Budget : Hopes ,Frowns and Smiles

Presenting a budget that ensures growth and pleases all segments of society is always a tough exercise. It was  a much tougher exercise this time. The   economy which    as such was suffering from a sluggish growth in post demonetization years was severely hit by Corona  pandemic which lead to a  global slowdown and local  lockdown . No   doubt the budget for the year 2021- 22 was presented in   most difficult circumstances. Though it has missing links   and doubtful prescription to heal the  wounds of the economy,     in the given circumstances Finance Minister Nirmala Sitaraman has not done a bad job. Therefore it would not be proper  to term it as a good or bad budget  

The biggest challenge the government faces   at present is to revive the economy and bring it to pre-Corona period.  In fact   the  economy is now caught in a vicious circle of low finance, low production and low demand. The Finance Minister has attempted to break this vicious circle  in her budget exercise. The poor demand and low production   has led to unemployment which in turn has  depressed the demand. To meet this challenge  the Finance Minister has very rightly allocated a big outlay for infrastructure development . While this is expected to restart the wheels of production in core sectors like steel and cement  , generate employment and increase the market  demand it will also lead to deficit financing –something which  is  perhaps  unavoidable in the present circumstances. With some financial discipline if deficit financing can be kept in manageable limits than the  we may as well expect the econowomy to come out of the   present crisis. However, committed to sell off all public  assets this government does not understand that public sector understandings, if properly run , can generate a lot of money to meet the financial crunch. The public sector has been badly managed because of apathy or by design and then has been sold out to private parties.    Instead of raising money by large scale disinvestment of public assets, efforts should have been to raise resources through it . It is difficult to understand that how can  cash rich LIC  face financial difficulties unless unseen forces are sabotaging it from within.    

What impact the Finance Minister’s budgetary provisions will have on the economic scenario at the ground level will be known only in the due course.   However, it can be said with a degree of certainty that while  the budget provisions  have attempted to  benefit to the low income groups they have sorely disappointed the middle class. The well- off sections of society have of course been dealt with a kid glove  in keeping with the pro= rich character of this government .The agriculture sector has expectedly been given some concessions to take the wind out of the sails of the present farmers’ movement and election-bound states have been favoured for obvious reasons. 

The Rs 35,000 crore allocation was necessary and the   increased outlay for health is  welcome.  But  what is really needed is a free health care  scheme for the economically weaker sections of society  and setting up of  clinics and hospital where  they can get treatment without being  fleeced by the pharmaceutical lobby , insurance mafia  and their agents in medical profession. Perhaps no other time could have been more appropriate than the present one to overhaul the health care system in the country.  Like   one nation one ration card   the government may also consider one nation one health card  in the interests of  the poor sections of our society. 

Along with health , education   is basic to building a  strong foundation of a society. However, education has never been an overriding priority of BJP governments. This budget also does not reflect any big concern for it. Setting up an education commission and sainik schools is hardly sufficient for  education in a country where nearly 20 crore students   were  totally deprived of any education in the lockdown period as they had no access to digital devices for on–line education. The fact that there is the need to do much more for the education sector cannot be overemphasized. 

While a higher degree of   deficit financing was difficult to avoid   the Finance Minister should have been more careful to avoid any inflationary trend. Unfortunately not much attention has been paid to this. The  agriculture  cess  on diesel and petrol will have an adverse impact on the price level because of rise in freight rates which will make essential commodities dearer.

 It will not be fair to criticize the Finance Minister for not giving any concessions to our much pampered    middle classes. For one they did not suffer in the Corona lockdown as badly as the low income groups, especially industrial workers, daily wage earners and vendors suffered.  In fact some of them substantial gains   by saving on transport, conspicuous consumption   and social obligations Therefore, in this post lockdown recovery period it will not be a crime   if they are asked   to keep their self interest in abeyance  till   things improve. 

If our middle class, which shares the major burden of running the system  is supposed to make some  sacrifice ,the natural question is  what the rich and super rich sections of society ,whose assets have substantially   grown up in the past few years ,doing for the economic recovery of the country . The corporate sector has got huge tax concessions and loan waivers in the past two years   and it is time for it to come forward when the country is passing through tough times. However,neither   the   Finance Minister has   demanded any matching sacrifice from the rich   sector nor have they offered   .

 Perhaps sacrifice is an old-fashioned term and  in this era of globalization  we should not expect it  from anyone. 

Prof. Pradeep Mathur , Senior journalist , Delhi

Prof Pradeep Mathur
Prof Pradeep Mathur


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