2020 has taught a lot of lessons to everyone globally. All around the world, people and the governments have been served a wake-up call regarding numerous aspects of life, whether health-wise, financially, or economically.
And India has been amongst the worst-hit countries both economically and medically. This has undoubtedly made the upcoming Union Budget 2021-22, scheduled for 1st February 2021, a giant ray of hope to revive the economy and assist the worst-hit medical sector and the citizens through tax benefits, funding, incentives, etc.
Let us have a quick look at some Budget 2021 expectations.
Health Sector: One of the prime lessons from COVID-19 pandemic has been to upgrade the infrastructure and resources of the health sector of the country. The detrimental effects of the highly contagious COVID-19 disease deeply hurt the frontline workers of our medical sector, and also showed areas to improve infrastructure-wise.
Hence, naturally, it is highly expected of the Modi government to spend big on healthcare and medical research by announcing adequate allocation for the same. This would assist in being better prepared to tackle such pandemic and other future diseases or outbreaks.
Additionally, the Budget 2021 is expected to emphasise using Ayurvedic medicines in times of COVID-19 pandemic and similar future outbreaks. The budget will also focus on and promote new drug discovery in Ayurveda by providing world-class research facilities and financial benefits, like tax holidays/tax deductions.
The Modi government can also boost Ayurvedic products’ consumption by waiving off GST for Ayurvedic Medicines, which would lead to a price reduction.
Competitive Import Tariffs: Another expectation from the upcoming budget is a graded plan and strategy towards competitive tariffs on import, over the next three years.
The aim is to promote domestic manufacturing as per current and expected global trade trends, which would boost India’s export competitiveness in the upcoming few years.
Temporary Tax Breaks and Increase Standard Deduction: The pandemic-induced lockdown and restrictions caused job loss and income disruption for many. Hence, the government is expected to make provisions to provide temporary tax breaks to those who experienced pay cuts or job losses this year. Tax breaks can be in the form of tax rebates or exemptions.
Another key benefit can be to increase the standard deduction limit, from the current Rs 50,000 to around Rs 1 lakh, and make this benefit available even for those who opt for the new tax regime.