Finance Minister Nirmala Sitharaman has presented a budget which hopes to give impetus to growth and recovery of economy. The pivot around which this will be done is an expenditure of 7.5 lakh crore on capital expenditure which is 35% more than the last year. At the same time it is conservative for the fiscal deficit which is projected as 6.4% against 6.9% of GDP in the present year. Though the essence of the budget lies in the details and methods of implementation, it still arouses some hope and PM Gati Shakti Yojana with seven engines of mostly transport sector may create jobs. Rs.1 lakh crore to the state government for capital expenditure will boost the economy at local level. Rs.2.3 lakhs have been earmarked for micro and small enterprises as they have still not caught up with the recovery. Rs.50,000 crore guarantee cover to the sector is in the same spirit. Extension of one-year tax incentives to start-ups will help this segment. In all infrastructure and small manufacturing sectors provide large employment out of agriculture.
– The government has been under pressure due to farmers agitation and now it has earmarked 2.7 lakh crore for MSP for the purchase of wheat and rice. Of course this amount will be cornered by the rich farmers of Punjab and west UP who were represented by the agitationists. This is clearly keeping in view incoming state elections. For the rest of India’s farmers some schemes for food processing and organic farming and production of fruit cultivation have been announced as routine. Linking of five rivers and increasing the irrigation cover in long-term will definitely help the farmers
– Rs.5 lakh crore as cover have been provided to hospitality sector which has been the hardest hit during the pandemic period. This will boost tourism and provide jobs in the service sector.
– For the rural poor PM Awas Yojana with an outlay of 48,000 crore will keep this scheme going. Expenditure on education especially e- content on 400 channels will also benefit the rural children. Outlay on health and creation of health portal will also benefit the poorer sections of society. There is nothing spectacular for the middle classes in this budget.
– It is now very evident that India cannot be lagging behind in the technology. The government in next financial year is going to boost the expansion of 5G services and will start auction of spectrum soon. There is some emphasis on providing funds for research. In a big announcement RBI has been authorised to issue crypto currency and simultaneously making the policy clear that digital assets will be taxed at the rate of 30%.
– The foremost expectations from the budget is to provide jobs to the harassed people who are looking for it for the last two years or even before that. There is a genuine expectation that the personal consumption will increase while keeping the inflation under tolerable limits. At the same time all this has to go hand-in-hand with higher growth of economy if possible with GDP growth of 8% or so.
– Nirmala Sitharaman this time had a rather comfortable stepping stone. The economic survey has brought out that the economy is somewhat a shade better than what it was before the start of gloomy pandemic days. Slightly better estimate has come for the contraction of 2020–21 at 6.6% while the growth estimated for 2021–22 is 8 to 8.5%. This shows that economy is roughly 1.5% better than March 31, 2020. The fiscal position is also somewhat comfortable with greater collection of corporate tax and GST. This has given Sitharaman some room for expenditure. The prevailing situation shows that stimulus packages of 2020-21 have some impact on improving economy including MSME sector. This also reflects some effectiveness of mass immunisation by vaccines.
– Nirmala Sitharaman seems to have done her spadework well and presented a balanced budget for growth and jobs. However in my opinion prices Phil rise sharply creating hardships for poorer section. We have to watch budget’s details and implementation.
