“HEALTHY” UNION BUDGET 2021
Union Budget
for 2021 -22 – a paperless budget for the first time - was presented in
Parliament on the 1st February amidst sloganeering by the opposition
MPs in post covid-19 time by our Finance Minister Nirmala Seetharaman having to
meet many challenges and also to satisfy the ‘hungers’ of many sectors and
States. During the course of last year, our Finance Minister had implemented
many financial supports to the Industries, Migrant Labourers and Agricultural
Sector due to Covid-19 lockdown which as
per Nirmala were like Mini-Budgets to relieve the pains due to pandemic throughout
India.
Economic
Survey prior to the budget presentation suggested to Nirmala “Play like Pujara and bat like Pant” and
predicted “Nirmala will have both players action on the 1st February
2021”.
Due to
unprecedented pandemic effects on economy and livelihood of people around the
world, the world bodies like International Monetary Fund and World Bank urged
even advanced economies to spend more by
running deficits even when the debt to GDP ratio is poised to rise to 125%.
Nirmala had
listened to these words of wisdom and had taken a path that would fit well to
Indian Economic Scenarios in making her budget.
Two quotes –
one from Rabidranath Tagore and another from Thiruvalluvar – had set the tone
of the budget 2021 to initiate balanced and bold steps to revive the sagging
economy and also to strengthen further the steps to achieve the goal of making
India a $ 5 trillion economy through Make in India and Atmanirbhar Bharat by
2025.
Rabidranath
Tagore’s quote:
Faith is the bird that feels the light and sings, when the dawn is still dark.
Thiruvalluvar’s
Quote: A King or
Ruler is the one who creates and acquires wealth, protects and distributes it
for common good.
Hence
Nirmala with confidence said about her budget as ‘LIKE NEVER BEFORE’.
Modi had rightly acknowledged the budget as “Village, Farmer at the heart of
the Budget, Vikas Ka Vishwas Budget and An Active and not a Reactive Budget”.
Nirmala Sitharaman said the Budget proposals for 2021-22 rest on six pillars viz.
(1) health & well-being
(2)physical
& financial capital & infrastructure
(3)inclusive
development for aspirational India
(4)reinvigorating
human capital & innovation
(5) Research
&Development
(6)Minimum
Govt & Maximum Governance.
It is
heartening to hear from the Budget Experts who observed that perhaps, for the
first time ever, the survey’s writers and the Finance Minister have been on the
same page.
Some
Financial Indicators of the Budget:
•
To
achieve the goal of making India a $ 5 trillion economy –£ 1.97 lac crore over
five years for the Production Linked Incentive (PLI) Scheme to boost domestic
manufacturing.
•
For
Infrastructure, Development Financial Institution to be established – Goal is
to lend at least £ 5 lac crore in three years.
•
£
35,000 crore for covid-19 vaccination programme
- Overall for Health and well being £ 2.23 lac crore marking a 137% rise
over 2020-21 – India’s Big Heart of exporting consignments of vaccines in
sizeable quantities to many countries as free gifts apart from meeting local
demands as against Selfish Attitudes of Economically Advanced Countries such as
US, UK, Germany, Russia, China etc. confining to the narrowism of “Charity
Begins at Home” thereby India earned the status of ‘World Pharmacy’ even
at the thick of Covid-19 Pandemic.
•
Foreign
Investment Limit in insurance sector raised from 49% to 74%
•
Capital expenditure of £ 2 lac crore for
states and autonomous bodies will boost investment, create jobs and economic
recovery. Added to this £ 1.75 lacs crore
divestment target – divestment of two public sector banks and one general
insurer.
•
1957 crore for kochi, 63,246 crore for
Chennai, 14,788 crore for Bangalore – all for metro projects.
•
18,000 crore plan to augment public bus
transport using a PPP model that will enable private sector players to finance,
acquire, operate and maintain over 20,000 buses. – Bus Renaissance is a good post
pandemic recovery strategy.
•
Assam and West Bengal get a special scheme
with £ 1000 crore outlay for the welfare
of tea workers especially women and children. House for All, Cooking Gas for
All, Tap Water for All, Quality and Skilled Based Employable Oriented Education
– have their share in budget expenses.
Many
Budget Experts had predicted that Union Budget this year will have Covid-19
Cess and/or Surcharge, Long Term Capital Gains Tax and Wealth Tax for sure in
view of post pandemic recovery expenses.
Even the Financial Market was certain of these taxes, but, to their surprise
and happiness, there were none. On the budget day, bulls jumped over the moon,
with the Sensex up over 2,300 points, or 5 per cent in one trading day –
banking, finance stocks lead the pack.
The
scrapping of income tax for senior citizens under certain conditions, new rules
for removal of double taxation for NRIs and a reduction in the time period of
tax assessments, an extension in their tax holiday for an additional year for
Start-ups, the advance tax liability on dividend income only after declaration
of payment of dividend were some of the reliefs announced in the budget.
Centre is
going to take steps to amalgamate market laws into single code. To clean up the balance sheets of banks,
Asset Reconstruction Firm or bad bank tasked to take over bad loans of public
sector banks to cope with rising NPAs and also to make them to grant fresh
loans with confidence.
‘One Nation,
One Ration’ card scheme through which beneficiaries can claim their rations
anywhere in the country is very helpful to Migrant workers in particular, as
those staying away from their families can partially claim their rations where
they are stationed, while their family in their native places can claim the
rest. This scheme of the Union Government is being implemented by 32 States and
Union territories, reaching about 69 crore beneficiaries.
