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Budget 2021–22
In the context of the pandemic, we evaluate budget 2021–22 and its six-pillar framework. We found lack of clarity as regards allocations under each of the pillars, and hence we undertook to group ministry-wise allocations under each of the pillars. This categorisation was even more liberal than the one that the finance minister herself spelt out. Despite that, we find that the budget fell short of what was required for problems facing the Indian economy.
The budget for 2021–22 was presented under the shadow of the most significant crisis that India has faced in the last half century. The COVID-19 shock was the culmination of a downward slide in the economy that began in 2016–17 and very little was done to reverse this. In fact, a couple of policy initiatives—one self-inflicted and the other poorly implemented—had worsened the situation. As the budget was being prepared, the following issues were salient:
(i) India had experienced declining annual rates of growth of gross value added (GVA) for four years at a stretch, from 2016–17 till 2019–20. The last multi-year continuous fall in growth rates was from 1989–90 to 1991–92, around the time that economic reforms were initiated.
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