New Delhi: The Union Finance Minister, Nirmala Sitharaman presented Budget 2021-22 attaching highest priority to development and making huge provisions for government spending, for this purpose. The courageous decisions taken to provide an impetus to the economy, which has slowed down due to the Coronavirus crisis, are considered the budget highlights. There are enormous provisions for health, infrastructure, agriculture and defence sectors. The prevailing tax structures have not been changed in the budget. Moreover, no new taxes have been imposed on ordinary citizens. But while making the huge provisions for the expenses, necessary for development, the fiscal deficit has increased. But Finance Minister Sitharaman asserted that there is no need to worry about it, as of now.
The lockdown imposed given the Coronavirus pandemic had a detrimental effect on the Indian economy. But there was a dire need of maintaining the health of the people in the country. But people from the industry and agriculture sector were focused on the Budget 2021-22, presented while the pandemic is ebbing. As expected, huge provisions have been made in the budget to bring the economy on track and increase development speed. There is an increase of 137% in the provisions for health and cleanliness. This provision becomes significant, given the strain on the health systems, in the country, due to the Coronavirus pandemic.
Simultaneously, the defence expenditure has been increased by 19%, in view of China’s tension. In this, ₹1.13 trillion has been reserved for the purchase of new weapons and other defence equipment. The foreign investment limit in the insurance sector has been increased from 49% to 74%. Major announcements have been made, even in the agriculture sector and special attention has been paid to developing infrastructural facilities linked to agriculture. The budget has a special initiative for the development of infrastructure. Road construction and port development have been given special importance. At the same time, while making a provision for the railways, major investment is envisaged in new rail lines. Confidence is being expressed that the economy will benefit from this. But the fiscal deficit will be big when such huge provisions are being made. But Nirmala Sitharaman justified the budget saying that prioritising development is important than worrying about the fiscal deficit. Sitharaman clarified that the discipline to maintain a low fiscal deficit would be followed in the future. Although additional cess has been imposed on petrol and diesel, it has to be borne by the petroleum companies. Therefore, the costs will remain the same for the common customer.
The Coronavirus pandemic has presented the country with a different opportunity. Some economists believe that the government has tried to exploit that opportunity through this budget. This budget is a step in the right direction. The economists have opined that it was necessary to take some courageous decisions to tide over the Coronavirus pandemic crisis.