On February 1st, 2021, Union Finance Minister Nirmala Sitharaman announced the budget for FY 2021-22. Apart from focusing on the action plan regarding the ongoing farmers’ protest in NCR, she also emphasised ‘privatisation’ several times in her two hour long speech. For the first time in India, in lieu of the classical pen & paper method, the Budget was presented digitally this time, where a tab made in India was used by the Finance Minister to read out budget details and the members of parliament were issued electronic copies of the same. It was a clear message to support Prime Minister’s ‘Atmanirbhar Scheme’ and promote digitization of processes in the system.
Following the drastic measures taken in the country to control or prevent the spread of coronavirus, the Budget allocated INR35,000 crore for Covid-19 vaccines. Apart from taking important decisions to resolve the prevalent third-world problems, the Union Minister for Finance shared important pointers on the government’s approach towards a new world order that calls for inclusive and equitable growth.
Talking about the employment sector, the FM made key announcements that stated major investments in Start-ups and MSMEs. 5 main highlights of the event are as follows:
Budget planned to pave way for start-ups and MSMEs
Compared to the previous year, the allocation of budget is more than doubled, directly escalating from 7,572 crores to 15,700 crores this year. The union has also taken important decisions to reduce customs duty on products, hence ensuring import substitution. On top of that, domestic manufacturing will be heavily promoted which is, again, a cherry on the cake for MSMEs. To promote investments in SMEs, capital gains have been exempted for investments by one more year, i.e., till March, 31st 2022. It was also noted during the speech that the budget provides for the introduction of a special framework for debt resolution in respect of MSMEs.
Markets give big shout-out to Budget 2021, Investors became richer by over INR 6.34 lakh crore
The global pandemic had induced slowdown to the national economy and against this backdrop, the new budget is being called as ‘unprecedented’ by Analysts
Another reason for cheering the Budget proposals is that the BSE benchmark Sensex zoomed 2,314.84 points or 5% to close at 48,600.61. It jumped 2,478.63 points to 48,764.40 during the day which was, apparently, the best Budget-day gain for the markets since 1997.
It’s a budget reformist, will catalyse economic revival post Covid-19
Calling it a reformist one, the formal sector of the nation, India Inc hailed the Finance Minister’s Budget for 2021-22. It is said to be imagining India’s self-reliance like never before and also drive revival of the economy from the adverse impression of the pandemic with an overall enhanced spending.
Industry leaders across different sectors came in for praise seeing the focus on growth over fiscal consolidation, healthcare spending and initiatives taken to help the startup ecosystem.
Government to provide PF to employees who lost during pandemic
Even before the budget was announced the government took several recovery steps for bringing round the working class of the country. Again, during her speech, Sitharaman mentioned “If employers who threw staff during Covid-19 – whatever may be the reason – take them back, we will provide their PF for the coming two years. Let them come back.” This is seen as a positive sign to keep the employees’ morale high and assist them financially to overcome the losses incurred during the coronavirus outbreak.
A boost will in public expenditure, an aid to middle-class, small traders
Promising to boost the public expenditure, the finance lady hinted at starting a new infrastructure project which may take up to 5 years, but is sure to create a large number of jobs starting from now. She adds, “We have taken steps for employment creation, infrastructure development which will again generate employment and a change in the definition of MSME. All these measures will help middle-class people and small traders.” To promote investments in SMEs, capital gains have been exempted for investments by one more year, i.e., till March, 31st 2022. The budget even suggests extending the eligibility of claiming tax benefits for start-ups by another year.
A ready-steady-go to social banking for a diverse workforce
Since remote working is a hot topic as well as practice post pandemic, the government will strongly facilitate the extension of social security benefits to contractual, gig and platform workers. Talent acquisition from all over the country and providing employment opportunities in Tier 2, 3 and 4 cities by organizations is another key pointer. A portal will also be set up to collect and maintain information on this workforce segment.It will ensure accurate monitoring, lend the digital touch, besides providing financial assurance to contractual workers during uncertain economic cycles.
Recommended Blog: The Impact of COVID-19 And National Lockdown on Employment Laws
The opposition is trying to bring the proposal down by releasing negative statements about the new budget. However, if we ignore the naysayers, this year is certainly going to open many doors for the employment sector as the budget is prepared, keeping in mind that it is the need of the hour. It is indeed a thumbs-up for the inclusive employment opportunities.