Economics of Union Budget 2021-22
Professor M.M. Goel*
The first digital budget of the decade of the size of Rs 3483236 crore for 2021-22 by Smt. Nirmala Sitharaman Finance Minister (FM) in the Parliament on Feb.01,2021 is the immunity booster for the health sector with 137 percent hike to Rs 223 896 crore having vaccine of disinvestment and borrowing ( 36 percent) for Indian economy with no new taxes.
The rupee goes as 20 paisa on interest payments, 16 paisa to state share in taxes and duties with devolution at 41 percent , 13 paisa central sector schemes, 10 paisa on financial commission and other transfers, 09 paisa each on subsidies ( 43 percent reduction) and centrally sponsored schemes , 08 paisa on defence, 05 paisa on pensions and remaining 10 paisa on other expenditures. The six pillars of the budget including health and well-being, physical and financial capital infrastructure, roads and highways, inclusive development for aspirational India, reinvigoration human capital, minimum government and maximum governance may lead to infuse more growth into the economy of Bharat. The target of bringing Fiscal Deficit to 6.8 percent of GDP in 2021- 22 from the revised estimate of 9.5 percent in 2020-21 would be achieved is a matter of serious concern. Monetization of the assets is not in good taste to become the fastest growing economy of the world. In real sense FM is too much optimistic and certain things need to be understood and analysed by the fraternity of economists.
The provisions in the union budget 2021-22 for atmanirbharta in 13 sectors are not sufficient and calls for needoeducation of the stakeholders including consumers, producers, distributor, traders and politicians in power and opposition. We have to create faith in the fundamentals of Indian economy by adopting needonomics and user pay principle so that the hopes of the stake holders are not bellied.
The Government has given some boost to the start-ups by extending the tax holiday for one more year conveys the gaps between expectations and reality for the Indian youth seeking more employment opportunities.
The provisions for the social security benefits to the people at large are highly appreciable. The idea of establishing Development Financial Institutions deserve to be welcomed.
New policies can be initiated and should be kept in view the implementation and achievements of the previous ones.
There are no specific initiatives for strengthening the digital infrastructure of the nation, inspite of being called the first digital budget of the decade by the FM. We have to pay special attention for enhancing the digital capacities of the rural economy of India with potential, if we really want to say that the budget 2021-22 is for the villages. We have been witnessing a big rural- urban divide almost in all the sectors of the Indian economy. FM has missed the opportunity to do something specific for the gaps in rural urban areas. There is lip service in case of the agriculture sector, only one convivial move is that there would be some administrative reforms for the co-operatives. We can do much better by reviving co-operatives which can give boost to the farming which will cover 85 percent of the marginal and small farmers as concrete plan of action .
For the salaried class this budget is a balanced one as it is a kind of situation of no profit and no loss for them. There is no vision of the woman FM for gender budgeting for the women empowerment. For ensuring women empowerment and gender equality, the woman FM should have adopted ‘gender budgeting’ more than merely increasing the budgetary allocations for ease of living and improving quality of life The most significant and easy going path in front of the Government always is to disinvest rather than generating new sources of revenue for financing the central government.
The senior citizens above 75 years living in Kurukshetra are extremely happy from the Union Budget 2021-22 as they are exempted from filling the income tax return for which they were to hire the service of income tax advocates whose income will decline.
The middle class are motivated to contribute towards Atamnirbhar Bharat by adopting atmanirbharta without any direct announcement of the benefits. Atmanirbharta is necessary and sufficient condition for sustainable development of an economy and its people by keeping a check on greed which is villain for all.
The tax thieves are also happy as the older than three years of income tax will not be reopened.
Although MSP is a known word among the agitating formers, yet the FM has understood it as minimum needs, support needs and protect needs of all the stakeholders including farmers more than minimum support price (MSP) of the 23 agro -products announced by the government.
The government should have restored the purchasing power of the employees as consumers by paying the dearness allowance which stands freeze and is not justified as is a measure of compensation for inflation.
Keeping in view the resource crunch in the economy, the conspicuous consumption at micro and macro levels should have been stopped. There is need for sharing the responsibility calling for pricing policy of public utilities to be linked with inflation. Puncher tires of the Indian economy may be re-tired with the provisions in this budget. We can be hopeful for the things to take shape in the real sense by understanding and adopting the canons of public expenditure advocated by Dr. B.R. Ambedkar that every Government should spend the resources garnered from the public not only according to rules, laws and regulations, but should also see that ‘faithfulness, wisdom and Economy’ are adhered to in the acts of expenditure by the Govt. The recommendations of 15th Finance Commission have created space for the centre to create a non-lapsable fund for acquisition of defence equipment as far reaching with its impact spread over time.
We have to adopt sustainable fiscal path for needed growth with infrastructure investments by keeping in mind the receipts which falls in the domain of needonomics required for atmanirbharta.
* Former Vice Chancellor and Needonomist Professor presently Advisor (Public Finance) 6th State Finance Commission Haryana www.needonomics.com