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Budget 2021 Proposals: Rs 1.5K crore scheme to boost Digital Payments

Sitharaman also said that the government has worked out the modalities for the National Research Foundation (NRF)

Monday February 1, 2021 2:23 PM, ummid.com with inputs from IANS

Budget 2021

New Delhi: To boost digital payments, Union Finance Minister Nirmala Sitharaman on Monday proposed a Rs 1,500 crore scheme during her budget presentation.

"To give a further boost to digital transactions, I earmark Rs 1,500 crore for a proposed scheme that will provide financial incentive to promote digital mode of payment," Sitharaman said.

Sitharaman also said that the government has worked out the modalities for the National Research Foundation (NRF), which was announced in her Budget speech of 2019.

"The NRF outlay will be Rs 50,000 crore over five years," the Finance Minister said.

"It will ensure the overall research ecosystem in the country is strengthened with focus on identified national priority thrust areas," she added.

Customs duty up 2.5% on mobile parts

In another bid to boost domestic manufacturing, the government on Monday announced a 2.5 per cent increase in customs duty on mobile chargers and some sub-parts of phones, a move that will make phones more expensive.

Finance Minister Nirmala Sitharaman, during her Budget speech, said:

"Withdrawing exemptions on parts of chargers and mobile phones will boost local manufacturing of smartphones. Domestic electronic manufacturing has grown rapidly. We are now exporting items like mobiles and chargers."

"For greater domestic value addition, we are withdrawing a few exemptions on parts of chargers and sub-parts of mobiles. Further, some parts of mobiles will move from ‘nil' rate to a moderate 2.5 per cent."

The Centre has already rolled out a production linked incentive (PLI) scheme for the electronics manufacturing sector, particularly for mobile phone manufacturing, to curb increasing imports.

In October last year, the Ministry of Electronics and IT had approved the applications of Samsung, Foxconn Hon Hai, Pegatron, Rising Star and Wistron from among the international applicants for manufacturing of mobile phones in India under the PLI scheme.

The domestic companies approved for mobile phone manufacturing under the scheme are Lava, Bhagwati (Micromax), Padget Electronics, UTL Neolyncs and Optiemus Electronics.

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Further, six companies approved under the Specified Electronic Components Segment are AAT&S, Ascent Circuits, Visicon, Walsin, Sahasra and Neolync.

The PLI scheme for large-scale electronics manufacturing, notified on April 1, 2020, extends an incentive of 4-6 per cent on incremental sales (over base year) of goods under target segments that are manufactured in India to eligible companies, for a period of five years subsequent to the base year (FY2019-20).

In November, the governed announced a mega PLI scheme for 10 sectors, including advanced chemistry cell battery, electronic products, automobiles and auto components, pharma, telecom and networking products, textile, food products, white goods and speciality steel.

Tax holiday for startups extended

Union Finance Minister Nirmala Sitharaman on Monday proposed the extension of tax holiday for startups by one more year.

The move announced during the Budget presentation comes as India focuses on Aatmanirbhar Bharat mission aimed at making India a self-reliant nation.

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In another boost for startups, Sitharaman said that one-person companies will be allowed to grow without any restriction on paid-up capital or turnover and to convert into any other type of company at any time.

The Union government announced tax relief for startups in the previous budget also as part of its efforts to boost the ecosystem in the country.

The Finance Minister last year also announced five-year tax holiday on employee stock ownership plan (ESOPs) for start-ups.


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