ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Union Budget 2021–22Subscribe to Union Budget 2021–22

Fiscal Compression, Jeopardised Recovery, the Humanitarian Crisis and Reforms

This paper assesses the impact of the budget on the economic recovery, debt dynamics and fiscal–monetary policy interaction. It also looks at how the budget has addressed issues of lives and livelihoods. It concludes by noting that the fiscal stance of compression in the 2021–22 budget has jeopardised an already faltering economic recovery that is now jeopardised by the second wave of the pandemic.

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.

COVID-19: Examining the Impact of Lockdown in India after One Year

One year after its announcement in March 2020, the consequences of India’s strict COVID-19 lockdown measures and ineffective policy responses continue to be felt, be it in terms of livelihood loss and economic downturn or increased marginalisation of vulnerable sections of society.

Union Budget 2021–22: Is Capital Expenditure Enough for an Economic Recovery?

The Union Budget 2021–22 seems to be relying on capital investment-led growth for an economic recovery. But such an approach neglects those sections of the public that were the worst-hit by the COVID-19 pandemic.

Cooperative or Coercive Federalism

The purpose of this article is to throw light on certain provisions of the Union Budget 2021–22 that have diluted the spirit of cooperative federalism in the country. These setbacks for the states will eventually push them at a subordinate position vis-à-vis central government, defeating the core...

Labour, Livelihoods, and Employment in the 2021–22 Union Budget

Coming in the midst of the immense damage inflicted on the Indian economy by the COVID-19 pandemic, the 2021–22 Union Budget needed to perform the unenviable task of compensating households for massive livelihood losses as well as stimulating economic growth while maintaining some fiscal discipline. As it turned out, the government chose to focus on the second and third goals and largely ignored the first.

Budget 2021–22 on Health

The budget speech on 1 February 2021 announced an allocation of over `2.2 lakh crore to health and well-being, at 137% higher compared to BE 2020–21. The Fifteenth Finance Commission emphasised the need for strengthening the COVID-19-ravaged health sector by recommending sector-specific grants. The government did not accept the recommendation and, if we discount the health component in the local government grants, the budget allocation for the sector has increased by hardly 10% compared to the 2019–20 actuals.

Budget 2021–22 and the Manufacturing Sector

The growth rate of manufacturing value added has been declining continuously since 2016–17 and it had become negative in 2019–20, even before the intensification of the Covid-19 crisis, suggesting that the budget needs to address the structural weaknesses of the economy. The 2021–22 budget has largely adopted the supply side corrective measures in the form of increased capital expenditure on infrastructure. The potential of infrastructure investment in reviving the sector and the implications of the proposed resource mobilisation for financing the increased capital expenditure are discussed. In the context of increased global fragmentation of production, the feasibility of promoting domestic production through tariff protection is also discussed.

Green, but Not So Green

The pandemic, the climate crisis, and crisis in agriculture call for sustainable solutions, which are acknowledged by NITI Aayog, but did not find a thrust in the budget. A positive growth in agriculture during the pandemic shows its resilience, but it is intriguing that food inflation remained high and its possible link with the three farm produce laws should not be overlooked. It is worrying that crop loans for input-intensive production are non-serviceable.

A Bonanza for Corporates

And a trickle-down approach to reinstating livelihoods will mean a K -shaped recovery.
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