2021-22 as against this year’s BE of Rs 94,452 crore, an increase of 137 percentage.
• The Finance Minister announced that a new centrally sponsored scheme, PM Aatma Nirbhar Swasth Bharat Yojana, will be launched with an outlay of about Rs 64, 180 crore over 6 years.

PM Atmanirbhar Swasth Bharat Yojana

• The PM Atmanirbhar Swasth Bharat Yojana will develop the capacities of primary, secondary and tertiary care health systems, strengthen existing institutions and create new institutions to cater to detection and cure of new and emerging diseases. This scheme will be in additions to National Health Mission (NHM).
• The scheme will support 17,000 rural and 11,000 urban health and wellness centres, and help set up integrated public health labs in all districts and 3,382 block public health units in 11 states. The fund for the scheme will also be used for establishing critical care hospital blocks in 602 districts and 12 central institutions.
• The PM Atmanirbhar Swasth Bharat Yojana will oversee strengthening of the National Centre for Disease Control (NCDC), its 5 regional branches and 20 metropolitan health surveillance units. Under the initiatve Integrated Health Information Portal will be expanded to all states and UTs to connect all public health labs.
• The government will also operationalise 17 new public health units and strengthen 33 existing public health units at Points of Entry, which include 32 airports, 11 seaports and 7 land crossings.
• As part of PM Atmanirbhar Swasth Bharat Yojana, Centre will also set up 15 health emergency operation centers and 2 mobile hospitals. It will also establish a national institution for One Health, a Regional Research Platform for WHO South East Asia Region, 9 Bio-Safety Level III laboratories and 4 regional National Institutes for Virology.

Vaccines

• Provision of Rs 35,000 crore made for Covid-19 vaccine in BE 2021-22.
• The Pneumococcal Vaccine, a Made in India product, presently limited to only 5 states, will be rolled out across the country aimed at averting 50,000 child deaths annually.

Pneumococcal Vaccine

• SII’s pneumococcal vaccine is developed through a collaboration spanning over a decade with the health organisation PATH and the Bill and Melinda Gates Foundation.
• Based on the trials, Pneumosil was licensed by the Drugs Controller General (India) in July 2020.
• The vaccine also makes SII the world’s third supplier of the pneumococcal conjugate vaccine (PCV) and the first developing country vaccine manufacturer to access the global PCV market.
• It targets the pneumococcal bacterium, which causes pneumonia and other serious life-threatening diseases such as meningitis and sepsis, and is estimated to cause nearly four lakh deaths in children under five years of age each year worldwide.

Nutrition

• Government will merge the Supplementary Nutrition Programme and the PoshanAbhiyan and launch the Mission Poshan 2.0. Government will adopt an intensified strategy to improve nutritional outcomes across 112 Aspirational Districts.
• Poshan 2.0 now combines the Integrated Child Development Services (ICDS), Anganwadi services, PoshanAbhiyan, Scheme For Adolescent Girls and National Creche Scheme.

Universal Coverage of Water Supply and Swachch Bharat Mission

• The Finance Minister announced that the Jal Jeevan Mission (Urban), will be launched for universal water supply in all 4,378 Urban Local Bodies with 2.86 crore household tap connections, as well as liquid waste management in 500 AMRUT cities.
• It will be implemented over 5 years, with an outlay of Rs. 2,87,000 crore. Moreover, the Urban Swachh Bharat Mission will be implemented with a total financial allocation of Rs 1,41,678 crore over a period of 5 years from 2021-2026.
• Also to tackle the burgeoning problem of air pollution, government proposed to provide an amount of Rs. 2,217 crore for 42 urban centres with a million-plus population in this budget.
• A voluntary vehicle scrapping policy to phase out old and unfit vehicles was also announced.

Vehicle Scrapping Policy

• The new policy will help in encouraging the fuel-efficient and environment-friendly vehicles.
• Thus, it will reduce the vehicular pollution and cut the India’s huge oil import bills.
• As per the proposed Vehicle Scrappage Policy, if any vehicle fails the fitness test more than thrice, it will be subjected to mandatory scrapping.
• However, the government is yet to roll out the final scrappage policy.
• The voluntary scrappage policy will be based on fitness tests.
• Life has been set at 20 years in case of private vehicles while 15 years have been set for commercial vehicles.

Background

• This announcement by the government has made just after government’s announcement of a scrappage policy for vehicles that are used by its various departments and public sector undertakings (PSUs).
• The Ministry of Road Transport and Highways (MoRTH) also approved the vehicle scrappage policy recently for vehicles older than 15 years and that are owned by the government and PSUs.
• This policy would apply to central and state government-owned vehicles from April 1, 2022.

