Union Budget 2021: Nirmala Sitharaman ready with 'economic vaccine', India hopes big amid COVID aftermath
New Delhi | Jagran Business Desk: Finance Minister Nirmala Sitharaman is all set to deliver on Monday her promised “like never before” Budget, the ninth under the Modi government which includes an interim Budget and the first one amid the COVID-19 crisis. It goes without saying that the Budget will focus on providing relief to the pandemic-hit common man while ensuring economic recovery through higher spending across sectors.
It is likely that the government will try to pull the economy out of the trough through higher spending on healthcare, infrastructure and defence amid rising tensions with neighbours.
Also, the Budget is widely expected to feature announcements aimed at job creation and rural development, generous allocations for development schemes, putting more money in the hands of the taxpayer and easing rules to attract foreign investments.
While the middle class is expecting some big tax sops, the experts believe that the government does not have much scope to make big announcements, owing to the heavy expenses that will be incurred in handling the pandemic and the inoculation drive.
Prime Minister Narendra Modi, with the beginning of the Budget Session, has already said that this year's Budget will be a part of the Rs 20 lakh crore economic stimulus package announced by the government last year.
While the pandemic is showing signs of being less virulent, a gradual progress in the vaccination programme is fuelling hope for a better future. A sustainable economic revival will need a policy catalyst. That's where this budget assumes a special relevance.
The pandemic struck at a time when the economy was already caught in the grip of a growth slowdown. GDP growth touched an 11-year low of 4 per cent in 2019-20. A steadily declining investment rate has been a major factor in causing deceleration prior to the coronavirus crisis.
Among the most-watched figures in the budget would be the expenditure on vaccination in FY22 which could be shared among the central government, state governments and households.
India has started the largest vaccination programme in the world from January 16 and is using two vaccines – Covishield and Covaxin.
Also, to be watched is the revenue that the government is projecting to receive from the privatisation of companies such as Bharat Petroleum (BPCL), Air India and Shipping Corporation of India (SCI).
Market borrowings are expected to remain elevated and external deficit financing would increase.
Higher capital expenditure outlay for National Infrastructure Pipeline (NIP) programme that has an aggregate investment target of Rs 111 lakh crore over the period 2020-25 and making recently introduced Production-Linked Incentive (PLI) scheme more attractive to lure foreign manufacturers to boost domestic manufacturing are top expectations from the budget.
Also, more support to real estate given its backward-forward linkage in the economy especially affordable housing segment, boosting micro small and medium enterprises, reprioritisation of both revenue and capital expenditure towards essentials such as top priority to mass vaccination/public health, reprioritisation of expenditure and mobilisation of higher non-tax revenue.
The budget will come as an economic vaccine for the pandemic-battered economy and steer India with the much-needed stimulus to boost demand, consumer confidence and at the same time boost the purchasing power of the people, the Indian Chamber of Commerce (ICC) said, adding incentives to industries like textiles, apparel, leather, food processing, construction and retail are expected.
(With PTI inputs)
Posted By: Abhinav Gupta