At a time when the economy needs a massive fiscal push, the union finance minister Nirmala Sitharaman presented a fiscally conservative budget that refuses to give any fillip to public investment.
1. The total outlay in the budget stood at 34.83 lakh crore, incrementally higher than 34.50 lakh crore as per the revised estimates for the year 2020-21. The real outlay will be lower in the next fiscal compared to the current financial year if inflation is taken into account. Thus, the finance minister has to indulge in fiscal jugglery to claim that the budget is fiscally expansionary. Even the Revised Estimates of Government’s expenditure in 2020-21 of 34.5 lakh crores represents inflation of the actual expenditure, and till the end of December 2020, only 22.8 lakh crores has been spent.
2. The finance minister claimed a 137 percent increase in the budgetary outlay on health and wellbeing. This gives an impression that the budget gives a massive push to health spending. Misled by the FM’s jugglery, even the media gave it a huge thumbs up. But, in reality, the Budget 2021-22 has allocated Rs 74,602 crore almost 10 percent lower than the revised estimate of Rs 82,445 crore earmarked for health spending in the current fiscal year. Then, how did the FM arrive at the magic figure of 137 percent?
The minister has claimed a 137% increase in the budgetary outlay on health and wellbeing by including a one-time expenditure of Rs 35,000 crore set aside for the COVID-19 vaccination program, Rs 60,300 crore budgeted for the department of drinking water and sanitation, as well the Finance Commission’s grant for both water and sanitation and health totalling to almost Rs 50,000 crore.
3. Despite claiming that the budget aims at reinvigorating the human capital, the allocation for mid-day meal scheme has been cut down by Rs 1400 crore from what has been spent actually last year. In ICDS, the allocation has been reduced by 30% compared to allocation in last year’s budget. In jobs& skill development, the allocation has been cut down by 35% compared to allocation in the last budget. This is when the recent National Family Health Survey( NFHS – 5) has shown an increase in malnutrition in the period 2014-19.
4. The states have been further deprived of their legitimate share in the central resources with the union budget imposing fresh cesses. Total transfer of resources to states and UTs has gone down in this budget from last year’s revised estimates by more than forty thousand crores.
5. The provision for food subsidies is reduced by 41% in 2021-22 as compared to 2020-21.
6. In 2020-21, the budgeted allocation for agriculture was Rs 134349 crore, which has fallen to Rs 122961 crore in 2021-22. There has been an overall reduction of 8 % in allocations towards agriculture even in nominal terms.
7. Finance Minister’s speech did not have a single mention of MGNREGS. The Scheme has proved to be an essential lifeline under Covid for the rural poor and returning migrants. The budgeted estimates under the scheme for 2021-22 have been slashed significantly by 34 percent as compared to the revised estimates of 2020-21.
8. The allocation for PM-Kisan has been reduced from Rs 75,000 crore in the budget estimates of 2020-21 to Rs 65,000 crores in the budget estimates of 2021–22.
-By Prof K Nageshwar