Indian Union Budget 2021-22: Addressing the CII Partnership Summit 2020 earlier this month, Finance Minister Nirmala Sitharaman promised a never-seen-before kind of budget for the next fiscal 2021-22. This bravado may come to haunt her and the government when she presents the budget on February 1, 2021. For, such is the magnitude of the requirement that it is virtually impossible to meet it in any substantial measure.
Even in the normal years, finance ministers find it difficult to meet the aspirations of a billion-plus citizen and countless organisations that depend on government support. The 1991 budget which ushered in economic reforms and the 1997 budget, dubbed as a dream budget by the media, were perhaps exceptions.
Repeating those exceptional feats, much less presenting a budget which ‘100 years of India wouldn’t have seen… being made post-pandemic like this’, seems a virtual impossibility with the economy having taken the hardest hit ever because of the rampaging Covid-19 pandemic that is now threatening to assume more menacing proportions.
The finance minister did add, probably as an afterthought, that it will not be possible to deliver on this promise without the industry’s inputs and wish list -something that the industry and various interest groups give every year anyway. Be that as it may, the industry and other interest groups can be expected to largely seek concessions, financial support, fiscal incentives, and lowering of taxes and duties. Even the common person has similar expectations.
These expectations are legitimate but meeting them requires huge sums of money which the government can raise only through taxation, borrowings, or other assorted methods like disinvestment. There are social, economic, and political limits on how far any government can go in resorting to these measures. One thing is, therefore, clear: the ball is squarely in the finance minister’s court.
In her address to the CII, she made a pointed reference to infrastructure, medicine and biotechnology as sectors that require investment, apart from vocational training and skill development. But these are not the only sectors desperate for budgetary support.