Budget 2021-22 was an chance to bridge the variations amongst the Government and the Opposition. It was also an chance to make amends to sections that felt wronged by the policies, actions and inactions of the government such as the abjectly poor classes, farmers, migrant workers, the MSME sector, the middle class and the unemployed. The most deserving had been left to their fate. Since I had no expectations, I have no disappointment, but millions of other individuals really feel cheated.
The Budget has aggravated the divide amongst the quite wealthy and all other individuals.
Budget is Contextual
There is a rule in Tamil grammar: Place, Subject and Opportunity are wasted like a lamp in the hands of a particular person without the need of sight. It implies that actors and actions ought to be judged by the spot, topic and chance (time). It is the context that determines the merit of a selection. The Finance Minister was presenting Budget 2021-22 beneath extraordinary situations characterised by:
· two years of declining development price (from 8 per cent to 4 per cent) in 2018-19 and 2019-20
· one year of recession starting on April 1, 2021
· enormous disruption in the lives of everybody, particularly the poor who constitute, on typical, 30 per cent of every single village, panchayat, town and city
· millions pushed under the poverty line and burdened with mounting debt
· millions who had lost their jobs or livelihoods
· 64.7 million who dropped out of the labour force of them 22.6 per cent had been girls
· 28 million actively seeking for a job and
· an estimated 35 per cent of MSMEs that have closed down permanently.
Apart from the above financial elements, there are two other challenging details: (1) China’s illegal occupation of land belonging to India threatens national safety and (2) substantial investments need to have to be produced to augment wellness infrastructure.
Failed on all but one
It was in this context that I had listed two “non-negotiables” and a “10-point wish list” (see ‘No expectations, no disappointment’, The Indian Express, January 31, 2021). After examining the Budget documents and reading the FM’s speech, my score card reads as follows:
Non-negotiables: /2
Wish list: 1/10
The only point on which the Budget gets a ‘Pass’ is ‘increase (in) the government’s capital expenditure’ (topic to deeper scrutiny).
The Budget failed the Armed Forces of the nation. The FM did not utter the word ‘Defence’ in her 1-hour-45-minute speech, which was unprecedented. The allocation for Defence in 2021-22 was Rs 347,088 crore as against RE of Rs 343,822 crore in the existing year — an raise of just Rs 3,266 crore. Allowing for inflation, the allocation is reduced in the next year.
On wellness, the FM was also clever by half. She proudly announced that the allocation was getting elevated by 137 per cent from Rs 94,452 crore to Rs 223,846 crore in the next year! The bluff was referred to as inside hours: the Budget division had disclosed the correct numbers in the ‘Budget at a Glance’ (web page 10). They are RE 2020-21:
Rs 82,445 crore and BE 2021-22: Rs 74,602 crore. Far from an impressive raise, there was a reduce in the allocation! The conjurer had quietly added the one-time expense of the vaccination programme, the allocation to the Department of Drinking Water & Sanitation and the FC grants to the states for Water & Sanitation and Health to enhance the quantity!
Keeping the two non-negotiables aside, the FM did not have a type word (not to speak of dollars) for the 20-30 per cent of households at the bottom of the economy or for the MSMEs and their unemployed workers. She did not announce sector-distinct revival packages for ailing sectors like Telecommunication, Power, Construction, Mining, Aviation and Travel, Tourism & Hospitality. She did not lower the GST prices on the contrary she slapped cesses on a variety of goods, which includes petrol and diesel, that dealt a blow to states’ finances. On every single count, other than capital expenditure, she failed the folks.
Bury FRBM, pander to wealthy
Even on capital expenditure, there was absolutely nothing bold or imaginative. By March 31, 2021, the FM will borrow an further sum of Rs 10,52,318 crore, but the further capital expenditure will be only
Rs 27,078 crore! We might add grants in help for creation of capital assets, which was an further Rs 23,876 crore. The rest was accounted for by the raise in income expenditure of Rs 3,80,997 crore, the shortfall in income receipts of Rs 4,65,773 crore and the shortfall in disinvestment proceeds of Rs 178,000 crore. Contrary to the FM’s claim that she “spent, spent and spent” her way to the fiscal deficit (9.5 per cent), the truth is she did not gather the tax and non-tax revenues that she had budgeted for. Nor could she include income expenditure inside the budgeted quantity. She had no decision but to borrow to fill the gaps.
The poor, the migrant labour, the everyday wage earner, the modest farmer, the owner of the MSME, the unemployed (and their households) and the middle class felt cheated. They poured out their disappointment in the social media because the newspapers had no space for them or their champions.
I shall not deny there was a calculating head that directed this ‘bury-FRBM, pander-to-the-rich’ Budget but, without the need of a shadow of doubt, there was no heart.