A country’s financial budget is a systematic representation of how it operates and is a defining factor of its reputation. The Indian Constitution does not use the word budget, rather it is stated as the “Annual Financial Statement”. This first Union Budget of British India was presented on 7th April 1860 by Sir James Nilson, and that of independent India, on 26th November 1947 by R.K. Shanmukhan Chetty.
This year on 1st February, Finance Minister Nirmala Sitharaman delivered her 4th annual budget and the 10th under the Modi government. Before we get into the intrinsic details of this year’s budget, it is important to understand from where the Indian government attains most of its income.
35% of India’s reserves come from borrowing and other liabilities. GST, Income Tax, and Corporation Tax constitute 16%,15% and 15% respectively. 7% comes from Union excise duties and another 5% from Customs and Non-Tax Revenue. Thus a majority of India’s resources come from the taxpayers and loan lenders only.
One of the most important points mentioned was the prediction of the Indian economy’s estimated growth rate, set at 9.2%. This is the highest growth rate for any recovering economy, as confirmed by the International Monetary Fund(IMF). The backbone of this year’s budget was the auspiciousness of India entering Amrit Kaal, that is in 25 years, we will be celebrating 100 years of our Independence. With this in mind, the Finance Minister set out certain milestones we hope to achieve as a country before 2047.
The budget’s index is comprised of four important areas-PM GatisShakti, Inclusive Development, Productivity, and Financing of Investments.
On India’s 75th Independence Day, Prime Minister Narendra Modi announced that the Centre will launch ‘PM Gati Shakti Master Plan’, a Rs. 100 lakh-crore project for developing ‘holistic infrastructure’.PM Modi said that the Gati Shakti plan will help raise the global profile of local manufacturers and help them compete with their counterparts worldwide. It also raises possibilities of new future economic zones.
The prime minister also said that India needs to increase both manufacturing and exports. Every product that is sold globally from India is attached to India, which is why I am saying that every product of yours is a brand ambassador for India, he said.
A number of new schemes were also introduced, such as Kisan Drones, Ken Betwa Project, ECLGS, GTMSE, RAMP, DESH-Stake-Portal, DrAAS, “One Class One TV”, Saksham Anganwadi, Har Gar, Nal se Jal, etc.
But the most crucial part of a budget is its Fiscal Management. A few important pointers are as follows:
- Proposed fiscal deficit of 4.5% of GDP by 2025/26.
- Projected fiscal deficit of 6.4% of GDP in 2022/23.
- Revised fiscal deficit for 2021/22 at 6.9% of GDP.
- 50-year interest-free loans over and above normal borrowing allowed for states.
Overall, even though this year a lot of improvements were seen, including the exemplary step towards mental health advocation, the middle class was left unimpressed. With no reduction in taxes and an extra 30% tax on the new cryptocurrency policies, the average man was yet again disappointed.