Union Budget 2021-22

Описание: Union Budget 2021-22 had to bear a unique burden of expectations to put India back on a recovery path following a deep recession induced by Covid-19 and the consequent lockdowns.

A significant slump in consumption demand even prior to the pandemic, while tackling an unenviable fiscal deficit heightened by the crisis is no easy task!
Expectations were soaring for the government to aid sectors that needed an urgent push to bounce back, such as tourism, hospitality, etc., while at the same time farsightedness was required to increase the competitiveness of industries such as pharmaceuticals, and precision tools, among others. The Budget this year had to be one "like never before", as was promised by the Finance Minister a few days back.
The dismal backdrop with which the budget proposals were presented entailed massive contraction in the GDP by 23.9 per cent in the first quarter and a contraction of 7.5 per cent in the second quarter of FY 2020-21.
This contraction has been associated with a concomitant decline of the various developmental indicators characterising an unprecedented nadir of the economy since India's economic liberalization in the early 1990s.

Despite the three Atmanirbar Bharat packages and the RBI measures to resurrect the moribund economy, there was already an expectation that under such exceptional circumstances all tenets of fiscal disciplines will be breached in the Union Budget 2021.
And, rightly so! Hence, despite having a revised estimate of fiscal deficit of 9.5 per cent of GDP in 2020-21, and budget estimate of the same as 6.8 per cent in 2021-22, the government aims to gradually bring down the fiscal deficit below 4.5 per cent by 2025-26. While the FM has shown the intention of moving in the right direction, the question is: in what way will this spending help achieve the broader developmental goals?

PART 1
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