SRI BALAJI UNIVERSITY PUNE (SBUP)

BALAJI INSTITUTE OF TELECOM AND MANAGEMENT

SEMESTER – I – BATCH – 2020-2022
CONTINUOUS EVALUATION: ASSIGNMENTS

NAME OF THE STUDENT: - SHIVANGEE CHANDEL

ROLL NO: - TM2019217 SEMESTER: - Semester 1

REG. NO.: - 31-1441 SUBJECT NAME: - ERP
SPECIALISATION: - Marketing ASSIGNMENT NO: - 3
BATCH: - 2020-2022 SUBMISSION DATE: - 15 January 2021
INSTITUTE: - BITM TOTAL NO. OF PAGES: - 14

Que 01- What are the six pillars of budget 2021-22?

ANSWER

Finance Minister Nirmala Sitharaman on 31st Jan 2021 presented the Union Budget 2021-2022 in
the Parliament. Being the first budget of a new decade and also the one during the pandemic, the
budget was focussed on boosting, encouraging India towards being Aatmanirbhar (Self-Reliant).
The two main key segments where the government focussed its spending were infrastructure and
health. Finance Minister said this year's budget was based on 6 pillars to ensure the overall
development of the country. 
First Pillar: Health and Well-Being
Finance Minister Nirmala Sitharaman announced an expanded focus on Health, allocating 2.83
lakh crores in this year's Union Budget - a 137% in Health budget. Under the Health and well-
being sector, she announced a Centre-sponsored Health system - PM Aatmanirbhar Swasth
Yojana with an outlay of Rs 64,180 crores over 6 years in addition to the National Health
Mission. 

1. PM- Aatmanirbhar Swasth Yojana scheme will be launched

2. Jal Jeevan Mission Urban scheme will be launched
3. Urban Swachh Bharat Mission 2.0 will be launched
4. Voluntary vehicle scrapping policy to be launched for reducing pollution 
5. Pneumococcal vaccine rollout will be done to prevent 50,000 child deaths annually
6. Mission POSHAN 2.0 to be launched
7. Supplementary Nutrition Programme & POSHAN Abhiyaan to be merged

Second Pillar: Physical and Financial capital and infrastructure

With an aim to create jobs for youth, FM Sitharaman announced ₹ 1.97 lakh crore over 5 years
starting this FY, for Production Linked Incentive Schemes to create manufacturing global
champions for an AatmaNirbhar Bharat. FM also announced a sharp increase of 34.5% in capital
expenditure as compared to previous budget estimates - resulting in allocation of ₹ 5.54 lakh
crore. In a first, the FM announced a record sum of ₹ 1,10,055 crore to be provided for Indian
Railways. She also announced that definition of small companies under Companies Act 2013 to
be revised so as to Companies with paid-up capital up to ₹ 2 crore & turnover up to ₹ 20 crore
will fall under small companies.
 

