News Analysis India

Tag: BUdget 2022

  • Cuts in social welfare schemes, no steps to address inflation or job creation: Shashi Tharoor slams Budget

    By PTI

    NEW DELHI: Attacking the Centre over Budget 2022-23, Congress leader Shashi Tharoor on Monday said there were significant cuts in allocation of social welfare schemes, no measures to address rising inflation and nil targeted effort for job creation.

    Initiating the discussion on the Budget in Lok Sabha, Tharoor said COVID-19 pandemic has placed citizens in unimaginable distress who suffered a lot of pain due to loss of lives between March and May last year.

    In this context, he said, the presentation of the budget cannot merely be seen as a purely routine economic exercise or state forward accounting, adding that the budget is an instrument through which the government presents a political vision to manage the economy, heal the country and set it on the path to recovery.

    “The budget has given a significant slashing in MNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) scheme, more tokenism in credit support for MSME sector, no changes in personal income tax regime and no relief in terms of addressing rising inflation as well as nil targeted efforts for job creation,” he said.

    The Budget has proposed creation of “inadequate” 60 lakh jobs in five years, which is “a far cry from the 2 crore jobs the government had promised in the equally illusory “acche din” (good days), Tharoor said.

    He added that there are reductions in budgets for social welfare schemes and significant cuts in schemes for crop insurance, MSP (minimum support price) and fertliser, which has left many farmer groups to term this Budget as a “revenge budget”.

    The Congress leader also claimed a huge dip in the incomes of lakhs of people in the last five years.

    While the wealth of richest 100 Indians soared by Rs 57 lakh crore, 4.7 crore Indians slipped into extreme poverty, he said, adding that the government has not recognised the problems which they have caused and the widespread anguish they have inflicted on “aam aadmi” (common man).

    People, he said, were expecting that the government will acknowledge the problem that the nation is facing, “acknowledge the fact that the nation is facing unprecedented levels of unemployment which has left countless citizens, specially our youth and dynamic working group population, with little prospects of brighter tomorrow”.

  • Gati for Indian Economy’s Growth through Gati Shakti

    Online MI

    Union budget is much awaited policy announcement in our country every year. Not only policy makers and economist but even common man also takes a lot of interest in the budget. This is because apart from its impact on the major economic activities like production, distribution consumption, saving, investment etc., it has an impact on the family budget also. Various stakeholders have different expectations from the budget. Based on the budget proposal each one evaluates the budget in their own way.

    Evaluation of the budget is done on the basis of following parameters:

    Growth measures
    Stability measures
    Reform measures
    Fiscal management
    The budget of 2022-23 is to be looked at in the light of the prevailing pandemic conditions as well as assembly election in five states.There was speculation that the current budget will be election oriented, but the Finance Minister has proved it wrong. The current budget is growth oriented with a medium to long term strategy for economic development of India. Instead of giving direct benefit to the people, the budget has measures to give benefits through development. The proposals in the current budget are on major thrust areas like PM Gati Shakti, Inclusive Development, Productivity Enhancement and Financing Investments.

    Some of the important announcements in the budget are clearly for achieving fast economic growth. Emphasis on infrastructure development by allocating funds to the extent of nearly 4% of GDP is definitely a measure for growth. Infrastructure is indispensable for economic growth has been proved in many countries of the world. China is the best example of making available world-class infrastructure and thereby leading to growth.

    Another important announcement for growth is the proposed capital expenditure to the extent of INR 7.50 lakh crores. This capital expenditure by the Government will lead to increase in aggregate demand and will give boost to private sector investment also. Measures of linking the rural and urban areas through transport and communication facility is a step in the direction of growth. Two major growth engine of India, agriculture and MSME sector related announcements are also measures for growth. Though the farm sector is not contributing substantially to our GDP, the percentage of total population depending on this sector is large and hence, measures to put the income in the hands of farmers by crop procurements and giving MSP will lead to increase in the demand by rural population. Such rise in demand for goods and services will be an incentive for industries to make fresh investments and it will contribute towards arise in the industrial output and GDP growth. Along with measures to increase income of the farmers, use of technology for like digitization of records relating to crop output and land records is a step in the direction of increasing productivity and growth.

    Source: Envato Elements

    MSMEs are playing an important role in Indian economy in terms of industrial output, employment and exports. Proposal to continue the credit guarantee scheme for MSME sector and extension of tax concession for startups and new manufacturing units is also a growth-oriented measure.

