Union Budget: Balancing Pragmatism and Populism pressures
Presenting the annual budget in a crisis year and keeping everybody amused is an exercise akin to street-charmer’s ‘tight rope walk’. You will get applause at the risk of breaking a leg, if you fall before reaching the other end. Union finance minister Nirmala Sitharaman’s (FM) budget presented in Parliament today has attempted many maneuvers to come up to the expectations of various sections of Indian public. Yet she seems to have addressed demands and aspirations of most of them without adding to their burdens.
The fiscal 2021-22 has seen many pressures on Indian economy viz., return of the Covid-19 with Omicron variant, free vaccination to 100 crore plus population, free food supplies to half the population, deceleration in most industries, halt to aviation and transport sections. Even 14 month long farmers’ agitation over 3 Agricultural laws kept the governance on edge. The finance minister had the herculean task of meeting its expenditure demands with most sectors suffering low production.
Yet riding over the positives of Economic Survey, supported by excellent exports and GST collections, the FM has presented a growth budget with exemplary prudence and provided reasonable incentives to needy sectors. She promises to bring down fiscal deficit from 6.8% to 6.4% despite making additional provisions for MSP purchase of food grains (2.37 lakh crores), MSMEs, StartUps, etc.
Among the positives of the budget are generation of 50 lac jobs, digital dealings in MSP purchases, increased priority on Defense purchases from domestic manufacturers, Jal Jeevan Mission, enhanced budget for Housing, Gas and fertilizer subsidies, E-Passport and proposal to launch Digital Rupee.
On Crypto currencies, the Finance Minister preferred to smell the future trends and opportunities, she made it a timely revenue source. Taxing it as virtual Assets @ 30% is a timely opportunity for any finance minister to buttress revenue and ‘look progressive. ‘ To match the opportunity, Rupee as Digital Token will offer a safe opportunity to crypto enthusiasts.
Marking River basis for organic farming in some UP districts is also an opportunity for farmers diversify their crop basket and make opponents of Agricultural bills jittery.
Industry leaders and expert economists have appreciated the FM for not succumbing to populistic election politics and avoiding any freebees to 5 states going for election in February-March 2022.
Among the negatives, Madam Finance Minister had little to offer for middle class, in Tax reduction, price control or GST slabs review as was demanded by some sections. Senior Citizens had expected some sops like tax reduction on Interest or raising exemption limit, which FM ignored. Un-organized sector of workers has no sops in the budget.
Although the Budget 2022-23 has pleased most sections and experts, it remains to be seen, how the economy moves in the post-Covid era, if the current wave subsides as early as Summer of 22. Health, Aviation and Transport, industrial revival would be sectors under watch in the year under review.