2. Physical and Financial Capital and Infrastructure

• Finance Minister said that for a USD 5 trillion economy, our manufacturing sector has to grow in double digits on a sustained basis.
• To achieve the above, PLI schemes to create manufacturing global champions for an AatmaNirbhar Bharat have been announced for 13 sectors. For this, the government has committed nearly Rs.1.97 lakh crore in the next 5 years starting FY 2021-22.

Production Linked Incentive Scheme

• Production linked incentive scheme that aims to give companies incentives on incremental sales from products manufactured in domestic units.
• Apart from inviting foreign companies to set shop in India, the scheme also aims to encourage local companies to set up or expand existing manufacturing units.
• So far, the scheme has been rolled out for mobile and allied equipment as well as pharmaceutical ingredients and medical devices manufacturing.
• These sectors are labour intensive and are likely, and the hope is that they would create new jobs for the ballooning employable workforce of India.
• Need of Scheme:
• The idea of PLI is important as the government cannot continue making investments in these capital intensive sectors as they need longer times for start giving the returns.
• Instead, what it can do is to invite global companies with adequate capital to set up capacities in India.
• To make India more compliant with our WTO commitments and also make it non-discriminatory and neutral with respect to domestic sales and exports.
• Apart from cutting down on imports, the PLI scheme also looks to capture the growing demand in the domestic market.

Textiles

• Similarly, to enable the textile industry to become globally competitive, attract large investments and boost employment generation, a scheme of Mega Investment Textiles Parks (MITRA) will be launched in addition to the PLI scheme.

 Mega Investment Textiles Parks (MITRA)

• Under this scheme, 7 mega investment textile parks will be set up over the three years.
• These parks will span across 1,000 acres of land and have quality infrastructure and plug-and-play facilities.
• The objectives are to make the Indian textile industry globally competitive, boost exports and investments and generate employment.

Infrastructure

• The National Infrastructure Pipeline (NIP) now expanded to 7,400 projects. Around 217 projects worth Rs 1.10 lakh crore under some key infrastructure Ministries have been completed.

National Infrastructure Pipeline (NIP)

NIP was announced in union budget in 2019-20 for an outlay of Rs 100 lakh Crore for infrastructure projects over the next 5 years.

• NIP is a first-of-its-kind initiative to provide world-class infrastructure across the country and improve the quality of life for all citizens.
• It will improve project preparation, attract investments (both domestic & foreign) into infrastructure, and will be crucial for attaining the target of becoming a $5 trillion economy by FY 2025.
• Covers both economic and social infrastructure projects.
• Atanu Chakraborty Report :
• The task force headed by Atanu Chakraborty on National Infrastructure Pipeline (NIP), in May 2020, submitted its final report to the Finance Minister. It has recommended the following ,
• Investment needed: ₹111 lakh crore over the next five years (2020-2025) to build infrastructure projects and drive economic growth.
• Energy, roads, railways and urban projects are estimated to account for the bulk of projects (around 70%).
• The centre (39 percent) and state (40 percent) are expected to have an almost equal sharein implementing the projects, while the private sector has 21 percent share.

Infrastructure financing – Development Financial Institution (DFI)

• Accordingly, a Bill to set up a DFI will be introduced. Government has provided a sum of Rs 20,000 crore to capitalise this institution and the ambition is to have a lending portfolio of at least Rs 5 lakh crore for this DFI in three years time.

Asset Monetisation

• Monetizing operating public infrastructure assets is a very important financing option for new infrastructure construction.
• A “National Monetization Pipeline” of potential Brownfield infrastructure assets will be launched.
• An Asset Monetization dashboard will also be created for tracking the progress and to provide visibility to investors. Some important measures in the direction of monetisation are:

1. National Highways Authority of India and PGCIL each have sponsored one InvIT that will attract international and domestic institutional investors.
2. Railways will monetize Dedicated Freight Corridor assets for operations and maintenance, after commissioning.
3. The next lot of Airports will be monetised for operations and management concession.
4. Other core infrastructure assets that will be rolled out under the Asset Monetization Programme are: (i) NHAI Operational Toll Roads (ii) Transmission Assets of PGCIL (iii) Oil and Gas Pipelines of GAIL, IOCL and HPCL (iv) AAI Airports in Tier II and III cities, (v) Other Railway Infrastructure Assets (vi) Warehousing Assets of CPSEs such as Central Warehousing Corporation and NAFED among others and (vii) Sports Stadiums.

Green field investment

• It refers to investment in a manufacturing, office, or other physical company-related structure or group of structures in an area where no previous facilities exist.

Brownfield investment

• Used for purchasing or leasing existing production facilities to launch a new production activity.

