The Hindu Newspaper Analysis – 02 February 2021

The Union Budget 2021-22

budget
  • The union budget for 2021 has been presented and this seems like a good effort of the Govt and we have seemed to learn from the lessons and aim to provide a better economic and such conditions for the people.
  • The Govt has finely provided a push to the health sector of the nation but more of this was needed and in general it cannot be called as a transformative budget.
  • We need to note that the expenditure for healthcare has been pegged at ₹74602 crore which was lesser than ₹82448 crore which was estimated.
  • The Govt has also set aside ₹35000 crore for the COVID 19 vaccine, also ₹60000 crore for drinking water and sanitation. The Govt has also spoken about universal access to drinking water, sanitation, hygiene among others.
  • Pradhan Mantri Atma Nirbhar Swasth Bharat yojana has been provided for with an outlay of ₹64100 and this could play a key role in primary, secondary and even tertiary healthcare for the people.
  • The total expenditure outlay has been pegged at 33000 crores ₹.
  • The fiscal deficit has been pegged at 9.5% of the GDP and the capital expenditure has been given priority with 5.51 lakh crore ₹.
  • With overall reduction we cannot call this budget an expansionary one.
  • Govt seeks get a revenue of ₹1.75 lakh crore from disinvestment.
  • The privatization of two PSBs and one general insurer has been envisaged and IPO of LIC has also been put forward.
  • The Govt has also provided for FDI in insurance sector and increased ownership at 47% with specified safeguards.
  • The Govt has also envisaged the National infrastructure pipeline with asset monetization pipeline which will help in creation of jobs by construction of highways, ports, airports etc.
  • The Govt also aims to create a Bad Bank to consume the bad finances aided by an asset reconstruction company and asset management company.
  • Also, it sets aside ₹20000 crore for recapitalization of banks.
  • We need to note that in the previous year the overall revenue declined by 23%, tax revenue by 17.8%, non-tax revenue by 45% but post the previous October the Govt undertook expansionary spending to rectify the same.
  • It is estimated that post budget the overall design will go up by 15%, tax revenue will go up by 14% and the non-tax revenue will go up by 15.4%.
  • The Govts expenditure on the health sector has been well but the expenditure on defence has reduced from 4.05 lakh crore to 4.01 lakh crore rupees.
  • The authors of an opinion says that all these schemes will be well be benefitted and done if executed in the right way, also points out to the sectors like tourism, power, real estate that has been focused upon in the budget.
  • Another opinion provides that the anganwadis have not been given importance or are rather being clubbed under other schemes to give primacy.
  • The expenditure on the National Nutrition mission has become lesser than what was estimated and some schemes like Pradhan Mantri Matru Vandana Yojana also the Beti Bachao Beti Padao have not been given primacy.
  • The pensions for widows, old age persons, person with disabilities have not been provided in the right way.
  • Food subsidy has been provided for but it doesn’t necessarily mean that there is equitable distribution of food. It has been only done to clear the arrears of the FCI which is also a good thing.

All in all, we can that some aspects like direct employment creation, the migrant labor crisis, inequality, and others have not been catered to but the budget has its own pros and advantages and will surely impact the economy well in the right way.

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      Dr. RS Aggarwal
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