The Union Budget 2021 was a direct reflection of the Economic Survey presented by Chief Economic Advisor Arvind Subramanian two days ago. The government increased spending on healthcare, as the Economic Survey argued that a little increase in public healthcare leads to massive savings out of pocket expenditure of the citizens in healthcare needs.
“I’ve provided Rs. 35,000 crore for COVID vaccines for 2021-22. I’m committed to provide more funds if required. The total budget outlay for Health and well-being stands at Rs. 2,23,846 crore, marking an increase of 137%,” said Finance Minister Nirmala Sitharaman in her budget speech.
The second area of focus was the creation of infrastructure as the Economic Survey argued that the massive spending on infrastructure will not only lead to economic growth but also job creation. On the infrastructure front, the Finance Minister announced the creation of the National Bank for Financing Infrastructure and Development – a new development finance institution to finance infrastructure projects because the majority of the infrastructure projects of the country were suffering due to the lack of funds.
“Infrastructure needs long term debt financing. A professionally managed Development Financial Institution is necessary to act as a provider, enabler and catalyst for infrastructure financing. Accordingly, I shall introduce a Bill to set up a DFI. I have provided a sum of `20,000 crores to capitalise this institution. The ambition is to have a lending portfolio of at least 5 lakh crores for this DFI in three years time,” said the Finance Minister in her budget speech.
Moreover, in the budget, the government announced National Highway works in the poll-bound states – Tamil Nadu, Kerala, West Bengal, and Assam – which will help the people of these states as well as the saffron party electorally. “675 km of highway works in the state of West Bengal at a cost of `25,000 crores including upgradation of existing road-Kolkata –Siliguri,” announced the Finance Minister on infrastructure in West Bengal – the most crucial state for the saffron party in the upcoming assembly election.
The government in the Union Budget has given priority to agricultural infrastructure along with the rural infrastructure to end the rural distress as well as to double farmer’s income by 2022, as promised by Prime Minister Modi. To raise money for Agriculture infrastructure, Agriculture Infrastructure and Development Cess (AIDC) is being imposed by the government on many goods including alcoholic beverages, gold, silver, cotton, peas, apple, petrol, and diesel.
Moreover, the government raised duty on many agricultural products in the budget to protect the farmers of the country from foreign competition. “To benefit farmers, we are raising customs duty on cotton from nil to 10 per cent and on raw silk and silk yarn from 10 per cent to 15 per cent. We are also withdrawing end-use based concession on denatured ethyl alcohol. Currently, rates are being uniformly calibrated to 15 per cent on items like maize bran, rice bran oil cake, and animal feed additives,” said the Finance Minister.
To sum up the budget, the focus was on health and infrastructure. The foundation for further privatisation and upgrading of the regulatory structure was also made to ensure that India moves towards becoming a ‘rule-based capitalist economy’ in the next few years. The budget provides the vision as well as, lays out the roadmap to make India the Vishwa Guru in the upcoming decade.