Budget 2021 was riding on a wave of immense expectations, given that the Indian economy was battered to a record low due to structural and cyclical issues, compounded by the impact of the pandemic. To decode what the Budget carried in response to this need, Ms Malini Chakravarty, Associate Director- Research, Centre for Budget and Governance Accountability (CBGA), New Delhi put forth a brief analysis.
She was part of a Panel discussion held on 08February 2021, on the topic, ‘Pandemic & Union Budget 2021: Implementation and the way forward’ organized by IMPRI – Impact and Policy Research Institute, New Delhi and Counterview.
While elaborating on the overall figures of the budget, which increased in outlay from 30,42,230 crores in the 2020 Budget estimate to 34,83,236 crores in the 2021 Budget estimates, she highlighted that this increase is not on account of proposed additional spending but rather includes allocations made towards dues. Hence the fiscal deficit is an overestimation, she added.
On the whole, the Budget saw a considerable slash in allocations to critical social and economic sectors. At a time when the country is battling a health emergency, the core allocations for the Ministry of Health and Family Welfare and the Ministry of Ayush has seen a decline compared to the 2020 Revised estimates.
On the nutrition vertical, the allocation for the new consolidated Mission POSHAN 2.0 in 2021 Budget estimates shows a drop of 18.5 per cent compared to the combined allocation for the four merged schemes in 2020 Budget estimates. Under the education head, there have been no allocations towards the Nation Education Policy that was recently passed. And in the agriculture sector, there is a decline in allocations to the flagship Pradhan Mantri Kisan Samman Nidhi – PM KISAN.
Further, she remarked that despite an increase in violence against women, there is a decline in funding for schemes aimed at their protection and empowerment. Similarly, the allocation for child schemes also saw a drop and there have been no measures for the Accredited Social Health Activist – ASHA workers, Anganwadi workers despite longstanding demands. There is a reduction in allocations for minorities including for scholarship schemes and a severe cut in various schemes targeted at Persons with Disabilities – PwD’s, on whom the COVID-19 impact has been the harshest, she added.
Ms Chakravarty lamented that the Budget does nothing for equitably raising revenues. The focus is on indirect taxation, especially excise, which is inflationary, regressive and counterproductive to the need to put money in the hands of the people and revive the fallen demand.
She lauded the increase in allocations to the Jal Jeevan Mission and the Swachh Bharat Mission. However, she expressed displeasure over the attempt to club this spending under the health vertical to show an increase of 137 percent for health, which is not the case.
Commenting on the disinvestment targets, Ms Chakravarthy noted that the Public Sector Undertaking (PSU) profits have played a huge role especially in the wake of falling tax revenues. So, while disinvesting, there is a need to try and bring in more tax income and stop relying on regressive taxation, she opined.
Ms Chakravarty agreed to the observations of the chair and the other panellists that the Indian economy is facing a demand-led crisis due to which the supply-side incentives put forth by the Budget will not work. There is need to put money in the hands of people, promote growth and redistribution, pump more investment in social sectors like health and education and focus on providing extensive agriculture extension services which can lead to better productivity and income for farmers, she concluded.
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Picture Courtesy: The Financial Express