    If the nation has to move in the direction of growth, transport is a critical infrastructure. In the current budget, PM Gati Shakti measures are going to contribute for transport availability for goods and people. Under the Gati Shakti measures, national highway construction of 25,000 kms, 400 new trains in next three years, development of ports, airports, mass transport measures will lead to reduction in logistics problems faced by industries and will help in logistics cost reduction and increasing productivity of industry. Gati Shakti will lead to connectivity between different parts of the country and help in balance regional development.

    Development of financial sector of a country also contributes towards the economic growth. In the current budget, some of the major policy announcements will strengthen the financial sector and financial inclusion. Decision of post offices to be brought under core banking system will help the country to reach out to the masses in remote areas and enhance financial inclusion. Starting digital banks for financial inclusion will make the system more transparent, accountable and rapid. Our banking system is facing severe problem of non-performing assets (NPA). To manage this problem, Insolvency and Bankruptcy law was introduced in 2016. Initially it appeared that it will be a game changer in NPA management but few limitations in the law were discovered. An announcement is made in this budget to make appropriate changes to that law. This is a very good step for NPA management and making the financial conditions of the banks strong.

    Measure to raise the revenue to meet proposed rising expenditure, instead of making major changes in the direct tax, Finance Minister resorted to new avenue by imposing tax on the income from digital assets. This step is not only a new source of revenue but also check the trading, speculating activities in digital assets.

    Source: Envato Elements

    On fiscal management front, the performance of the Government is good for 2021-22 by keeping the fiscal deficit within limit of slightly higher than budgeted. For 2021-22 the budgeted fiscal deficit was 6.8% of GDP and the revised estimate is 6.9% of GDP. Fiscal deficit is estimated at 6.4% of GDP for 2022-23, however the concern is quality of fiscal deficit. In 2022-23 if one looks at the revenue deficit to fiscal deficit ratio, it is 59.60%. What it means is that, of the total borrowings which the Government will raise, nearly 60 % of the funds will be utilized to meet revenue expenditure. This ratio needs to be controlled. The budgeted borrowing by the Government in 2022-23 is around INR 15 lakh crores. In the light of fear of rising inflation at global level, borrowing to this extent will certainly lead to inflation. Rising commodity prices of oil, gas and coal, less private investment due to lower consumer demand and pandemic uncertainly are the few other challenges before the Government.

    Source: Envato Elements

    In spite of these challenges, the Finance Minister deserves applause for presenting a budget with a highly balanced approach with the vision and focus of putting India on high growth path. Economic growth and its equitable distribution is the only solution to ensure welfare and wellbeing of the people. As Adam Smit said “No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable”. The measures proposed in the current budget are for the masses to improve their economic conditions.

    – Dr. Pankaj Trivedi

    The author is a Professor and Area Chairperson – Finance & Law department at K J Somaiya Institute of Management, Dean – Faculty of Commerce and Business Studies at Somaiya Vidyavihar University

    Disclaimer: This content is distributed by K J Somaiya Institute of Management. No TNIE Group journalist is involved in the creation of this content.  

  • Budget stayed away from tax incentives to individuals for investing into housing

    By Express News Service

    The Indian economy is resilient and has rebound and grown on the basis of strong fundamentals. The economy has sustained multiple shocks of Demonetisation, GST, RERA and credit crisis of NBFCs. Humanity is currently facing a pandemic which has resulted in unemployment, income losses, business model dislocation and the biggest of all, an uneven economic recovery.

    The ‘K’ shaped economic recovery created a wide divide between the bottom and the top of the income pyramid. Our biggest impediment to growth is rising inflation, interest rates and unsustainable oil prices, and hence the budget blueprint is crucial.

    This budget tried laying the path for next 25 years, focusing immediately through the PM Gati Shakti with seven engines — infra push, multimodal transportation, logistic parks, partnership with state governments for urban planning and development etc. Surely it will help the economic recovery. A critical sector like real estate will see positive impact in medium to long term. Infrastructure status to data centres and energy storage systems including charging infra etc is a step in right direction. This will attract lots of global capital. 

    The thrust on digital, fintech, healthtech, edutech, clean teach and journey towards Prop tech have been initiated, but the devil lies in the details. Real estate needs more ‘end to end’ digitisation. This brings in transparency, disclosures and governance with ease of acquiring and selling homes. Also announced is the intention to bring in ‘One nation one registration software’ which is a most interesting and much required reform.