Roads and Highways Infrastructure

• Finance Minister announced that more than 13,000 km length of roads, at a cost of Rs 3.3 lakh crore, has already been awarded under the Rs. 5.35 lakh crore Bharatmala Pariyojana project of which 3,800 kms have been constructed.
• By March 2022, Government would be awarding another 8,500 kms and complete an additional 11,000 kms of national highway corridors.
• To further augment road infrastructure, more economic corridors are also being planned. She also provided an enhanced outlay of Rs. 1,18,101 lakh crore for Ministry of Road Transport and Highways, of which Rs.1,08,230 crore is for capital, the highest ever.

Railway Infrastructure

• Indian Railways have prepared a National Rail Plan for India – 2030. The Plan is to create a ‘future ready’ Railway system by 2030.
• Bringing down the logistic costs for our industry is at the core of our strategy to enable ‘Make in India’. It is expected that Western Dedicated Freight Corridor (DFC) and Eastern DFC will be commissioned by June 2022.
• For Passenger convenience and safety the following measures are proposed:

1. Introduction of aesthetically designed Vista Dome LHB coach on tourist routes to give a better travel experience to passengers.
2. Indian railways will be provided with an indigenously developed automatic train protection system that eliminates train collision due to human error.
3. Budget also provided a record sum of Rs. 1,10,055 crore, for Railways of which Rs. 1,07,100 crore is for capital expenditure.

Urban Infrastructure

• A new scheme will be launched at a cost of Rs. 18,000 crore to support augmentation of public bus transport services.
• Two new technologies e., ‘MetroLite’ and ‘MetroNeo’ will be deployed to provide metro rail systems at much lesser cost with same experience, convenience and safety in Tier-2 cities and peripheral areas of Tier-1 cities.

“Metro Neo” 

• It is a rail-guided urban transport system with rubber-tyred electric coaches powered by an overhead traction system running on elevated or at-grade sections. The light transit system, which costs about 20-25% of a Metro and also has lower maintenance costs.

Power Infrastructure

• Finance Minister proposed to launch a revamped reforms-based result-linked power distribution sector scheme with an outlay of Rs. 3,05,984 crore over 5 years.
• The scheme will provide assistance to DISCOMS for Infrastructure creation including pre-paid smart metering and feeder separation, upgradation of systems, etc., tied to financial improvements.

Ports, Shipping, Waterways

• The budget proposes to offer more than Rs. 2,000 crore by Major Ports on Public Private Partnership mode in FY21-22.
• A scheme to promote flagging of merchant ships in India will be launched by providing subsidy support to Indian shipping companies in global tenders floated by Ministries and CPSEs. An amount of Rs. 1624 crore will be provided over 5 years.

Petroleum & Natural Gas

• Ujjwala Scheme which has benefited 8 crore households will be extended to cover 1 crore more beneficiaries.
• Government will add 100 more districts in next 3 years to the City Gas Distribution network.
• A gas pipeline project will be taken up in Union Territory of Jammu & Kashmir.
• An independent Gas Transport System Operator will be set up for facilitation and coordination of booking of common carrier capacity in all-natural gas pipelines on a non-discriminatory open access basis.

Pradhan Mantri Ujjwala Yojana:

• Aim: To provide LPG (liquefied petroleum gas) connections to poor households.
• Goal: A deposit-free LPG connection is given to eligible with financial assistance of Rs 1,600 per connection by the Centre.

Eligibility criteria:

• Applicant must a woman above the age of 18 and a citizen of India.
• Applicant should belong to a BPL (Below Poverty Line) household.
• No one in the applicant’s household should own an LPG connection.
• The household income of the family, per month, must not exceed a certain limit as defined by the government of the Union Territories and State Government.
• The name of the applicant must be in the list of SECC-2011 data and should match with the information available in the BPL database that Oil Marketing Companies have.
• Applicant must not be a recipient of other similar schemes provided by the government.

Financial Capital

• The Finance Minister proposed to consolidate the provisions of SEBI Act, 1992, Depositories Act, 1996, Securities Contracts (Regulation) Act, 1956 and Government Securities Act, 2007 into a rationalized Single Securities Markets Code.
• The Government would support the development of a world class Fin-Tech hub at the GIFT-IFSC.
• Finance Minister Nirmala Sitharaman has increased the responsibility of the Securities and Exchange Board of India (SEBI) by appointing it as regulator for the Gold Spot Exchange. The recommendation to nominate SEBI in this role also came from the National Institute for Transforming India.
• For warehousing purposes, the government has appointed Warehousing Development and Regulatory Authority (WDRA) as the regulator.
• The government says WDRA will be strengthened to set up a commodity market ecosystem arrangement, including vaulting, assaying and logistics,  in addition to warehousing for agriculture commodity contracts.