1. Scheme of Mega Investment Textile Parks to be launched 

2. PLI scheme to be launched 
3. 7 textile parks to be set up over 3 years
4. Development Financial Institution to be set up, to provide, enable & catalyze infra
financing. ₹ 20,000 crore allocated to capitalize this institution
5. National Monetization Pipeline of potential brownfield infrastructure assets to be
launched
6. Railways to monetize dedicated freight corridor assets for O&M
7. Western Dedicated Freight Corridor and Eastern Dedicated Freight Corridor to be
commissioned by June 2022
8. 100% electrification of rail broad gauge routes to be completed by December 2023
9. Scheme at a cost of ₹ 18,000 crore for augmentation of public bus transport services
to be launched
10. MetroLite and Metro New Technologies to be deployed to provide metro rail
systems
11. Comprehensive National Hydrogen Energy Mission to be launched
12. Seven port projects worth more than ₹ 2,000 crore to be offered by major ports in
PPP Mode
13. Scheme for promoting flagging of merchant ships in India to be launched
14. Ship Recycling Capacities of around 4.5 million Light Displacement Tonnage to be
doubled by 2024
15. 100 more districts to be added in next 3 years, to City Gas Distribution Network
16. A single and rationalized Securities Markets Code to be set up, by consolidating
provisions of SEBI Act 1992, Depositories Act 1996, Securities Contracts Regulation
1956 and Govt. Securities Act 2007
17. Insurance Act 1938 to be amended, to increase permissible FDI limit in insurance
companies from 49% to 74%
18. Asset Reconstruction Company Ltd. to be set up to consolidate and take over
existing stressed debts
19. Deposit Insurance Cover for bank customers to be increased from ₹ 1 lakh to ₹ 5
lakh
20. NCLT framework will be strengthened, e-court system to be implemented, alternate
debt resolution mechanism and special framework for MSMEs to be introduced,
Data Analytics and AI driven MCA 21 version 3.0 to be introduced
21. IPO of LIC also to be brought in
22. Disinvestment of IDBI Bank, Air India etc would be completed in 2021-22
23. Fintech Hub was also proposed to instill confidence in participants among the
corporate bond market. The body will help in the development of bond markets.
Third Pillar: Inclusive Development for Aspirational India
FM Sitharaman began by saying - "Our Government is committed to the welfare of farmers",
amid ruckus by the Opposition. She said, "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."

1. SVAMITVA (Survey of Villages Abadi and Mapping with Improvised Technology

in Village Areas) scheme to be extended during 2021-22 to cover all states and union
territories
2. Agricultural credit target enhanced to ₹ 16.5 lakh crore, focus will be on ensuring
increased credit flow to animal husbandry, dairy and fisheries sectors
3. Allocation for Rural Infrastructure Development Fund to be enhanced from ₹
30,000 crore to ₹ 40,000 crore
4. ₹ 5,000 crore Micro Irrigation Fund to be augmented by another ₹ 5,000 crore
5. Scope of Operation Greens Scheme to be extended from tomatoes, onions and
potatoes to 22 perishable crops
6. 1,000 more mandis will be integrated with e-NAM
7. Agriculture Infrastructure Fund would be made available to APMCs for
augmenting their infrastructure facilities
8. 5 major fishing harbours – Kochi, Chennai, Visakhapatnam, Paradip, and
Petuaghat – will be developed
9. Multipurpose Seaweed Park to be established in Tamil Nadu
10. Setting up of a portal that will collect relevant information on gig, building, and
construction-workers among others, thus helping to formulate Health, Housing,
Skill, Insurance, Credit, and food schemes for migrant workers.
11. Minimum wages will apply to all categories of workers, and they will all be covered
by the Employees State Insurance Corporation.
12. Women will be allowed to work in all categories and also in the night-shifts with
adequate protection.
13. 15,700 crores to MSME sector

Fourth Pillar: Reinvigorating Human Capital

1. Over 15000 schools will be qualitatively strengtehened

2. 100 new Sainik Schools 
3. Legislation for umbrella body of higher education 
4. Central university in Leh

Fifth Pillar: Innovation and R&D

1. National Research Foundation 50,000 crores outlay for over 5 years

2. 1,500 crores for a proposed scheme that will provide financial incentive to promote
digital modes of payment.
3. National Language Translation Mission (NTLM) to be launched
 4. 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.
5. ₹4,000 crores outlay for deep ocean survey spread across five years for conservation
of deep ocean biodiversity.

Sixth Pillar: Minimum Govt., Maximum Governance

1. National Nursing and Midwifery Commission Bill will be introduced by the

government
2. Conciliation Mechanism to be set up for quick resolution of contractual disputes
3. 3,768 crores in the year 2021-2022 allocated for first ever digital census
4. 300 crores for Goa to celebrate its diamond jubilee of the state’s liberation from
Portuguese rule
5. 1,000 crores for the welfare of Tea workers especially women and their children in
Assam and West Bengal

Ques 02. Do you believe that the budget is in right direction and economic growth will take
care of debt servicing, and increasing employment? Justify your views supported by
numerical data taken from the Budget allocations