    This budget stayed away from tax incentives to individuals for investing into housing and is surely a missed opportunity. Finally, this is a growth-oriented budget with focus on government capex and employment generation through revival in infra-related sectors. This may help continue momentum in real estate if execution of earlier reforms and new announcements budget are implemented seamlessly.

     Sunil Rohokale MD & CEO of ASK Group

  • Taking cue from Budget, MP government to carry out organic farming along Narmada river

    By PTI

    BHOPAL: Taking a cue from the Union budget proposal of staring chemical-free farming along the Ganga, the Madhya Pradesh government has decided to carry out organic farming along the Narmada river, which is considered as the lifeline of the state, an official said on Thursday.

    The decision was taken at a meeting of ministers and top bureaucrats chaired by Chief Minister Shivraj Singh Chouhan on Wednesday, he said.

    “A special campaign should be launched to develop natural farming on a 5-km stretch on both sides of Narmada river,” the chief minister said in the meeting.

    Chouhan also urged ministers who farm to switch to organic farming on their land, the official said.

    The state government’s decision has come a day after Union Finance Minister Nirmala Sitharaman in her budget speech said that chemical-free farming will be promoted throughout the country, starting with fields within a 5-km wide corridor along the Ganga.

    Narmada, the fifth longest river in the country, originates from Amarkantak in Anuppur district of Madhya Pradesh and traverses 1,077 km of the state.

  • Research and development budget of crucial institutions downsized

    Express News Service

    NEW DELHI:  There was a slash in funding for the country’s premier research and development institutions and laboratories that drove innovation, low-cost indigenous solutions, including genome sequencing, DNA and nasal vaccine, during the Covid-19 pandemic. Budget for the country’s three scientific institutions was cut down by Rs 576 crore for the next fiscal year.

    Department of Biotechnology, Department of Scientific and Industrial Research and Department of Science & Technology are three key institutions under the ministry of science and technology. The Budget allocated Rs 14,217 crore for 2022-23. It was Rs 14,793 crore during FY 2021-22.

    The biggest cut of `921 crore was taken by the Department of Biotechnology (DBT) that has been conducting trials on DNA vaccine and nasal vaccine for Covid-19. The Indian SARS-CoV-2 Genomics Consortium, a consortium of top scientific institutions sequencing genomes, also comes under DBT.

    The budget for Biotech Research & Development, which comes under DBT, was slashed from Rs 1,660 crore to Rs 1,315 crore. Also, under the other scientific research subhead in the DBT, the budget allocation has been cut by Rs 828 crore, while the budget for industrial and entrepreneurship development was downsized by Rs 595 crore.

    Calling it a ‘futuristic budget with scientific vision and start-up incentives’, Dr Jitendra Singh, Union Minister of State (independent charge) Science & Technology, said: “Under the leadership of Prime Minister Narendra Modi, India looks forward to a crucial decade ahead, which will primarily be determined by two factors — economy and science, technology and innovation.”

    The budget of the Department of Science and Technology (DST) saw a minuscule jump of Rs 67 crore. The allocation under Research and Development in DST saw an increase of Rs 11 crore, while allocation for innovation, technology development and deployment has been reduced from Rs 951 crore in FY 2021-22 to Rs 812 crore in FY 2022-23.

    About Rs 100 crore cut was taken by DST’s Science and Engineering Research Board (SERB), which runs several schemes and supports research in frontier areas of science and engineering. The Board also gives special attention to young scientists below the age of 35 to undertake independent research in new areas. It also offers fellowships to scientists and engineers for their outstanding performances and Ramanujan fellowship to brilliant scientists from across the world to take up research positions in India.                                          The Budget allocation for the C, which has a chain of national laboratories under it, saw an increase of Rs 412 crore.

  • Will write to FM to reconsider relief for traders, middle-class: CAIT NCR

    By PTI

    NOIDA: Lamenting no sops for middle class and traders in the Budget 2022-23, the NCR chapter of the Confederation of All India Traders (CAIT) said it will be writing to the Union Finance Ministry to reconsider extending relief in these categories.

    CAIT’s NCR unit convenor Sushil Kumar Jain said in the budget, the government has given relief by reducing the tax rate on some items like textiles, electronics, and jewellery and it would definitely increase their sales.

