Development Through Six Pillars: Budget 2021
Shashank Vikram Pratap Singh
Assistant Prof.
Shri Ram College of Commerce
University of Delhi.
Honorable Finance Minister (FM) Nirmala Sitharaman
presented the third union budget of Modi government 2.0 at a time when India
along with the world is witnessing one of the biggest health crises of
centuries. Covid-19 lead staggering negative growth; historical slowdown in
major sectors and overall destabilized macroeconomic variables would have made
the unusual exercise of budget preparation for the key personal at the ministry
of finance in the North Block. FM and her team had the responsibility to bring
back the lost glory and stimulate the growth and reestablished the sense of
achieved wellbeing, social fabric and community capital among the people of the
county.
To achieve
these ambitious aspirations, FM set six pillars namely: Health and wellbeing;
Infrastructure; Inclusive development; Development of Human Capital; Research
and development; Minimum Government and Maximum Governance.
India’s position on these pillars – reflected through
various indicators; has been pathetic vis-a-vis health of the economy. As per
the latest available data; India stands at 144th position out of 153
countries in Happiness index; 62nd
out of 74 emerging economies in inclusive development index; 116th out of 174 countries in the human capital
index; 131st out of 189
countries in human development index: 48th in the list of top 50 innovating counties in
global innovation index; 129th out of 158 countries in inequality
index. These numbers are signaling highly alarming positions and draw serious
attention of policymakers for hasty policy interventions. Through the current
budget affords have been made in this direction which should be applauded but
that’s is not enough.
The size of
the budget for Financial
Year 2022 (FY22) is Rs. 34.83 lakh crore (15.6% of
GDP) which is Rs. 4.40 lakh core more than the Budget Estimate (BE) of FY21.
Meaning hereby, the government is going to spend 14.50 % more in FY22 than what
it has planned to spend in FY21. The higher spending will support demand and
help faster recovery. To boost
investment, Rs. 5.54 lakh core (about 2.5% of GDP) has been kept for capital
expenditure (Capex) which is an impressive increase of 34.5% over budget estimate
for FY21.
The revenue
receipts for FY22 has been estimated to Rs. 17.88 lakh crore which is Rs. 2.32
lakh crore less than the budget estimates for FY21. Thus, the fiscal
deficit-GDP ratio is estimated to 6.8% for FY22 against estimated 3.5% and revised
9.5% for FY21. Thus, the statement of account of GoI conveys a common message-
more government expenditure and highly ambitious about net tax revenue of Rs. 15.45 lakh crore which is 15% more than revised
net tax receipts for FY21.
In
accordance with the stated six key pillars, funds have been allocated for
various scheme to concerned departments and ministries. Rs 14.33 lakh crore has
been estimated for scheme expenditure (central sector schemes Rs 10.52 +
centrally sponsored scheme Rs. 3.81) and Rs. 20.50 lakh core for transfers,
establishments and other expenditure.
When the country is facing a once-in-a-lifetime health crisis fiscal support for
vaccination and healthcare is a highly important fiscal stimulus. The budgetary
allocation for the health sector is whooping Rs. 2.84 lakh crore which is a rise
of 137 percent. Out of this Rs. 35,000 crore earmarked for Covid-19 vaccines.
Such expenditure on vaccination drive will bring people out of fear of being
infected by the virus. This will help in the steady and fast revival of tourism
and hospitality sectors. The revival of these sectors will bring back jobs for
millions of unemployed due to Covid-19.
The fund allocation for the ministry of
education has been cut to Rs. 93,223 crore from Rs. 99,311crore. The fund for the
Department of School Education has been reduced to Rs. 54,873 crore from Rs.
59,845 crore in the previous budget. Same as the case with the Department of
Higher Education the allocation has gone down to Rs.38,350 crore from Rs.39,466
crore. This reduction come at a time when student community and educational
institution deeply impacted by the pandemic.
The spending on education has remained stagnant over
the last many years. The economic survey 2020-21 reported that spending on
education remained 2.8% of GDP during 2014-19 and increased to 3-3.5% in the
2019-21 period. Ideally, this ratio must be 6% of GDP.
Education is the most powerful weapon to achieve
satisfactory progress among all the key parameters of six pillars. The epochal
and sanctified writing of Vedas and Upanishada eloquently describes the power
of education. In Rigveda it is viewed as – “something, which
makes a man self-reliant and self –less” and in Upanishada-“Education is
that whose end product is salvation.” Reducing fund for this sector is
really a matter of disappointment and short-sighted but making policies beyond
the GDP as reflected in the six pillars is a farsighted move and must be
appreciated.
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