Ans 02- The current budget is a major step in the right direction. It focuses heavily on
infrastructure, health, capital expenditure, decommissioning, monetization, work creation,
digitalization. These steps are not only progressive and stimulated but will also lead India to
expected V-shaped growth and development if implemented correctly. The budget addresses
structural banking reforms, increased debt funding and credit limits for firms, and asset
monetization. The effect would be an increase in public expenditure which will in turn boost
demand, thereby making it neatly positive for the industry. The 2021 Budget would have a
constructive effect on people's lives through targeted measures to expand social security benefits
to higher economic levels, fiscal concessions for accessible housing and rental housing, a
streamlined enforcement scheme for start-ups, and a tax exemption for senior citizens. The six
pillars of economic growth would be focused on the consistency of tax rules, simplification of
enforcement procedures, and consolidation of laws.
Few of the steps taken to boost the economic growth in the current union budget 2021 are: -

 The agriculture and farmers' welfare ministry received 5.63 percent more budget
allocation at Rs 1,31,531 crore for 2021-22 and half of it would be spent on the flagship
PM-KISAN scheme and slightly higher funds are made available for Agri-infra fund and
irrigation programs. On MSP procurement, Sitharaman said the government's payment on
wheat procurement has increased to Rs 62,802 crore in 2019-20 and even better in 2020-
21 from the level of Rs 33,874 crore in 2013-14. About 43.36 lakh wheat growers have
benefitted from the MSP payment in 2020-21 as against 35.57 lakhs in the last year.
Similarly, the MSP payment on rice procurement has increased to Rs 1,41,930 crore in
2019-20 and an estimated Rs 1,72,752 crore in 2020-21 from Rs 63,928 crore in 2013-14.
 Strengthen MGNREGA with an increase in minimum person-days from 100 to 150 days.
The government would be introducing the legislation this year to implement the setting-
up of the Higher Education Commission of India. Union finance minister Nirmala
Sitharaman further added that the Centre would work towards raising the share of public
transport in urban areas through the expansion of metro rail networks and also announced
two new technologies – Metro-lite and Metro-neo for Tier 2 cities.
 The announcement of an additional 11,000-km of highways and metros, along with rapid
rail transport projects for 27 cities, and a long-awaited vehicle scrappage policy boosted
stocks of metal companies that will cater to added demand for steel and aluminum. These
include Jindal Steel & Power Ltd., JSW Steel Ltd., Tata Steel Ltd., Hindalco Industries
Ltd., Vedanta Ltd., Hindustan Zinc Ltd., and Hindustan Copper Ltd.
 The Covid-19 pandemic prompted Sitharaman to boost healthcare spending this year, an
improvement over the less than 2% of the gross domestic product that India has
traditionally spent on health annually. Though the budget estimate 2021-22 for health and
well-being is pegged at Rs.2,23,846 crore, translating to an increase of 137%, the amount
also includes the budget for schemes from other ministries along with the ministry of
health and family welfare such as POSHAN Abhiyan under Women and Child
Development ministry, Jal Jeevan Mission (Urban) under the department of Water and
Sanitation.
 Finance Minister Nirmala Sitharaman in the Union Budget said 100 more airports will be
developed by 2025 to support the UDAN scheme. Presenting the Budget for 2020-21,
Ms. Sitharaman said ₹ 1.7 lakh crore has been provided for transport infrastructure in
2020-21. She also said 150 trains will run under the public-private partnership (PPP)
mode, also four stations will be redeveloped with the help of the private sector.
Ques 03. Critically analyze whether Privatization & monetization of assets will help bring
in more funds and change the trajectory of working of various PSU organizations.

