The Union budget of 2021 or the budget of minimum government, maximum governance is a new path for the old vision of Atma Nirbhar Bharat. This dream of better governance was first seen by late Shri Arun Jaitley in 2015, and from then, has been carried forward in various avatars. Make in India, and then, make for the World in India has been a voice of our nation for the past few years.
I say this because the exports from India have been on a continuous rise from the last few years. There has been a constant upsurge in access to global markets and has witnessed better integration with global value chains. This is a reflector of more openness and rising demands. Data reflects the export value to be 27.5 Billion USD in Feb 2020, which decreased to 10 Billion USD by April 2020 due to pandemic. But the interesting fact is it was able to regain its position to 27 Billion USD by Dec 2020. Further, an increase in expenditure for infrastructure would support an already increased demand of Indian pharmaceuticals and engineering in the world.
Let us take a glance at the priority sectors of this budget. Health sector has got the most recognition with respect to the previous year. The percentage upsurge in health from 2020-21 BE to 2021-22 BE is 10.55%. This could have been brought looking at the health insurance penetration in India after the pandemic COVID-19. It must be noted that the insurance penetration in India is lower than the global average, but a high expenditure in health via different schemes and modes, is certain to bring India in the range of healthy countries. Health comes along with several other allied fields like Health and Family Welfare, Health Research, AYUSH, Drinking Water and Sanitation and Nutrition. And it becomes important to mention that all these sectors combined showed a wondrous increment of 48% in the budget.
Fertilizer, food, commerce and Industry and Rural Development have been on the plus side of the budget. On the contrary to that Education, Agriculture, IT and Telecom had to face down as there is less expenditure in these sectors when compared to past year.
How is the government planning to collect the revenue then becomes an important question. The revenue projections in the previous budget were sharply slashed down from Rupees 1.33 lakh crores to rupees 33,737 crore in the revised estimates. In the current budget, it has increased to Rupees 53,986 crores which the government is aiming to collect from the Telecom sector. Telecom refers to 5G and multiple 4G bands that become the pinning hopes for the government. It has targeted to earn the revenue of Rupees 4, 65,674 crores from Telecom.
There have been several talks on the increase in deficit in Foreign Direct Investment. Let us remind ourselves that despite India’s improved ranking in the ‘Ease of Doing Business’ Index from 142nd position to 63rd over a period of 5 years (2014-19), India is yet far to achieve its potential as an FDI destination. Foreign investment of our nation is highly concentrated in a few geographies including Mumbai, New Delhi, Bangalore, Chennai, Ahmedabad, Hyderabad and few sectors. Budget 2021-22 increased the permissible limit for FDI in the insurance sector from 49% to 74% with safeguards and control – This is a landmark proposal, especially in the current circumstances.
Understanding high need and then spending in the Bad Bank is another milestone of this budget, yet the implementation of such a dynamic and uneasy thing is another big challenge for the government. Analysing and then taking few data into consideration, this budget brought the growth of nominal GDP of 14.4% of the GDP, total expenditure growth of 17.17% of GDP, and even Revised Expenditure of 15+ % of GDP. Fiscal deficit increased to 6.8% from 5.1%. Capital expenditure was at 2.43% in 1996 and was decreased to 1.55% from 2005-06 after the change of 15th Commission in 2004-05. It became another milestone when it again increased by around 1.15% in this budget.
This reveals it as a budget of High debt, high deficit, and a parallel high growth.
What I liked most of this budget is that the expenditure is most of the increment type rather than the handouts type. This is good in the sense that an amount of Rupees 1000 would have remained 1000 even after a year but depositing it in the infrastructure has the potential to make it 2500 in near future.
Also, there is a positive sign for good privatisation by leasing out or selling off the waste and unusable lands of government institutions like the Railways. Now, it becomes very important to implement it correctly and manage it properly.
I see an almost flat graph in Agriculture from 5-6 years; also, the government only gave a marginal increase in Revised Expenditure in Research and Development and Innovation. I believe this should have been increased significantly.
I also believe, as digitalisation has become the need of the hour, and almost all the sectors are highly dependent on it, it must have received a priority. High investment is required in this sector currently because if any country lacks in digitalisation today, it will become very probable for it to not be able to stand in the future too.
This budget is none less important and unusual than the great budget of 1990. There has been great expenditure in the infrastructure which ultimately signifies the growth of India in near future as it would result in more FDI, and also development of the domestic markets of India. Job employment is likely to increase by manifold, today for the construction, and tomorrow for getting a salaried job in that organisation. The motto at which India stands, of Self-sufficient and Self-reliant India could be achieved easily and proudly if India implements properly in all the sectors it paid attention to in this budget.