This year's budget had to be 'like never before' as promised by Sitharaman a few days back and so she fixed it on six pillars - Health and Well-being; Physical and Financial Capital; Inclusive Development for Aspirational India; Reinvigorating Human Capital; Innovation and R&D and Minimum Government and Maximum Governance. Now the question arises that whether it'd be a budget 'like never before' or once again will remain as a series of mini-budgets to resuscitate a sputtering economy of India.
This year's budget has emphasised and acknowledged the importance of a clean environment, proper sanitisation and clean water. For this, the finance minister has considered implementing the Jal Jeevan Mission (Urban) over the next five years with an approximate outlay of Rs 2.5 trillion. Sitharaman's announcement on highway work of 765 kilometres at an estimated cost of Rs 950 billion can be taken as a strategic move ahead of the much-awaited West Bengal elections next month.
Previously, there were also suggestions to break monopoly in the power sector to help the consumers to choose more than one power Distribution Company. This move is also politically relevant for the state where the Calcutta Electric Supply Corporation (CESC) is often pointed out for its monopolising nature in Kolkata. Adding to it, an outlay of Rs 10 billion was declared as welfare schemes for tea plantation in West Bengal and Assam.
Keeping in view the ongoing farmer agitations, Sitharaman, placed a large focus on improving farmers' income and agricultural reforms. For enhancing human capital and to advance educational and skilling infrastructure, a chain of reforms has also been announced. To promote innovation and R&D, uplift to the research ecosystem is also on the cards. The government is also aiming to gradually bring down the fiscal deficit - for FY 2020-21 is pegged to be at 9.5 percent of GDP - to below 4.5 percent of GDP by 2025-26.
During the COVID-19 pandemic, the government had announced various mid-sized packages to revive domestic demand and the issue of consumption demand that has been a major problem in India even prior to the pandemic-hit situation.
However, despite such issues at the backend, the income tax block remains the same in this year's Budget. Although ITR filing has been exempted for senior citizens of and above the age of 75 years with pension income, there has been no relief for the salaried classes, which in turn might not be beneficial in reviving India’s low consumption demand.
No wonder that the Budget 2021 has been one of the most compassionate of sorts, but it wouldn’t be fitting to say that its proposals were “like never before” after analysing it entirely. Now, it is to see whether the suggested reforms will lead India to play a prominent role in the post-COVID economic recovery and help to set the stage for a new world order.