Spot Exchange in India

• In India, Spot Exchanges refer to electronic trading platforms which facilitate purchase and sale of specified commodities, including agricultural commodities, metals and bullion by providing spot delivery contracts in these commodities.
• This market segment functions like the equity segment in the main stock exchanges. Alternatively, this can be considered as a guaranteed direct marketing by sellers of the commodities.
• Spot Exchanges leverage on the latest technology available in the stock exchange framework for the trading of goods.
• This is an innovative Indian experiment in the trading of goods and is distinct from what is commonly known as “commodity exchanges” which trade in futures contracts in commodities.
• The facilities provided by the spot exchange, like a normal stock exchange, include clearing and settlement of trades on multilateral netting
• Trades are settled on guaranteed basis (i.e., in case of default by any person exchange arranges for the payment of money / good) and the exchange collects various margin payments, to ensure this. The exchange also offers various other services such as quality certification, warehousing, warehouse receiptfinancing, etc.

Increasing FDI in Insurance Sector

• Budget proposed to amend the Insurance Act, 1938 to increase the permissible FDI limit from 49% to 74% and allow foreign ownership and control with safeguards.
• Under the new structure, the majority of Directors on the Board and key management persons would be resident Indians, with at least 50% of Directors being Independent Directors, and specified percentage of profits being retained as general reserve.

Disinvestment and Strategic Sale

• In spite of COVID-19, Government has kept working towards strategic disinvestment. The Finance Minister said a number of transactions namely BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, NeelachalIspat Nigam limited among others would be completed in 2021-22.
• Other than IDBI Bank, Government propose to take up the privatization of two Public Sector Banks and one General Insurance company in the year 2021-22.
• In 2021-22, Government would also bring the IPO of LIC for which the requisite amendments will be made in this Session itself.

Strategic Disinvestment Policy

• Strategic disinvestment is the transfer of the ownership and control of a public sector entity to some other entity (mostly to a private sector entity). Unlike the simple disinvestment, strategic sale implies a kind of privatization.
• The policy provides a clear roadmap for disinvestment in all non-strategic and strategic sectors. Government has kept four areas that are strategic where bare minimum CPSEs will be maintained and rest privatized.
• In the non-strategic sectors, CPSEs will be privatised, otherwise shall be closed. She said that to fast forward the disinvestment policy, NITI Aayog will work out on the next list of Central Public Sector companies that would be taken up for strategic disinvestment.
• Government has estimated Rs. 1,75,000 crore as receipts from disinvestment in BE 2020-21 .

 Strategic Sector PSUs are:

• Arms & Ammunition of defence equipment
• Defence aircraft & warships
• Atomic energy
• Applications of radiation to agriculture, medicine and non-strategic industry
• Railways

Roads and Highways Infrastructure

• Finance Minister announced that more than 13,000 km length of roads, at a cost of Rs 3.3 lakh crore, has already been awarded under Bharatmala Pariyojana project of which 3,800 kms have been constructed.
• By March 2022, Government would be awarding another 8,500 kms and complete an additional 11,000 kms of national highway corridors.
• Enhanced outlay of Rs. 1,18,101 lakh crore for Ministry of Road Transport and Highways, of which Rs.1,08,230 crore is for capital Expenditure.

Bharatmala Pariyojana 

• It is a centrally-sponsored and funded Road and Highways project of the Government of India.
• The total investment for 83,677 km (51,994 mi) committed new highways is estimated at ₹5.35 lakh crore (US$75 billion), making it the single largest outlay for a government road construction scheme.

3. Inclusive Development for Aspirational India

Agriculture

• The MSP regime has undergone a sea change to assure price that is at least 1.5 times the cost of production across all commodities. The procurement has also continued to increase at a steady pace. This has resulted in increase in payment to farmers substantially.
• Early this year, Honourable Prime Minister had launched SWAMITVA Scheme. Under this, a record of rights is being given to property owners in villages. Up till now, about 1.80 lakh property-owners in 1,241 villages have been provided cards and the Finance Minister proposed during FY21-22 to extend this to cover all states/UTs.
• Allocation to the Rural Infrastructure Development Fund increased from Rs. 30,000 crore to Rs. 40,000 crore. The Micro Irrigation Fund, with a corpus of Rs.5,000 crore has been created under NABARD will be doubled.
• The scope of ‘Operation Green Scheme’ that is presently applicable to tomatoes, onions, and potatoes, will be enlarged to include 22 perishable products.
• Keeping in view the transparency and competitiveness that e-NAM has brought into the agricultural market, 1,000 more mandis will be integrated with e-NAM. The Agriculture Infrastructure Funds would be made available to APMCs for augmenting their infrastructure facilities.

Swamitva Scheme

• Swamitva Scheme is an ownership plan scheme that will record and decide the ownership of land in rural residential areas. The scheme will make use of drones and other modern technology to record the land areas.

Features

• Scheme was launched under the Union Ministry of Panchayati Raj.
• The scheme is to address the issue of many villagers having no record or documental proof for their land holdings.
• Drones will be used to measure the residential areas to prevent disputes.
• Google mapping will also be used under this scheme for assessment.
• This will enable better tax collection from these lands. The revenue collected is to go into rural infrastructure development.

