February 1st turned out to be an extremely significant day for the future of India and its development as a nation. On this day, we witnessed the allocation of the Union budget for the year 2021-22. This budget proves to be even more crucial to the nation as this is the first budget rolled out after the pandemic taking a heavy toll on the economy of India. It is also sui generis because it was presented paperless. In January, the International Monetary Fund had estimated a growth rate of 11.5% for the Indian economy in 2021, in its World Economic Outlook report. The report suggested that India will emerge as the only major economy with a double-digit growth this year, followed by China which is expected to grow by 8.1% in 2021. This report by the IMF augmented the citizens’ expectations manifold.
And to the citizens’ relief, anyone who followed the speech of the Finance Minister, Ms. Nirmala Sitharaman, realized quite early that this budget will undoubtedly meet the expectations of the people and will be instrumental for the much- sought after economic revival after the economy being in doldrums for more than a year.
One of the major inferences made from this budget is its focus on health and well-being. In the budget proposal, the FM announced the ‘PM Atmanirbhara Swasth Bharat Yojana’ with an allocation of 64,180 crore INR over six years to strengthen and further develop the health capacity. She further stated that the scheme will be in addition to the National Health Mission and will focus on developing the primary, secondary, and tertiary health sectors. The scheme aims at setting up more than 17,000 health and wellness centers in the rural and more than 11,000 such centers in the urban areas. In addition to it, integrated public health labs will be set up in 11 states. The FM announced that Rs. 35,000 crores have been allocated for the COVID-19 vaccines which were rolled out earlier this year and more funds will be provided if required.
The second major takeaway is that major outlays were announced towards the betterment of physical infrastructure. It was stated that the government will provide Rs. 1.1 Lakh crore for the Railways and Rs. 1.18 Lakh crore for the Ministry of Road Transport and Highways to increase road infrastructure as well.
The third major attraction is the steps announced to support and promote the micro, small and medium enterprises (MSMEs). The budget has doubled the allocation made out to the MSMEs to Rs. 15,700 crores for this financial year. This will provide a major boost to these enterprises and will place another significant stepping stone towards the fulfillment of the objective of self- reliance by creating an ‘Atmanirbhar Bharat’.
Next, announcing several measures aimed at farmers’ welfare, the FM ensured the commitment of the Modi government towards the agricultural sector and farmers. Talking on the same note, she announced a massive outlay of Rs. 16.5 lakh crore for the sector.
Yet another extremely relevant and major announcement was that the government plans to raise Rs. 1.75 trillion through its disinvestment proposal. As stated, BPCL, BEML, IDBI, CCI, Air India, Concor, Nischal Ispat and Pawan Hans will be disinvested in the current fiscal year and two banks and one general insurance company will be taken up for sale as well. Additionally, the disinvestment of LIC through Initial Public Offering (IPO) is a bold move that would serve to deepen the Indian stock markets.
Equal emphasis was laid on the education sector as well. The FM announced that 100 new Sainik schools will be set up in partnership with NGOs, private schools, and states. The setting up of a Central University in Leh and development of more schools in tribal areas are other pertinent proposals.
Another major point of attraction is that citizens above the age of 75 who only have an interest and pension income are now exempt from filing income tax. Also, startups will get one more year of tax holiday. Plus, to the relief of citizens, no new COVID tax was proposed to overcome the economic recession.
Other key proposals for the development of the nation include the introduction of a brand-new gas pipeline project in the union territory of Jammu and Kashmir. A special scheme for the welfare of women and children in Assam and West Bengal was announced as Rs. 1000 crore is allocated for the tea workers.
Yet another major announcement made was that the upcoming census will be the first digital one in the history of independent India and a sum of Rs. 3768 crores has been provided for the same.
The FM also articulated the introduction of the Agriculture Infrastructure and Development Cess (AIDC) of Rs. 2.5 per litre on petrol and Rs. 4 per litre on diesel. However, this cess will not impose any burden on the consumer as it was also proposed that to reduce Basic Customs Duty on these items. This move to bring additional cess on petrol and diesel by the government is to extract more revenue out of this new cess as it does not have to share such proceeds with the state governments.
By looking at all the proposals mentioned in the budget for the current fiscal year, it can easily be fathomed that the Finance Minister has presented a bold and reformist one. All the major sectors ranging from healthcare, education, industries, and agriculture will enjoy massive boost respectively. This budget allocation is surely a historic one which aims at building a stronger economy and turning India into a self-reliant nation with a speedy recovery. The day when India will emerge as a superpower with a massive GDP of 5 trillion USD doesn’t seem to be a far cry from reality now.