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Saturday, June 19, 2021

BUDGET 2021 – 22 : THE RIGHT ELIXIR FOR A SELF RELIANT INDIA

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The Budget 2021 was presented by Finance Minister Smt Nirmala Sitharaman on 1st February 2021. In the backdrop of a massive pandemic like COVID 19 which ravaged economies and disrupted the forces of production like no other disaster in the past, all eyes were on the Budget. Heightened expectations of a pandemic struck nation seems to have factored well in the mind of the government which sought to provide succor to the citizens by presenting a well-balanced budget accommodating the aspirations of different sector as well as addressing their concerns.

The Budget rests on 6 pillars :

  1. Health and Well being
  2. Physical and Financial Capital, and Infrastructure
  3. Inclusive development for Aspirational India
  4. Reinvigorating Human Capital
  5. Innovation and R&D
    6.Minimum Government and Maximum Governance
  6. Health and Well Being :

The most significant aspect of this budget is its acknowledgement of the need for a robust and resilient health care system. The Finance Minister has allocated a massive Rs 2.23 lakh crore for the health and wellness sectors, a massive 137% jump which will transform the health scenario of the country in a revolutionary manner. The priority of the government seems to be in tune with the ground realities as it seeks to chalk out a holistic approach by integrating the programs and policies of various ministries. Health outcomes are dependent on the performance of various other indicators like sanitation and drinking water, nutrition and vaccination. Hence, the efforts have to be coordinated to complement the achievements. So, allocation of Rs 35,000 crore for Covid vaccination, the launch of POSHAN 2.0 for accelerating nutritional support, prioritizing on potable water supply to 4378 urban local bodies and 500 AMRUT cities by launching Jal Jeevan Mission 2.0 is the step in the right direction. Expansion of primary, secondary and tertiary health care capacities and augmenting facilities in Tier 2 and Tier 3 cities is a heartening step with the announcement of a new centrally sponsored scheme called PM Aatmnirbhar Swasth Bharat Yojana. Indeed, a self reliant India has to be a healthy India.

  1. Physical and Financial Capital, and Infrastructure

Wealth Creation has been the central focus of the budget as envisaged by the Economic Survey Report. Promoting self reliance by giving fillip to domestic manufacturing through the Aatmnirbhar Production Linked (PLI) is something which every promising Indian entrepreneur looks for. 13 sectors have been identified for which PLI schemes have been announced with an ambitious objective of inclusion in the global value chains supported by cutting edge technologies which will not only diversify our manufacturing base but will provide quality jobs to our youthful demography. Similarly, to enable our textiles sector to become globally competitive and attract investments, a Mega Investments Textile Park (MITRA) will be set up in addition to PLI scheme.

Infrastructure is the life blood of any economy. The present government has been performing really well on this front, whether in terms of completion of existing projects or expediting new ones. Continuing with the spirit, the government has proposed a capital outlay of Rs 1.10 lakh crore for the Railways, the national transporter of India – the highest ever budgetary allocation so far. The Finance Minister announced that the government intends to transform railways as a ‘’Future Ready’’ mode of transportation by 2030 by bringing down logistics cost significantly by improving the efficiency and punctuality of trains. The much billed Eastern and Western Dedicated Freight Corridors (DFC) is expected to be commissioned by June 2022.
A big push to the road sector also highlights the importance accorded to highways with many states like West Bengal, Assam, Tamil Nadu and Kerala getting a lion’s share of upcoming highway projects and strategic linkages with proposed corridors like Mumbai – Kanyakumari. The budget rightly emphasizes on urban mobility with substantial allocations to give momentum to urban public transport system like city buses and metro trains on priority basis in some of the important cities of the country. This will facilitate the shift from personal vehicles to public transport, thereby reducing environmental pollution. Also the proposed policy of scrapping old vehicles causing pollution has been welcomed by auto sector as a step towards sustainable development.

  1. Inclusive Development and Aspirational India The government is committed towards the welfare of farmers through the agricultural and allied sectors , rural development and financial inclusion and social security of migrant labourers . The government has increased MSP for various crops significantly and is committed towards ensuring food security for all and better price realization for farmers. To facilitate structural transformation of the agri sector, greater thrust has been laid upon integrating mandis through eNAM , provision of agri infra fund to APMCs for upgrading infrastructure of Mandis, increase in funding for Rural Infrastructure Develoment Fund and Micro Irrigation Fund.

Finance Minister has proposed substantial investments in the development of modern fishing harbours and fish landing centres. Initially, 5 major fishing harbours – Kochi, Chennai, Vizag, Paradeep and Petuaghat will be developed as hubs of fisheries signaling towards tapping the potential of blue economy and leverage economies of scale.
The government, taking cue from the migrant labour crisis induced by Covid 19 lockdown has come out with the idea of collecting data of workers engaged in gig economy so as to enable them avail various welfare schemes aimed at them like the portable ration card scheme and provide a cushion against negative externalities like the pandemic or natural disasters. Women will be allowed to work in all categories with adequate protective gear and proper shifts. Higher allocation to MSME sector and encouraging SC/ST entrepreneurship are the right triggers towards an Aatmnirbhar Bharat.

  1. Reinvigorating Human Capital

The Finance Minister has added that about 15,000 schools will be qualitatively strengthened on the lines of the vision delineated by the New Education Policy (NEP). She also announced to set up 100 new Sainik Schools in partnership with NGOs/private entities. Higher Education Commission of India (HECI) has been proposed for accreditation, regulation, funding and standard setting of higher educational institutions. For accessible higher education, a Central University will be established in Leh, Ladakh.

To ensure social justice and inclusive education, the government has proposed to open 750 Ekalavya Schools in tribal areas and enhanced the allocation of Post Matriculation scholarship to benefit about 4 crore SC students. Similarly, skilling and training projects are underway with UAE and Japan to boost the start up ecosystem of the country.

  1. Innovation and R&D

Innovation is the keystone of a NEW INDIA. Hence, the budget has rightly proposed the creation of a National Research Fund (NRF) with an outlay of Rs 500 crore over the next five years to be dedicated towards research on national priority thrust areas on Sciences, Technology, Social Sciences and Humanities.
Government will undertake a new initiative named National Language Translation Mission (NLTM) which will enable the policy related knowledge available in major Indian languages. Also the Gaganyaan Mission is training four Indian astronauts on Generic Space Flight aspects in Russia. The New Space India Limited (NSIL) will execute the PSLV – CS51 launch carrying the Amazonia Satellite from Brazil along with a few smaller Indian satellites.

  1. Minimum Government, Maximum Governance

This has been the mantra the Modi government ever since it assumed office. To fast track reforms and improve governance, the Finance Minister announced a slew of measures being taken to reform the tribunals and ensure speedy delivery of justice. A new allied health professionals bill has been introduced in the Parliament to ensure transparent and and efficient functioning of 56 allied healthcare sectors.

The government is determined to reverse the impact of novel coronavirus pandemic on the economy by reviving growth and continue the path of fiscal consolidation and reducing the fiscal deficit level below 4.5 % of GDP by 2025-2026. The government has done well in honoring the principle of Fiscal Federalism by accepting the recommendations of 15th Finance Commission by allowing the borrowing for states at 4% of GSDP for the year 2021 – 2022.

The Budget is inspiring confidence and rekindles hope amid a challenging context. How far it goes in transforming the promises into actual policies will depend on the proper implementation of the budget in letter and spirit. In its nature and substance, the budget seems to provide the required dynamism and essence to the mission of Self Reliant India.

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