The Ramification Of Budget 2021

The secret to Budgeting is that it needs to be honest. Not what you think it should be or wish it could be, but what it really is." – Lisa Conway Hughes

Managing finance is the most crucial step to achieving the life you want. Just like we plan out the yearly budget for spending & saving for a secured future, the economy of a nation also does. Running a population of approximately 136.64 crores & ensuring the safety of their lives is not facile. It requires immense planning & putting it into action which is where the financial budget comes into the picture. Every action has a reaction, following this ideology it's important to know the implications of our Budget 2021.

With the pandemic hit jeopardizing the year 2020, every nation needs to stand straight on its feet & overcome the COVID-19 abrupt recession. The government needs to bring its nation out of the crisis & focus on the development all together which is why Budget 2021 will play an indispensable role in this fiscal year. The finance minister played his part by delivering the much-awaited Budget 2020-21 but what will be its consequences on reviving the economic growth is the important question that stands. The impacts can be briefly stated as under:

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  • The area of concern when it comes to the budget is the changes in the personal income taxes & this year is no different. In an attempt to increase the spending capacity of the masses, the government has estimated tax cuts at Rs. 40,000 crores to give a tolerable boost to consumption demand in the short run.

  • The biggest win & tool of economic development for any government is the push in its investment. To boost industrial investments & India's participation in the global value chain the budget has announced an alteration in the dividend distribution tax (DDT) following corporate tax cuts of 2019 to attract more foreign investments.

  • Manufacturing is another vital sector of the Indian economy & to pump up the competitiveness in its sub-segments, a package of Rs. 1480 crores have been announced on textiles with a waive for anti-dumping duties on a key component majorly PTA.

  • Apart from this, the government has also made its mark on imports by raising the customs duties along with greater scrutiny of imports from Free trade agreements to aid the domestic industries growth.

  • Another area of concern is to increase investments in infrastructure by increasing capital spending & the provision of value gap funding in the areas that need investment the most like hospital, medical schools, etc.

In a nutshell, the budget predominantly shapes various sectors of the economy for financial progress. Let us all hope for a healthy & wealthy 2021 in the light of the 2020-21 Budgetary guidelines.