Operation Green

• It is a price fixation scheme that aims to ensure farmers are given the right price for their produce.(Reduces Price Volatility)
• It aims to promote Farmer Producers Organizations (FPO), Agri-logistics, processing facilities and professional management of agri-produce.
• It focuses on organized marketing of Tomatoes, Onions and Potatoes (TOP vegetables) by connecting farmers with consumers.
• State Agriculture and other Marketing Federations, Farmer Producer Organizations (FPO), cooperatives, companies, Self-help groups, food processors etc. can avail the financial assistance under it.

Fisheries

• Finance Minister proposed substantial investments in the development of modern fishing harbours and fish landing centres.
• To start with, 5 major fishing harbours – Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat – will be developed as hubs of economic activity.

Migrant Workers and Labourers

• Government has launched the One Nation One Ration Card scheme through which beneficiaries can claim their rations anywhere in the country.
• One Nation One Ration Card plan is under implementation by 32 states and UTs, reaching about 69 crore beneficiaries – that’s a total of 86% beneficiaries covered. The remaining 4 states and UTs will be integrated in the next few months.
• Government proposes to conclude a process that began 20 years ago, with the implementation of the 4 labour codes.
• For the first time globally, social security benefits will extend to gig and platform workers. Minimum wages will apply to all categories of workers, and they will all be covered by the Employees State Insurance Corporation.
• Women will be allowed to work in all categories and also in the night-shifts with adequate protection. At the same time, compliance burden on employers will be reduced with single registration and licensing, and online returns.

One Nation One Ration Card Scheme

• Under the scheme a beneficiary will be able to avail benefits across the country using a single ration card across all PDS shops in the country.
• The scheme will also allow portability of food security benefits.
• It was launched in January 2020  in 12 states.

Highlights of the scheme:

• In this system, eligible beneficiaries would be able to avail entitled food grains under the National Food Security Act (NFSA) from any Fair Price Shop(FPSs) in the country using the same ration card.
• The eligible beneficiaries will be able to buy subsidized food grains, rice at ₹3 per kg, wheat at ₹2 per kg, and coarse grains at Re 1 per kg, from anywhere in the country.
• 100 percent of national portability of these cards has been assured by March 31, 2021.
• The new system is based on a technological solution to identify a beneficiary through biometric authentication on electronic Point of Sale (ePoS) devices installed at the FPS’s.
• The Integrated Management of Public Distribution System (IM-PDS) portal provides the technological platform for the inter-state portability of ration cards.
• A standard format for ration cards has been prepared after taking into account the format used by different states and it has been advised that ration cards be issued in a bi-lingual format having Hindi or English apart from the local language.

Financial Inclusion

• To further facilitate credit flow under the scheme of Stand Up India for SCs, STs, and women, the Finance Minister proposed to reduce the margin money requirement from 25% to 15%, and to also include loans for activities allied to agriculture.
• Moreover, a number of steps were taken to support the MSME sector and in this Budget, Government has provided Rs. 15,700 crore to this sector – more than double of this year’s BE.

Stand Up IndiaScheme

• Stand up India is a scheme that empowers SC, ST, and women entrepreneurs to enable their enterprises by helping them to approach a loan from banks for the same.
• It has targeted to create 2.5 lakhs such as entrepreneurs across the country.

Key Features

• Stand Up India, provides composite loans between Rs 10 lakhs and Rs 1 crore to at least one scheduled caste (SC) or a scheduled tribe (ST) borrower, and at least one woman borrower per bank branch for building up a Greenfield enterprise (A Greenfield project is one which is not constrained by prior work.)
• Under the scheme, 1.25 lakh bank branches will provide loans up to Rs 1 crore.
• Under the scheme, the borrowers will get support such as pre-loan training, facilitating the loan, factoring, and marketing.
• Refinance window through Small Industries Development Bank of India (SIDBI) with an initial amount of 10,000 crore rupees.
• Debit Card (RuPay) for withdrawal of working capital.
• Creation of an entity of 5,000 crore rupees for credit guarantee through National Credit Guarantee Trustee (NCGTC).
• Web portal for online registrations and other particulars.

4. Reinvigorating Human Capital

• The Finance Minister said that the National Education Policy (NEP) announced recently has had good reception, while adding that more than 15,000 schools will be qualitatively strengthened to include all components of the National Education Policy.
• She also announced that 100 new Sainik Schools will be set up in partnership with NGOs/private schools/states.
• She also proposed to set up a Higher Education Commission of India, as an umbrella body having 4 separate vehicles for standard-setting, accreditation, regulation, and funding.
• For accessible higher education in Ladakh, Government proposed to set up a Central University in Leh.