Ans 03-Public asset monetization in India is not a new phenomenon. Over the past years,
monetizing reach and scope has extended to a more integral approach involving physical
properties, from financial assets such as Initial Public Offerings in Central Public Sector
Enterprises (CPSEs). In recent years, The Department of Investment and Public Asset
Management (DIPAM) is working on restructuring and asset monetization of public sector
enterprises for better management and competitiveness in the present world Cabinet in its
meeting on 28.02.2019 approved procedure and mechanism for Asset Monetization of Central
Public Sector Enterprises (CPSEs)/Public Sector Undertakings (PSUs)/other Government
Organizations and Immovable Enemy Properties. The policy framework lays down the
Institutional framework for monetization of the following:

 Identified non-core assets of CPSEs under strategic disinvestment;

 Immovable Enemy Property under the custody of Custodian of Enemy Property (CEPI),
MHA as per sub section 6 of section 8A of the Enemy Property Act, 1968;
 This framework is also available for use to monetize assets of other CPSEs/PSUs/other
Government Organizations with the approval of the Competent Authority;
 Sick/Loss making CPSEs under closure normally follow the DPE closure guidelines
dated 14.06.2018 in this regard. However, any sick/loss making CPSE can also adopt this
framework with the approval of Competent Authority.

The objective of the asset monetization program of the Government of India is to unlock the
value of investment made in public assets which have not yielded appropriate or potential
returns so far.

One of the projects involving the monetization of physical assets was the railway station
redevelopment program. In this project, the Indian Railways Station Development
Corporation is converting Habibganj and Gandhinagar railway stations into a world-class
airport like railway station by the Indian Railways Station Development Corporation
(IRSDC). Since 2017, a model for the Toll-Operate Transfer (TOT) for asset monetization has
been deployed by the Indian National Highway Authority (N HHAI). Besides, the Indian
Airports Authority (AAI) has already finished privatizing six specified airports (Ahmedabad,
Mangalore, Lucknow, Thiruvananthapuram, Jaipur, and Guwahati).
The Government of India has further approved a monetization plan to increase the assets for
the current financial year to approximately Crum 90,000 in key sectors like aviation,
electricity, shipping, highways, railway. For example, there are about 43.000 hectares of
Indian railways vacant land throughout the country and several road projects are being
monetized.

Furthermore, 11 properties including ten berths and the Goa port International Cruise Terminal
are being recycled by the Ministry of Shipping. BSNL and MTNL towers are projected to be
monetized in the telecommunications market.

To begin with, India was not a likely candidate for rapid privatization, because it did not satisfy
two necessary conditions for rapid privatization: severe macroeconomic crisis, including high
inflation, and a strong executive that could ram policies through. Many developing countries
satisfied one of these criteria, e.g., Brazil and Turkey experienced several bouts of
macroeconomic instability, yet these countries did not privatize rapidly. Even countries that
satisfied both criteria, e.g., in sub-Saharan Africa, privatized gradually or not at all (Día, 1992).
Only a handful of countries in Latin America and the transitional economies met both criteria
and also privatized deeply and quickly (e.g., Argentina, Chile, Peru, Czech Republic, Estonia,
etc.). To be sure, in 1991, when serious economic reform began in India, the country was in the
midst of a balance of payments crisis and sought IMF assistance. But that crisis quickly gave
way to a decade of good economic performance by Indian standards. From 1992-93 to 2000-
2001, India’s GDP grew at an average rate of 6.1 percent, inflation averaged 7.1 percent, and
although imports exceeded exports every year, remittances and service exports grew to limit the
current account deficit to average 1.1 percent of GDP (Acharya, 2002). Rising capital inflows
saw the country’s foreign exchange reserves climb to $55 billion by 2002. While these results
were not spectacular compared to the high-growth Asian economies in their heyday, they were
certainly better 3 than India’s previous record as well as the record of most other LDCs in the
1990s. Given that reality, politicians had little incentive to push through structural reforms like
privatization that would run into fierce resistance from powerful interest group

However, the underlying structural and legacy issues combined with market conditions could
pose a serious threat to the success of such monetization plans. The government has faced many
challenges in its asset monetization efforts in the past. Lack of proper maintenance of asset
register and title and encroachment issues have adversely affected the Indian Railways’ plan to
monetize its land. Furthermore, the progress of the flagship railway station redevelopment
program has been marred by improper planning including land unavailability, delayed approvals
and clearances, policy constraints and lack of coordination among stakeholders. The current
market conditions and legacy real estate industry issues could further impact the progress.

