02/02/2021
Budget 2021..
Drips vision and commitment to Social Justice.. At least on paper...
Budget 2021 was slated to be a ground breaking and "Revolutionary" Budget. It is an extraordinary budget as coming out of a Global Pandemic, that threw all planning and structures to the wind, the Budget of 2021 had quite a few issues to address.
Employment effective distribution of resources across the classes and incentivization of creative thinking and at the same time balancing Deficit.
The budget has proved its mettle in some areas and certain new initiatives taken up are rather unheard of and progressive.
Let's get to them right away. One of the key aspects i have liked was a strong effort to be transparent and be ready to be held accountable. This intent is strongly portrayed in the in the Union Budget app introduced and promoted by the Ministry of Finance.
What truly caught my attention was that there is a segment that outlines the "Implementation of Budget Announcements 2020-21". This feature might have been available before, but it never crossed the public eye and as usual our media never discussed it as well. I particularly liked the detailing of the PM-KUSUM scheme that emphasised the need to move into alternative sources of power (from Diesel to Solar)for pump-sets used for irrigation. This could further be converted into a income source for the farmers as they could sell the additional power back to the grid. Details of this is available on Page 5 Para 23(3).
What are the key Budget concepts??
There were a number of new and refreshing concepts addressed in the Budget. One that has been rather bold and essential, is probably the increase of FDI limits from 49% to 75% in the Insurance Industry. This would give a much needed relief to the Industry that was reeling under claim pressures during the Pandemic. It is an extremely profitable industry as the insurance pe*******on in the population is hardly 12-18%. There is a vast majority of people that are still out of the Insurance net and that could mean a robust revenue base for the Overseas companies pitching in. So this is a welcome move, that needs to be implemented after discussion to ensure necessary entry-exit framework.
'Aatmanirbhar Bharat' is probably one of the most ambitious proposals that has been envisioned by any Indian Government in a really long time. It will open up a million opportunities for India, It will not only project us as self reliant but will elevate us to a position of Global Alternative, something that so many western and European countries are looking for. This goal is as difficult to achieve as it is pioneering. But one thing it is not is "IMPOSSIBLE".
The push on enhancement of Health services (especially the preventive health category) is a great lesson learnt, although for the attention that was being given to them, our Public Health services have done a fine job during the Pandemic year to relieve, contain and restrict the Spread. A boost to the sector especially the Public sector will go a long way in reducing the services parity and minimize occasions of exploitation at the hands of Private Medical Service Providers. Improvement goal for Health services in Rural India is a definitive first. There are many miles to go in this direction.
Industry received a lot of allocation in this budget, understandably so. 13 Sectors have been allotted 1.95 Lakh Crores through the Production Linked Incentive Scheme (PLIS) to generate Global leaders in its categories. Being a big part of the Aatmanirbhar Bharat initiative, it has been allotted this finance spread over the next 6 years. Visionary, and effective, the only flaw, a little incentivization should have been linked to employment generation and technological enhancement. Another initiative linked to Industry is the Voluntary vehicle Scrapping policy. This will help select auto manufacturing players to be able to rely on Indigenous raw material and thus lower costs.
Infrastructure, got a handsome boost, be it Highways, Metros, railways, Ports, Shipping, even a decent boost to PNG is proposed through the Governments Ujjwala scheme. This is probably the only place where indirectly employment generation will get some precedence, especially the unskilled and unorganized public.
There is not much to discuss regarding Investment and Taxation, as absolutely no changes have been proposed in this segment except that Senior Citizens above 75 years need not file returns any more.
These are some of the out of the box innovative ideas that this budget has thrown open. They are great ideas and undoubtedly forward looking, but in all this the key lies with effective implementation. This has been our greatest worry since the first decade after Independence. Implementation has been the biggest bone in our way. It still continues to be so. Lets hope this year is different. Another key that I felt was left without too much emphasis was focus on employment generation or job creation. The incentives and subsidies extended to Industry should have been marginally clubbed with this intention and that would result in Companies focusing on employment generation.
Fiscal deficit at 6.8% of GDP, is rather high for an Import oriented country like India, but this is hardly the time to discuss this, in a year like this distribution of liquidity has to take precedence. In that respect, there are no regrets. Having said that, it should not be a reason for the Government to get complacent, they will have to continue to target lower deficit and move out of negative Growth territory.
So All in all, Unicorn Consultants applauds the NDA government and the Finance ministry for a genuine effort on giving the country a Visually progressive Budget. But as we said earlier, its not what we announce but what we implement and achieve that results in Sustainable growth and Social Order.