Scheduled Castes and Scheduled Tribes Welfare

• Government has set a target of establishing 750 Eklavya model residential schools in tribal areas with increase in unit cost of each such school from Rs. 20 crore to Rs. 38 crore, and for hilly and difficult areas, to Rs. 48 crore.
• Similarly, under the revamped Post Matric Scholarship Scheme for the welfare of Scheduled Castes, the Central Assistance was enhanced and allocated Rs. 35,219 crore for 6 years till 2025-2026, to benefit 4 crore SC students.

Skilling

• An initiative is underway, in partnership with the United Arab Emirates (UAE), to benchmark skill qualifications, assessment, and certification, accompanied by the deployment of certified workforce.
• The Government also has a collaborative Training Inter Training Programme (TITP) between India and Japan to facilitate transfer of Japanese industrial and vocational skills, technique, and knowledge and the same would be taken forward with many more countries.

Higher Education Commission of India (HECI)

• Higher Education Commission of India (HECI) will be set up as a single overarching umbrella body for the entire higher education, excluding medical and legal education.
• The HECI will have four independent verticals – National Higher Education Regulatory Council (NHERC) primarily for regulation, General Education Council (GEC) for standard setting, learning outcomes, and a National Higher Education Qualification Framework (NHEQF) will be formulated by the GEC.
• There will be Higher Education Grants Council (HEGC) for funding. It will be entrusted with the disbursement of scholarships and developmental funds for launching new focus areas and expanding quality programme offerings at HEIs across disciplines and fields.
• Another component will be National Accreditation Council (NAC) for accreditation, which will be ‘meta-accrediting body’.

Eklavya Model Residential Schools

• As per revised 2018 scheme, every block with more than 50% ST population and at least 20,000 tribal persons, will have an EMRS by the year 2022.
• These schools will be on par with NavodayaVidyalayas and will have special facilities for preserving local art and culture besides providing training in sports and skill development.

Features of EMRS

• Admission to these schools will be through selection/competition with suitable provision for preference to children belonging to Primitive Tribal Groups, first-generation students, etc.
• Sufficient land would be given by the State Government for the school, playgrounds, hostels, residential quarters, etc., free of cost.
• The number of seats for boys and girls will be equal.
• In these schools, education will be entirely free.

Sainik Schools 

• The Sainik Schools are a system of schools in India established and managed by the Sainik Schools Society under Ministry of Defence.
• They were conceived in 1961 by V. K. Krishna Menon, the then Defence Minister of India, to rectify the regional and class imbalance amongst the Officer cadre of the Indian Military, and to prepare students mentally and physically for entry into the National Defence Academy (NDA), Khadakwasla,  Pune and Indian Naval Academy (INA),Kerala.
• Today there are 33 such schools running and proposed for future covering all the states of the country.
• The schools come under the purview of respective state governments and Ministry of Defence.

5. Innovation and R&D

• National Research Foundation (NRF) to get an outlay of Rs 50,000 crore over five years to strengthen research and focus on the national priority trust area
• Government will undertake a new initiative – NationalLanguage Translation Mission (NTLM).
• The New Space India Limited (NSIL), a PSU under the Department of Space will execute the PSLV-CS51 launch, carrying the Amazonia Satellite from Brazil, along with a few smaller Indian satellites.
• As part of the Gaganyaan mission activities, four Indian astronauts are being trained on Generic Space Flight aspects, in Russia. The first unmanned launch is slated for December 2021.

 National Language translation mission

• National Language translation mission aims to translate policy-related information that will be available on the internet in major regional languages.
• This is in line with the National Education Policy (NEP) 2020, which emphasises creating content and delivery of content in regional languages.

National Research Foundation

• It is being set up as an autonomous body under the New Education Policy
• The NRF aims to fund researchers working across streams in India.
• Considered to be one of the biggest announcements under NEP, it will look after funding, mentoring, and building ‘quality of research’ in India.
• With this, the funds available with all Ministries have been integrated in NRF and would be adequately supplemented with additional funds.
• In order to bring non-science disciplines of research in its ambit, NRF will fund research projects across four major disciplines –Sciences; Technology; Social Sciences; and Arts and Humanities

