Finance Minister Nirmala Sitharaman has indicated the kind of signs that are visible in this budget (Budget 2021). The kind of provision that is visible for spending in different items, it should be called unprecedented in that sense.
Last updated on: February 2, 2021, 12:53 PM
If you look at the other big provisions of the budget, the provision of two lakh 87 thousand crores for urban water life mission is remarkable. Of course, the lack of water for drinking and irrigation and the quality of water are among the biggest problems today. It is worth mentioning that the WHO’s concern about the quality of water has been mentioned in the budget speech. It is a matter of giving one lakh 97 thousand crores for self-sufficient India. However, it will be reviewed later as a clear assessment of the impact of the huge self-sufficient packages brought before the budget is yet to be done. Prior to the budget, the Prime Minister had also indicated that this budget would be an extension of self-sufficient packages in the last financial year.
Where will the money come from?
There is no need to look at this front more closely now because when the fiscal deficit has been sensationally reported as 9.5 in the current financial year and 6.8 for the next year, it means that the expenditure of income is very high. The decision has been taken. This tip can be considered according to the indication of the Finance Minister that in which he said that this budget will be unprecedented. If we recognize the steps taken indirectly to manage maximum funds, then the announcement of LIC IPO should be considered a big thing. If people invested as expected to buy LIC shares, the government would consider it to be an increase in private investment. Apart from this, the intention of disinvestment of government companies and raising the limit of foreign investment should also be considered in the management of funds. All these arrangements of money are still as expected. The government will have to be constantly engaged to fulfill this expectation. It is also worth noting that in order to increase income, the government seems to be avoiding raising direct taxes.
What for agriculture in the budget?
There was speculation about something unprecedented in the budget this time for agriculture. Of course, this sector of the economy is considered important in terms of the size of its workforce. There is a huge mention of 16 lakh 50 thousand crore in this budget for agricultural loans. In order to increase the convenience of agricultural credit, the government will have to constantly take steps to fulfill such intention in the budget. However, the way the present government has been announcing relief packages in the form of mini budget even after the presentation of the budget, it should be accepted that there is a scope for further major announcements for agriculture. In particular, there is a provision of 73 thousand crores for the rural employment scheme MNREGA. Initially there was a provision of 61 thousand in this item in the budget of last year, which was later increased to one lakh crore through the relief package. That is, it should be assumed that in the new self-sufficient packages, MNREGA can get more money.What about unemployment?
There may not be a big announcement on this front, but the way it is intended to continue spending heavily on road schemes, it can be assumed that this work will generate employment. Anyway, in the odd circumstances on which the budget this time has come, there was no scope for huge expenditure on any major scheme to tackle unemployment. The government has already argued that increasing expenditure increases employment. That is, by telling the amount that has increased in items like health, railways, water mission, the government can claim that this will increase employment opportunities.
How much concern about inflation?
The budget is considered to be the document that determines the economic condition and direction of the next year. No government avoids spending too much on income because inflation increases due to flow of more money. But despite the huge relief packages in the current financial year, inflation has not increased in the country. The reasons for this are not clearly known, but it is certain that demand is not increasing in the economy. Obviously, even after spending too much in this budget, there is not much concern about inflation so far.
Emphasis on public transport means environmental concern
Of course, to reduce the global concern about environment, emphasis is being placed on public traffic all over the world. Even though there is only a provision of 11 thousand crores on this front, a logic has definitely been made to say on the world forums.
Overall, this budget will be considered unprecedented in this regard because the government has decided to spend more and more by compromising the financial deficit. The verdict is brand new. Therefore, the loss of this big decision cannot be estimated immediately. For this, you may have to wait for a few years, not a few months. (Disclaimer: These are the personal views of the author.)
First published: February 1, 2021, 3:02 PM IS