NITI Ayog has therefore suggested the creation of an Empowered Group of Secretaries for fast
approval and clearances under the railway station redevelopment program. In the roads sector,
refinancing remains an issue considering the long-term nature of the TOT concessions despite
the model providing more certainty of cash flows to the investors than under the greenfield
projects. So far, the TOT model has witnessed limited participation in all its previous packages
or bundles. Further, the unprecedented situation caused by COVID-19 which has severely
impacted the toll collections could delay the asset monetization plan of NHAI.
An underlying objective of asset monetization is to raise resources for future investments into the
sector.
To achieve the desired target, the Infrastructure Trust (InvIT) model could be implemented to
effectively recycle capital invested in operating assets. The Cabinet Committee for Economic
Affairs (CCEA) in the electricity sector has recently agreed to monetize the transmission assets
of the Indian state-owned Power Grid Company through the InvIT model. In this case, PGCIL
may use its asset monetization and under-construction projects to deploy proceeds estimated at
Rs 7,000 crore.
The Infrastructure Trust (InvIT) model could be adopted to efficiently recycle capital invested in
operating assets. This model also has the advantage that it is attracting both national and
international investors such as sovereign wealth funds, retail investors, and institutional investors
such as pension funds.

Public asset monetization is a dynamic and comprehensive process requiring the management,
successful planning, and thorough due diligence of the asset's technological, operational, and
financial aspects. Effective monetization would ease current programs, open asset value, and
promote economic development. The monetization exercise is also successful. The monetization
of assets can be a game-changer for India's infrastructure investments.

Ques 04. Can you defend that higher health care, agriculture and social spending will
improve the standard of living of people and prevent people from falling in poverty?
Support your argument with numerical Data and actual allocations made in the Budget.

Ans 04- Health Care-

Higher Spending on the health care sector of India especially for vaccination against COVID-19
will create confidence within the Indian workforce which is imperative to attract the workforce
to accelerate the economy after the Nationwide lockdown.

In the budget 2021, investments in health infra have increased dramatically and this year will be
improved in three areas - preventive health, curative health, and well-being. It has announced the
setting-up of 17,000 rural and 11,000 urban health and wellness centers in each district and the
establishment of integrated public-health laboratories. A new central funded scheme for primary,
secondary, and tertiary healthcare PM AatmaNirbhar Bharat Yojana, with a cost of
approximately 64,180 crores over 6 years, was launched, Sitharaman said. Sitharaman announces
that, in the context of the ongoing COVID-19 pandemic, the Government of Narendra Modi will
provide Rs 35 400 crores for vaccination against COVID-19 in 2021-22. The Made in India
pneumococcal vaccines are currently only available in five states, will be deployed nationwide,
according to FM which will avert more than 50,000 deaths each year in the country. The Made in
India product Vaccine against potential pneumococcal diseases such as pneumonia, septicemia
and meningitis.

Agriculture –
Post pandemic economic world is focusing to increase the demand to push start the economy.
Since the demand is reaching saturation point among urban population in country like India, the
GOI is focusing more to increase the liquidity of cash among the rural population which is
around 65% of total population of India. The GOI has also an Inter-Ministerial Committee to
examine issues relating to Doubling of Farmers’ Income (DFI) and recommend strategies has
identified seven sources of income to double farmer’s income by 2022.

To provide adequate credit to our farmers, the Finance Minister in the Union Budget
2021 enhanced the agricultural credit target to Rs 16.5 lakh crore in FY22. Smt. Sitharaman
further said that the Government will focus on ensuring increased credit flows to animal
husbandry, dairy, and fisheries. The Finance Minister also announced the enhanced the
allocation to the Rural Infrastructure Development Fund from Rs 30,000 crore to Rs 40,000
crore. Sitharaman proposed to double Micro Irrigation Fund, started with a corpus of Rs 5,000
crore under NABARD, by augmenting it by another Rs 5,000 crore. The Finance Minister said
that around 1.68 crore farmers are registered and Rs 1.14 lakh crore of trade value has been
carried out through e-NAMs. Keeping in view the transparency and competitiveness that e-NAM
has brought into the agricultural market, the Finance Minister proposed to integrate 1,000 more
mandis with e-NAM to bring transparency and competitiveness. In addition,5 major fishing
harbors – Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat – will be developed and also
a Multipurpose Seaweed Park to be established in Tamil Nadu.

