SANJAY THAPA
The union budget presented today by the Finance Minister Nirmala Sitaraman was a plain vanilla Covid hit budget. While emphasizing a V shaped recovery the budget pegs a higher nominal GDP growth at 14.4 per cent for 2021-22 – but it has to be remembered that the estimation comes on the back of a lower base for 2020 wherein the economy has slipped into recession for the first time in four decades.
This clearly means that all the macroeconomic computations will be over-hyped given the low base bias and would mean higher govt borrowings over and above the BE estimates of Rs 12 lakh crore for 2020-21. Even though the inflows from RBI’s dividend, PSU disinvestments – including a 74 per cent sell off of LIC and telecom license fees is taken into account yet it will have to seen how much fiscal space will be filled up. With this even the the fiscal deficit figures is projected to have a positive bias even as the fiscal deficit target for 2021-22 has been projected at 6.8 per cent. With little room to maneuver with shrinking revenues the FM has projected a positive spin assuring pick up in the economy with two vaccines already in place.
Cheered by the low mortality rate as well as high recovery rate of Covid affected the, FM Nirmala Sitaraman has kept her optimism high and not imposed a Covid cess as was being widely expected particularly in the higher income tax payers. Even as she has desisted from awarding any concessions on the IT front she has not done any tinkering with direct taxes apart from exemption for filing ITR for persons above 75 years of age. The FM recalled that in the post budget announcements last year she had given a substantial relief to salaried class and the Covid affected .workers under the PM’s Atma Nirbhar Bbhaarat scheme.
A Agriculture Infrastructure Development Cess has also been proposed to introduced on fuel and liquor which will be use to develop the agriculture sector, said the FM. A higher allocation to the infrastructure sector has been justified to enable more job creation in the post pandemic scenario where the employment has risen to about 10 percent as of December 2020. As expected a 137 per cent hike in allocation for the health sector has been announced pegged at Rs 2.23 lakh crore over the Rs 90000 crore made last year. The Jan Ausodhi kendras and network of hospitals in the country are to be enhanced through this higher allocation.
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