6. Minimum Government and Maximum Governance

• Government has introduced the National Commission for Allied Healthcare Professionals Bill in Parliament, with a view to ensure transparent and efficient regulation of the 56 allied healthcare professions.
• She also announced that the forthcoming Census could be the first digital census in the history of India and for this monumental and milestone-marking task, Rs. 3,768 crore allocated in the year 2021-2022.
• The Finance Minister said fiscal deficit in RE 2020-21 is pegged at 9.5% of GDP and it has been funded through Government borrowings, multilateral borrowings, Small Saving Funds and short term borrowings.
• She added that the Government would need another Rs 80,000 crore for which it would be approaching the markets in these 2 months.
• The fiscal deficit in BE 2021-2022 is estimated to be 6.8% of GDP. The gross borrowing from the market for the next year would be around 12 lakh crore.
• SmtSitharaman announced that the Government plan to continue the path of fiscal consolidation, and intend to reach a fiscal deficit level below 4.5% of GDP by 2025-2026 with a fairly steady decline over the period.
• In accordance with the views of the 15th Finance Commission, Government is allowing a normal ceiling of net borrowing for the states at 4% of GSDP for the year 2021-2022.
• The FRBM Act mandates fiscal deficit of 3% of GDP to be achieved by 31st March 2020-2021.
• The effect of this year’s unforeseen and unprecedented circumstances has necessitated the submission of a deviation statement under Sections 4 (5) and 7 (3) (b) of the FRBM Act which the Finance Minister laid on the Table of the House as part of the FRBM Documents.
• On 9th December 2020, the 15th Finance Commission submitted its final report, covering the period 2021-2026.
• The Government has laid the Commission’s report, along with the explanatory memorandum retaining the vertical shares of the states at 41%. On the Commission’s recommendation, the Budget provided Rs. 1,18,452 crore as revenue deficit grant to 17 states in 2021-22.

PART-B

In Part B of the Budget Speech, the Union Minister Smt. Nirmala Sitharaman seeks to further simplify the Tax Administration, Litigation Management and ease the compliance of Direct Tax Administration. The indirect proposal focuses on custom duty rationalization as well as rationalization of procedures and easing of compliance.

DIRECT TAX PROPOSALS

• The Finance Minister provided relief to senior citizens in filing of income tax returns, reduced time limit for income tax proceedings announced setting up of the Dispute Resolution Committee, faceless ITAT, relaxation to NRIs, increase in exemption limit from audit and relief for dividend income.
• She also announced steps to attract foreign investment into infrastructure, relief to affordable housing and rental housing, tax incentives to IFSC, relief to small charitable trusts, and steps for incentivizing Start-ups in the country.
• The Budget seeks to reduce compliance burden on senior citizens who are of 75 years of age and above. Such senior citizens having only pension and interest income will be exempted from filing their income tax return.
• The paying Bank will deduct the necessary tax on their income. The Budget proposes to notify rules for removing the hardship of non-Resident Indians returning to India on the issue of their accrued incomes in their foreign retirement account.
• The Budget proposes to make dividend payment to REIT/InvIT exempt from TDS.
• For Foreign Portfolio Investors, the Budget proposes deduction of tax on dividend income at lower treaty rate. The Budget provides that advanced tax liability on dividend income shall arise only after the declaration or payment of dividend.
• The Minister said that this was being done as the amount of dividend income cannot be estimated correctly by the shareholders for paying advance tax.
• The Finance Minister proposed to extend the eligibility period for claim of additional deduction for interest of Rs. 1.5 lakh paid for loan taken for purchase of an affordable house to 31st March, 2022
• In order to incentivize start ups in the country, Smt. Sitharaman announced extension in the eligibility for claiming tax holiday for start ups by one more year till 31st March, 2022.
• In order to incentivize funding of start ups, she proposed extending the Capital Gains exemption for investment in start ups by one more year till 31st March, 2022.
• Finance Minister said that the Direct Tax Vivad se Vishwas Scheme announced by the Government has been received well. Until 30th January, 2021, over one lakh ten thousand tax payers have opted to settle tax dispute of over Rs. 85 thousand crores under the Scheme.
• To further reduce litigation of small tax payers, she proposed to constitute a Dispute Resolution Committee. Anyone with a taxable income uptoRs. 50 lakh and disputed income uptoRs. 10 lakh shall be eligible to approach the Committee.
• She also announced setting up of National Faceless Income Tax Appellate Tibunal Centre.
• Budget proposes to increase the limit for tax audit for persons who are undertaking 95 per cent of their transaction digitally from Rs. 5 Crore to Rs. 10 Crore.
• In order to allow funding of infrastructure by issue of zero coupon bonds, the Budget proposes to make notified infrastructure debt funds eligible to raise funds by issuing tax efficient zero coupon bonds.
• In order to promote International Financial Services Centre (IFSC) in GIFT City, the Budget proposes more tax incentives.

Vivad se Vishwas Scheme 

• The vivad se vishwas scheme was announced by Union Finance Minister Nirmala Sitharaman during her budget speech on February 1, 2020. The scheme aims to settle the huge number of pending direct tax cases.
• The amnesty scheme, at present, covers disputes pending at the level of commissioner (appeals), Income Tax Appellate Tribunals (ITAT), high courts, the Supreme Court and those in international arbitration.
• It offers a complete waiver on interest and penalty to the taxpayers who pay their pending taxes.
• The scheme aims to benefit those whose tax demands are locked in dispute in multiple forums.