Social

The spending on social welfare is also important to help people to recover from poverty. Rs
93,224.31 crore allocation towards the education ministry in its Budget estimate (BE) 2021-22.
The total allocation stood at Rs 54,873.66 crore for school education and Rs 38,350.65 crore for
higher education. 3,768 crores in the year 2021-2022 allocated for first ever digital census. 1,000
crores for the welfare of Tea workers especially women and their children in Assam and W.B.
Another 300 crores have been allocated for Goa to celebrate its diamond jubilee of the state’s
liberation from Portuguese rule. FM also announced that an additional 1 crore families will now
benefit under the Centre’s Ujjwala scheme.

5. Comment specifically on
(a) Increasing FDI in the insurance sector to 74%

Increasing the FDI limit in insurance from 49 per cent to 74 per cent could lead to an
unprecedented expansion of the insurance sector, its penetration, its level of competition, and
value for customers in terms of better products at lower cost. Foreign inflows in insurance
companies will also enable them to become more effective vehicles for household savings,
creating long-term assets in the economy.Under the new structure, the majority of directors on
the board and key management persons would be resident Indians with at least 50 per cent of
directors being independent directors and specified percentage of profits being retained as
general reserve.

(b) Creating an Asset Management company to manage stressed assets.

An Asset Reconstruction Company Limited and Asset Management Company would be set up to
consolidate and take over the existing stressed debt and then manage and dispose of the assets to
Alternate Investment Funds and other potential investors for eventual value realization will be
Beneficial for Banking Sector. The new entities will help effectively deal with non-performing
assets (NPAs) which may see a surge once regulatory forbearance to deal with the impact of
COVID-19 is withdrawn.The high level of provisioning by public sector banks for their stressed
assets calls for measures to clean up the bank books, the finance minister said while unveiling
the Budget for 2021-22.

(c) The fiscal deficit projected at 9.5% and 6.8% for FY21 and FY22 respectively, both are
higher than market - consensus expectations of 5.5%.

 FY21 deficit was pegged at -9.5% of GDP, which is expected to ease to -6.8% in FY22, closer
to our forecast vs consensus at 5.0-5.5%. With growth estimates being more conservative than
the Economic Survey projected, there is a likelihood that the deficits might improve vs those
outlined in the Budget. Additionally, revenue assumptions might also pose some upside,
especially the FY21 numbers, in light of higher indirect tax collections in 2HFY21. The
government proposed to lower the fiscal deficit target to below -4.5% of GDP by FY26, which
will require an amendment in the FRBM framework.

(d) Spending on various infrastructure segments like Roads, Railways, Urban development,
Shipping, water, and affordable housing and its impact on employment generation.

Finance Minister announced a National Bank for Financing Development (NaBFID) to help in
the process of infrastructure financing in the country.As much as Rs 5 lakh crore will be lent by
developmental finance institution over three years. A new bill is proposed to set up DFI
providing Rs 20,000 crore to launch the National Asset Monetization Pipeline to fund new infra
projects. This developmental financial institution will play a key role as an enabler for
infrastructure financing in the country which will be surely result an increase in employment.
The move announced in Union Budget 2021 is expected to be positive for companies and its
employees like L&T, GMR, Dilip Buildcon, PNC Infratech and JMC Projects.

(e) Higher borrowing, resulting in 20% outgo by way of Interest.

The Budget may signal a shift away from targeting fiscal deficit (or total borrowings) as a
percentage of GDP to targeting total debt as a percentage of GDP. Total debt is nothing but the
debt of the past years plus the borrowings in the current year. The significance: this shift may
allow the government to spend more (breaching the existing fiscal deficit norms) in the next few
years and still appear to be fiscally responsible.