BUDGET ANALYSIS 2021-22

                         The  fundamental driving force of an economy is it's strategic intervention in the 'Resource allocation' which is scarce and having alternative uses to meet the unlimited wants of a large population .2021-22 Budget of India is not only a financial plan to allocate the resources efficiently but also a well formulated policy to resurrect the disrupted Indian economy .The impact of the pandemic is obvious from the -23.9% & -7.5% GDP growth rate(2020)  in the first and second quarters. The unprecedented shutdown of the economy stalled the production and exports ,supply chains were crippled , Inflation and unemployment rate skyrocketed and we  suffered a disastrous economic crisis along with a health emergency .That is were the 6 pillars of this budget - - health and well-being, physical, financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D and minimum government and maximum governance is expected to hold on Indian society .

                       With the focus of Atmanirbhar Bharat , the budget have given keen importance to Infrastructure .It expanded the 'National Infrastructure Pipeline ' up to 7400 projects . It introduced 3 measures also to boost the investment such as -increasing the capex,development financial institution and asset monetisation .The DFI will invest more than 1 lakh crore /- in the next 5 years  .This share of the budget is regarded worthy because 'investments in infrastructure boosts employment thus purchasing power , will revive demand and production ,thus supply and exports further nourishing the industry of the raw materials .So as experts argue ' a virtual cycle of growth or REVIVAL growth can be aimed at investing on infrastructure . But on the other side it is a long term process and it's adequacy in the current scenario have to be noticed. 

                   An Another important component of infrastructure is 'power' . Among them  the  'National hydrogen energy mission 2021-22 which aims at the generation of hydrogen from green power sources is worth mentioning .This will be  a sustainable venture since we can shift to renewable energy sources from  fossil fuels during its production.The Ujjwala scheme from 2016 is a perfect example in this context which provided subsidies for the families to replace other fuels with cleaner fuels and this controlled a major issue of indoor pollution which caused 2/3 rd of infant deaths .In this budget 1 crore additional beneficiaries are covered under this scheme . Like that , India is already generating 6 million tonnes of hydrogen but with fossil fuels . This sector is monopolistic also  under the Discoms .So this budget, connected to 'electricity(rights of consumer)rules 2020 ,decided to provide the consumer alternative choices and to erase the negatives of being monopolistic .

               The MITRA scheme( mega investment textiles parks) proposed to make Indian textile industry globally competitive with large investments is effective to empower semi-skilled labourers . It will boost employment and exports in the competitive market,also it may help our nation to compensate the opportunity cost of foreign trade agreement . PLI- Production linked incentives now increased to 13 sectors with an allocation of 1.97 lakh crore /- for 5 years will motivate the industries to flourish . Another significant idea in this sector is 'PPP'-public private partnership in the operation of ports , bus transport etc . But the implementation of this plan will be efficient only if we address the negative impacts of privatisation also. At the same time National rail plan 2030 is scheduled to increase the private participation thus increase the transport through rail to 45 % from 27% . The major aim of all these schemes should be to reduce the cost of logistics . Because for India this is 12 to 14% where as for china it is only 6 to  7 % .  

               The financial capital sector is witnessing sea changes in this budget. The consolidation to a single rationalised ' single market code' and the regulation of securities brought under SEBI are some important proposals . The FDI in insurance sector is planned to increase upto 74% so that it could make more investors ,make a competitive market which brings premiums down and thus increase the penetration of insurance in India . But as of now in India ,LIC only owns 70% of the market share .So this move is expected to bring a positive change .The inclusion of new proposals about gold exchanges is intended to create a centralised market of gold and thus convert India as a global leader in determining selling price .This policy may be a success since India is the second largest consumer of gold. The deposit insurance act amendment and recapitalisation of about 20,000 crore rupees  under the banking sector are one of the most discussed areas . A major part of the experts argue that compared to Non performing assets this amount is insufficient .

               While discussing about NPA's it is quite relevant to discuss about Asset reconstruction companies and Asset management companies .ARC's will purchase the NPA's for cash and security receipts termed as 'bad banks' .But there are criticisms about the investors,haircut price and under recovery also  argues that it is simply transferring the NPA's from one balance sheet to another one.But the Insolvency& Bankruptcy code with almost same objectives is taking years to resolve this issue . Another important term which attracted debates is ' Disinvestment' , that is selling the government owned public sector enterprises . Now 1,75,000 crore rupees is the estimated receipt but strong objection exists that GoI cannot gain expected revenue from this process. Thus it is important to analyse about the new policy of strategic disinvestment .

               Amidst the farmer protests , Agriculture schemes like Swamitva ,issuing property cards which will resolve land disputes and help them to make it collateral etc is relevant .Also 'Operation green scheme ' including 22 perishable products ,that is from TOP to total ,micro irrigation funds ,Agriculture infrastructure development cess (by reducing customs) and supportive schemes for cotton etc are formulated for their welfare . I think it is the lockdown period which enlightened us about the miseries of migrant workers and the 'One nation ,One ration scheme and  the new portal to collect their data is its outcome. The major share in the health care was one of the major attraction of this budget especially the PM Atmanirbhar swasth Bharat yojana . Tax holiday ,tax exemption and reduction of marginal requirements will nourish the start ups and will nourish entrepreneurship.

                 Even the faceless income tax appellate tribunal,dispute resolution committee ,tax incentives for IFSC and regulations in tax assessments were accepted by the public, the lack of reforms in income taxation have raised concerns .While analysing the revenue sources the pandemic severely affected the tax revenue and at the same time increased borrowings . The budget financials are also optimistic in nature .

' We believe in peace and peaceful development ,not only for ourselves but for people all over the world '

 - Lal Bahadur Shastri 

keeping this in mind ,let's unite to revive INDIA.