INVIT & REIT

• Infrastructure investment trusts (InvIT) are investment trusts designed to pool small sums of money from a number of investors to invest in assets that give cash flow over a period of time. They are similar to REIT but invest in infrastructure projects such as roads or highways which take some time to generate steady cash flows.
• Real Estate Investment Trust (REIT) is an investment vehicle that owns & manages investment grade and income-producing real estates properties such as offices, malls, industrial parks, warehouses, hospitality, healthcare centers, and almost any asset that can produce an annuity revenue stream

National Faceless Assessment Scheme

• The government’s faceless tax assessment scheme, an attempt to remove individual tax officials’ discretion and potential harassment for income tax payers, has managed to deliver about 24,000 final orders since its introduction in August 2020.
• It is an attempt to remove individual tax officials’ discretion and potential harassment for income tax payers.
• The scheme allows for appropriate cases where a certain hearing is necessary, so then after following protocols, a hearing is given.
• The main objective is to remove physical interaction as much as possible.

Zero Coupon Bonds

• A zero-coupon bond is a debt security that does not pay interest but instead trades at a deep discount, rendering a profit at maturity, when the bond is redeemed for its full face value.
• Some bonds are issued as zero-coupon instruments from the start, while others bonds transform into zero-coupon instruments after a financial institution strips them of their coupons, and repackages them as zero-coupon bonds.
• Because they offer the entire payment at maturity, zero-coupon bonds tend to fluctuate in price, much more so than coupon bonds.
• A zero-coupon bond is also known as an accrual bond.
• The difference between the purchase price of a zero-coupon bond and the par value, indicates the investor’s return.

INDIRECT TAX PROPOSALS

• Finance Minister has said that Deep analytics and artificial intelligence have been deployed to identity tax evaders and fake billers, launching special drives against them.
• The Finance Minister assured the House that every possible measure shall be taken to smoothen the GST further and remove anomalies such as the inverted duty structure.
• She announced that extensive consultation will be conducted and from 1st October, 2021, a revised custom duty structure free of distortions will be put in place. She also proposed that any new custom duty exemptions henceforth will have validity upto to the 31st March following 2 years of the date of its issue.
• The Finance Minister announced withdrawal of a few exemptions on parts of chargers and sub-parts of mobile phones further some parts of mobiles will move from “NIL” rate to a moderate 2.5 per cent.
• She also announced reducing custom duty uniformly to 7.5 per cent on semis, flat, and long products of non-alloy and stainless steel. She also announced exempting duty on steel scrap for a period upto 31st March 2022.
• The Minister also proposed an Agriculture Infrastructure and Development Cess on a small number of items. She said “while applying the cess, we have taken care not to put additional burden on consumers on most items.
• The cess is not uniform and varies from product to product.
• This Cess is applicable on petrol and diesel. But, the amount levied as AIDC is being counter-balanced by an equal reduction in Basic Excise Duty & Special Additional Excise Duty to the same extent, thus ensuring nil impact on fuel.
• Some of the items on which AIDC has been imposed include gold, silver and dore bars (2.5%), alcoholic beverages (100%) and crude palm oil (17.5%), Crude soyabean and sunflower oil (20%), Apples (35%), Coal, lignite and peat (1.5%), Specified fertilizers (Urea etc) (5%), Peas (40%), Kabuli Chana (30%), Bengal Gram/Chick peas (50%) Lentil (Mosur) (20%), Cotton (not carded or combed) (5%).
• Regarding rationalization of procedures and easing of compliance, the Finance Minister proposed certain changes in the provisions relating to ADD and CVD levies.
• She also said that to complete customs investigation, definite time-lines are being prescribed. The Minister said that the Turant Custom Initiative rolled out in 2020 has helped in putting a check of misuse of FTAs.

TURANT CUSTOMS INITIATIVE

• This step has been taken by CBIC for fulfilling its commitment to a Faceless, Paperless, and Contactless Customs under the umbrella of its “Turant Customs” programme.
• The launch of paperless documentation on exports is a sequel to a similar initiative that was begun for imports w.e.f. 15th April 2020.
• Green Customs:These initiatives will do away with the present requirement to take paper printout of these documents thereby promoting Green Customs.
• Business Friendly: Equally importantly exporters would not have to visit the Customs Houses for this purpose and can better utilize their time in promoting their business.
• Implementation: Turant Customs, which has as its main component Faceless Assessment, would be implemented in phases across the entire country by 1st January 2021.
• Benefits: These reforms are based on enhanced use of digital technology to reduce the time and costs for the importers, exporters and other stakeholders, thereby improving India’s ranking in the World Bank’s “Trading Across Borders” parameter of its Ease of Doing Business (EoDB) index.

IMPORTANT BUDGETARY TERMS