Budget 2021 – Are the “pillars” anchored well?

On 1^st Feb 2021, Finance Minister of India, Ms Nirmala Sitharaman started unfolding her Budget 2021 by quoting Tagore, “Faith is the bird that feels the light when the dawn is still dark,” adding that this moment in history is the dawn of a new era, where India is well-poised to be the land of promise and hope”. While ditching the long-standing tradition of carrying budget document in leather briefcase and instead carrying a tablet in red colored cover with golden national emblem saying “Bahi Khata”, we aniticipated the upcoming budget to be breaking many more norms. 

Adding more to our expectation, our Finance Minister echoed the agenda of inclusive development and growth by stating that the budget was woven around six prominent pillars, which included health and well-being, physical & financial capital & infrastructure, Inclusive development for aspirational India, reinvigorating human capital, innovation and R&D and the principle of minimum govt and maximum governance. 

Part of budget emphasizing on ‘Sankalp of Aatmanirbhar Bharat’, seemed to set the tone for social sector push and towards inclusive development, which is critical if we want to leverage the demographic dividend and become a well-equipped and healthy India. Given the current state of the economy, with decelerating growth, slump in rural demand and low employment creation in rural areas, a focus on the social sector could certainly be the key to achieve better economic growth. 

While it is heartening to note that the government has presented an inclusive tone to the Budget with a strong focus on the health, agriculture, rural development. Citing Budget 2021 to be coming in the “unprecedented times”, government announced a total spend of around Rs 2 lakh crore on healthcare, Rs 35,000 crore for the Covid-19 vaccine. Adding more to the it, new centrally sponsored scheme PM Aatmanirbhar Swasth Bharat Yojana shall be launched with an outlay of Rs 64,180 crore over 6 years for Health and Wellness Centres, Setting up Integrated Public Health labs in all districts, Critical care hospital blocks, Strengthening of NCDC.

Taking extra steps to ensure healthier, cleaner and greener India, Government has allocated 2217cr towards ensuring cleaner air. Ujjawala Scheme to be extended for more 100 districts and more one crore beneficiaries ensuring green energy to them. Framework for power consumer with an option to choose discoms shall be put in place,  Jal Jeevan Mission Urban with an outlay Rs 2.87 lakh crore over 5 years and introduction to Comprehensive National Hydrogen Energy Mission are also a highlight towards greener India.

In another welcoming step, National Education Policy also got mentioned in Sitharaman’s Budget speech. Asserting that the policy got a good reception, the FM said, “Over 15,000 Sanik schools to be qualitatively strengthened under National Education Policy with cohesion between NGOs, experts and civil societies. Adding the highlights from last year’s reforms, it is hoped that policy backups will strengthen the sector to achieve the targets of quality education and employable skills. 

With an increase in allocation to rural infrastructure development from Rs 30,000 crore to Rs 40,000 cr in FY21, government has attempted to address the challenges, of rural people. Amidst increasing uprising from Farmers over the Farm bills, FM announced various schemes for the benefit of farmers, and what may be called a wish list. Reiterating commitment towards doubling farmers’ income by 2022, a number of measures have been announced for farmers to make farming competitive and sustainable. It includes the MSP regime has undergone a change to provide 1.5 times the product cost across all commodities, agricultural credit will be increased to 16.5 lakh crore, the scope of the 'Operation Green Scheme' to include 22 perishable crops, and 1.68 crore farmers have registered. Also, 1,000 mandis to be integrated under the said scheme, Also the total amount paid to wheat farmers was doubled in 2019-20 when compared to 2013-14. Development of fishing harbors and fish landing centers along the banks of rivers and waterways is also proposed, trying to add livelihood option for marine line villagers.

Considering the post-Covid scenario, the FM announced that the '1 nation-1 ration card' plan has been implemented by 32 States and UTs. Migrant workers, who were the most hit segment after Covid, stand to benefit from this scheme as they can claim ration from anywhere in the country. 

Taking added efforts towards benefit of unorganized laborers and women in the domain, Sitharaman also proposed a portal to collect info on gig-workers, building and construction workers. Social security benefits shall be extended to gig and platform workers. Minimum wages shall apply to all categories of workers. Women will be allowed to work in all categories and also in night shifts with adequate protection. Government proposed to launch a portal to collect relevant information on gig workers, building/construction workers among others. It’ll help formulate health, housing, skill, insurance credit & food schemes for migrant workers. 

With the above measures and other highlights, like constructing more state highways and National highways under Bharatmala schemes, exempting elderlies above 75 years of age from pension taxes and filing ITR, rationalizing custom duties, increase in fuel prices and reduction in gold, silver and copper prices, etc. the budget is like a rainbow vision which is still far in the horizon for poor people who look for something more tangible to make their ends meet. 

While the budget looks promising for future, resource allocation for important sectors seems to be inadequate and the budget lacks clarity on short term relief measures to address the gnawing issues of unemployment and underemployment of youth, lack of jobs, low farmers’ income, agrarian stress, which are the major factors responsible for declining economic growth. Of course this is the budget of unprecedented times, for 12.2 crore people who lost their jobs, for the Indian economy, which lost around 30 lakh crore during Covid. Even for the suffering middle class, there’s no relaxation from income taxes. As the economic uncertainty and mayhem continue, the vital question remains, are the ‘pillars’ standing fast?

Disclaimer – The opinion expressed in the article are of author’s own and do not reflect the view of CSRBOX