Budget today, booster shot needed to revive economy

Tribune News Service

New Delhi, January 31

Finance Minister Nirmala Sitharaman on Monday will present the Union Budget that is expected to provide relief to the pandemic-hit common man as well as focus more on driving economic recovery through higher spending on healthcare, infrastructure and defence amid rising tensions with neighbours.

As India emerges from the Covid crisis, the ninth Budget under the Modi government, including an interim one, is widely expected to focus on spending for job creation and rural development, generous allocations for development schemes, putting more money in the hands of the average taxpayer and easing rules to attract foreign investments.

From initiatives in health to a new public sector policy, the government will use the Budget to paint the picture of an economy on the revival path. The Prime Minister and the Finance Minister have both already hinted that there will be announcements for various sectors.

Fifth crisis-era Budget

• This is the fifth time since Independence that a Budget is being presented against the backdrop of a full-year of recession
• The recession of 1957-58 was because rains failed. In 1965-66, a fall in farm output & costs of ’65 war led to negative growth
• The recessions of 1972-73 and 1979-80 were due to a combination of factors. This is the first time that manufacturing and services have seen a steep fall

First half of session to end on Feb 13

• The first half of the Budget session will end on Feb 13, instead of Feb 15 (as planned earlier)
• A consensus on the issue was reached at an all-party meeting called by Rajya Sabha Chairman M Venkaiah Naidu on Sunday

The government this year has ample room to borrow to make up for the massive loss of direct tax revenue and non-tax income such as disinvestment, where it missed the target by a wide margin.

The challenge before the government is to generate resources to increase growth and maintain the distribution of welfare benefits. As the Economic Survey has amply hinted, the government will be attempting to raise borrowings in the form of debt.

After presenting the Budget in 2020, the pandemic months saw Sitharaman continue the process with almost a dozen press conferences — some to announce relief measures, others to deliver economic policy statements.

The situation did warrant such intra-Budget interventions because the demand-driven slowdown that led to large-scale unemployment and income loss began even before the pandemic.

No hard copies, budget on App

A “Union Budget mobile app” will make Budget documents available in the public domain this year. Finance Minister Nirmala Sitharaman had dispensed with the practice of using a briefcase to carry budget papers while presenting her maiden Budget last year.