Amid the COVID-19 pandemic which shattered the backbone of Indian economy, all eyes are now fixed on the Union Budget 2021 set to be presented in the Lok Sabha on Monday, 1 February. On Friday, when the joint session of Parliament kick started Prime Minister Narendra Modi’s said that the 2021-22 budget is the extension of the 3-4 mini budgets that had already been announced by Finance Minister Nirmala Sitharaman in the last few months. This Union Budget will be Finance Minister Nirmala Sitharaman’s third budget under the National Democratic Alliance (NDA) government.
With the COVID-19 vaccination in the backdrop, the budget is likely to boost the expenditure on public health bridging the gaps in the health infrastructure of the country. The Economic Survey which sets the economic context for a Union Budget, has estimated a growth of 11% for the economy, making it a V-shaped recovery in terms of growth. Keeping a tab on the International Monetary Fund’s forecast, India is expected to be the fastest growing major economy with 11.5% growth in 2021-22 and 6.8% growth in 2022-23 in the whole world. The survey also gave insights on inflation which might be moderated in the upcoming months. Coming back to GDP, the survey has stressed an increase from current 1% to 2.5-3% in the public health sector.
The budget is also likely to help in uplifting the real estate sector that was one of the hardest hit by the COVID-19 pandemic. Next sectors that are expected to be benefitted by the Union Budget are education, employment generation, urbanisation and tax relief.
With the outbreak of COVID-19 in India, education became the second biggest adversely impacted sector in India. The education system was already in a hanging state even before the COVID-19 struck, but the situation worsened manifolds. The nation awaits to know what the budget holds in store for bringing education back on track.
Next comes the real issue of unemployment and generation of employment. The current persistent graph of steady unemployment in India mirrors the sorry state of social order. India has been struggling with high levels of unemployment for last several decades. What the Union Budget can promise is a standardised focus on financing the social securities which in turn will ensure employment generation.
With more than half the population residing in the urban areas, there is an immediate need for the Indian urban areas to grow and prosper. If the real India needs to enjoy growth, the per capita GDP has to rise. Hence the budget needs to pay heed in transitioning the urban cities into a broad-based modern economy to achieve urbanisation in the real sense.
As far as the context of tax relief is concerned, it is very unlikely that any massive tax relief will be on cards because the government is already struggling to meet ends.
The Union Budget scheduled for Monday will go paperless as the Ministry of Finance has decided not to print the documents of the budget in view of COVD-19 pandemic making it a historic event in independent India. In the last two consecutive terms, Nirmala Sitharaman was seen carrying a bahi-khata, a ledger wrapped in a red cloth while presenting her financial budget. Sitharaman ditched the briefcase while breaking away from long-standing traditions of colonial-era for her presentations.
With the Budget 2021 being critical considering the financial effect the pandemic has brought about, it will be intriguing to perceive how the Finance Minister offsets public expectations with the plan to invigorate request and restore the dwindling economy.
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