Already India was acclaimed as World Pharmacy and Nirmala Budget 21 is all set to make India as ‘Skills Capital of the World’.
To achieve this status,
India and Japan recently signed a Memorandum of Cooperation on Specified
Skilled Workers (SSW) that enables skilled Indian workers to work in fourteen
specified sectors in Japan In furtherance of this initiative, the Hon’ble
Finance Minister in her union budget 2021 speech announced that a collaborative training and
inter-training programme between India and Japan will be set up to facilitate
the transfer of Japanese vocational and industrial skills, techniques, and
knowledge. This will also strengthen people-to-people contact and help in
bringing foreign investments to India and deepening further ties with Japan.
Make in India Concept of Modi Government had started giving rich dividends and India is moving fast towards the status of ‘Manufacturing Factory for the World’.
Manufacturing and the logistics infrastructure like warehousing, roads, rail network and the ports are all set to move to global standards of scale and efficiency and Manufacturing and infrastructure can bring millions of jobs to our people.
The present
budget was praised for its ‘cleanliness’ without resorting to any window dressing
to escalate revenues unrealistically and downplay expenses. Expenditure would
be brought down by simply not releasing payments - such as the Food Corporation
of India would be encouraged to borrow from elsewhere, in lieu of dues from the
government.
But in this
budget, budget math was clean – 9.5% of GDP for 2021 and 6.8% of GDP for 2022
which needs honesty and courage to face criticism due to breaking the fiscal
orthodoxy to keep GDP (Public Debt to GDP – 100%) under check and control.
Though the
IMF and World Bank in the wake of the pandemic advised to depart from fiscal
orthodoxy to practical fiscal index of Public Debt to GDP as high as 125%, Fear
of rating agencies downgrading India if total public debt crossed by 10%/ 11%
of GDP is real, unless the rating agencies have decided to toe the IMF – World
Bank Line on fiscal deficits. Another concern was large fiscal deficit can fuel
a rise in inflation. Still one needs to give credit to Nirmala in presenting a
clean and bold budget, yes, it is ‘like never before budget’.
In the
absence of fresh taxes in the budget, Resource mobilization for spending –
disinvestment, privatization and asset monetization – are all politically bold
steps for the Modi Government, which was steps under the last pillar of the
budget viz. Minimum Government and Maximum Governance.
‘Business of
the Government is to Govern and not do Business’ – has so far succeeded and
even during last year, many infrastructure projects were inaugurated much to
the surprise of many developed countries.
Sale of
public sector assets has become crucial to reduction in fiscal deficits in the
years ahead now. Revenues from disinvestment fallen short of targets – viz.
sale of Air India begun in 2018 still struggling
Large scale
privatization – selling public assets themselves and further not at
remuneratively are politically contentious – Example: Privatization of
companies already put on the block
-Bharat Petroleum, Air India, Shipping Corporation, Concor, etc. due to
low quotes.
Privatization
means large rise in FDI – foreign presence in domestic economies which may be
portrayed contrary to Atmanirbhar Bharat concept.
Hindu
Newspaper had written 3 editorials – first one balanced, next one accusing
Budget 21 as Election Budget – Poll Pot and third as ‘Urban Visions Budget’.
Now for the first time, many articles published by the Hindu especially 2nd
February 2021 Edition appreciated the Budget as ‘Growth Oriented, Clean and
Honest Arithmetic Budget’.
Let me
publish some of the quotes from them as sample of their appreciations of the
budget:
q Budget’s fiscal arithmetic was
perhaps the most credible in recent years.
q Modi, a reluctant privatiser till two years
ago, has clearly crossed a self-imposed Lakshman Rekha and
bought into the idea of getting government out of many businesses.
q Disinvestment and privatization were
resorted boldly without giving room for fear or sentiment.
q The finance minister deserves to be
complimented on presenting the best of what can be done under the
circumstances. Budget is a holistic, integrated and interconnected approach to
health, confidence to do all right things to help the economy development without
losing sight of making India a $5 trillion economy. Even it had the boldness to keep the deficit
levels high for a short window of time.
q Over the years, we have seen bold budgets,
pragmatic budgets, reformist budgets and workmanlike budgets. But this budget
goes far beyond. – Yes, it is
Atmanirbhar Bharat Budget.
q Budget pushes many right buttons, while
focusing on improving India’s mid-term growth trajectory.
q Finance Minister made a brave effort to make
good use of the lessons learnt from the unprecedented global health crisis and
ensuing economic setback to put lives and livelihood back on track.
For the time
being, Luytenswallas, KhanMarketwallas, Leftistwallas and Sickularistwallas –
all could not face the reality of the situations and the steps taken to revive
the enonomy under effective management under Modi Sarkar.
For a while,
forget the budget. Even during the lockdown period, Modi Sarkar had inaugurated
many infrastructure completed projects and given food security to the migrant labourers
and £ 6000 money support to farmers not to speak about many financial
concessions to the industries and individuals.
It is not
Adoni Budget as alleged by Rahul – but AAM AADMI BUDGET.
On careful
reading of the budget one will come to the conclusion that it is ALL AADMI
BUDGET.
THINK INDIA
THINK. JAI HO NIRMALA SEETHARAMAN AND
HER TEAM MEMBERS FOR THEIR ‘LIKE NEVER BEFORE BUDGET’ .
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