Union Budget 2021

Economic indicators

GDP to contract by Current account

7.7 percent in FY20-21 recorded a
surplus of
GDP growth for
FY22 is projected at
3.1 percent
of GDP in H1 FY21
11 percent* due to modest
imports

The RBI cut repo rate by May record a

surplus of
115 basis points to
4 percent after March 2020 2 percent
for FY21 altogether
Continues with
an accommodative
monetary policy stance

Net FDI inflow jumps to

US$27.5 billion for April-October 2020
14.8 percent higher than April-October 2019

Fiscal deficit in FY21 is projected CPI averaged at

to increase to 9.5 percent 6.6 percent
of GDP from April to December
To target 6.8 percent
2020, driven primarily
by food
in FY22 and below
inflation and
4.5 percent supply
by 2025-2026 disruptions

INR averaged at 74.63

Exports
contracted by
from April to December
2020 as against 15.7 percent
70.38 to US$ 200.8 billion
from April to from April to December 2020
December in 2019

*Growth is measured on a year-over-year basis on real values.

© 2021 Deloitte Touche Tohmatsu India LLP

Union Budget 2021
Top 10 policy
announcements

Government-owned Public sector

development banks proposed
finance institution to be
for infrastructure recapitalised up
debt financing to to INR 20,000
be set up crores (~US$2.67
billion)
A new asset reconstruction
company and an asset
management company
will take over existing
stressed debt

A new entity to be introduced to purchase debt

securities; infrastructure debt funds to be
allowed to raise capital through zero coupon
bonds; infrastructure trusts to be enabled to
borrow from foreign portfolio investors (FPIs)

A single securities markets Privatisation of two public

code to be introduced by sector banks and a general
consolidating four existing insurance company
acts covering capital announced; ongoing
market, depositories, disinvestments of
securities four public
contracts, and sector
government enterprises
securities to be
regulations completed
in FY22

Pipeline for monetisation of public assets

such as roads, railways, oil and gas
infrastructure, power transmission
infrastructure, warehouses, sports
stadiums, etc., to be put in place

Foreign direct investment limit Higher Education

in the insurance sector Commission to be
proposed to be hiked established through a
from 49 percent to legislation for
74 percent standard-setting,
accreditation,
regulation,
Regulated gold
and
exchanges to be set
funding
up countrywide

© 2021 Deloitte Touche Tohmatsu India LLP

Union Budget 2021
Top 10 tax highlights

No changes to corporate or Equalisation

personal income-tax rates levy expanded
by clarifying a)
scope of online
International Financial Services sale of goods/
Centre (IFSC): Eligibility conditions provision of
for India based fund manager services and b)
regime relaxed; income-tax consideration
exemption expanded for offshore on which the
banking units; royalty levy
income from aircraft applies
leasing to IFSC units
exempted

Tax holiday extended to startups incorporated

up to 31 March 2022; capital gains exemption
on investment in startups extended to
31 March 2022

Tax holiday on affordable New tax deduction at

housing projects extended source (TDS) at 0.1%
to those approved by 31 introduced for
March 2022; scope of the tax payments by specified
holiday expanded persons for purchase
to cover affordable of goods from
rental housing a resident
projects seller

Income-tax assessment timelines and the re-

assessment window to be reduced to nine
months and halved to three years, respectively

Faceless Income-tax A new Agriculture Infrastructure

Appellate Tribunal and Development Cess (AIDC) on
(ITAT) appeals import of 25 notified products
scheme with from 2 February 2021 and as
dynamic jurisdiction excise duty on petrol and diesel
to be introduced; once notified; consequential
Authority for reduction in basic
Advance Rulings customs duty also
replaced by Board announced
for Advance Rulings;
Settlement
Commission
discontinued – Customs duty structure to be
pending rationalised by eliminating
applications to be outdated exemptions and phasing
heard by interim out of all conditional exemptions
boards by 31 March immediately
after two years of
introduction

© 2021 Deloitte Touche Tohmatsu India LLP