    “The proposals on MSME are also a matter of joy but overall it looked like the government has hardly changed the budget from the last year and wants to move further for development like the previous years. There was no relief for the traders and middle class and they are disappointed with this budget,” Jain said in a statement.

    “We will again write a letter to Finance Minister Nirmala Sitharaman for reconsidering the budget and if still possible, some relief can be given to traders and the middle class,” said Jain, also the president of Noida’s Sector 18 market association.

    He said the CAIT had been repeatedly urging the Centre for reconsidering aspects of the GST and Income Tax but there has been no hearing on that too.

  • Union Budget: Mamata says zero for common man, Amit Mitra calls it a hoax, BJP hits back

    By PTI

    KOLKATA: Terming the union budget presented in Parliament on Tuesday as a “Pegasus spin budget”, West Bengal Chief Minister Mamata Banerjee said it has got nothing for the common people who are being crushed by inflation and unemployment.

    Banerjee’s principal chief advisor Amit Mitra claimed there is no direction for financial growth in the union budget and it is “either a hoax or lack of goodwill”.

    The opposition BJP supported the Union budget as “pro-people” and asked the TMC government to come out with a white paper on the amount of investment that has materialised in the state in the last ten years.

    Finance Minister Nirmala Sitharaman presenting the union budget in Parliament said the country’s economic growth is expected to be at 9.2 per cent in the current financial year on the back of a sharp rebound in the economy.

    Criticising the budget, Banerjee said the Centre was lost in “big words signifying nothing”. “BUDGET HAS ZERO FOR COMMON PEOPLE, WHO ARE GETTING CRUSHED BY UNEMPLOYMENT & INFLATION. GOVT IS LOST IN BIG WORDS SIGNIFYING NOTHING – A PEGASUS SPIN BUDGET (sic),” she tweeted.

    Mitra, who was addressing a virtual press conference, said India is the only country globally with stagflation and the union budget will hit rural employment further with the reduction in allocation for the job guarantee scheme.

    “There is no allocation for social security schemes. The biggest thing is that there is no solution for middle class employees in the budget. Around 1.20 crore middle class people lost their jobs in lockdown. What is allocated for them in the budget? What is allocated in the budget for the families of those who lost their lives due to COVID? There is nothing,” he said.

    Mitra, a former finance minister of the state, said there is no direction of financial growth in this union budget. “The income tax structure remains unchanged. There is nothing for the poor and middle class. The Centre’s budget is either a hoax or a lack of goodwill,” he said.

    Mitra said the amount allocated for 100 days work had been reduced from Rs 98,000 crore to Rs 73,000 crore in this year’s budget, which is a “terrible thing”.

    The budget does not address the problem of 30 million unemployed people or inflation of 14 per cent of wholesale prices or 6 per cent of the increase in consumer prices.

    “It does not stimulate demand by putting money in the hands of the common people – something that all other countries are doing,” he said.

    The BJP on the other hand accused Mitra and the TMC government of destroying the state’s economy. “The union budget is a pro-people budget. The TMC has opposed it for political reasons. But before opposing it, TMC should answer why Bengal has been pushed to a debt trap. It should come out with a white paper on the investment the state has received and those which has been implemented on the ground,” BJP state spokesperson Samik Bhattacharya said.

    Criticising the union budget as “anti-people’, CPI(M) central committee member Sujan Chakraborty said it is a “Sale India budget conceptualised by a party which has no contribution in either the country’s independence or nation building.” 

  • Budget is betrayal of salaried, middle classes: Congress hits out at Modi government

    By PTI

    NEW DELHI: The Congress on Tuesday accused Finance Minister Nirmala Sitharaman and Prime Minister Minister Narendra Modi of betraying the country’s salaried and middle classes by not announcing any relief measures for them in the Union Budget.

    Congress general secretary and chief spokesperson Randeep Surjewala said the salaried and the middle classes have been affected due to pay cuts and high inflation.

    “India’s salaried class and middle class were hoping for relief in times of pandemic, all round pay cuts and back breaking inflation. FM and PM have again deeply disappointed them in Direct Tax measures,” Surjewala said on Twitter.

    “This is a betrayal of India’s Salaried Class and Middle Class. #Budget2022,” he said in his initial remarks on the Union Budget.

    The comments came soon after the finance minister presented the union budget for 2022-23 in Parliament.

  • Budget 2022: Child rights NGOs demand increased allocation for elimination of child labour

    By PTI

    NEW DELHI: Noting that safety of children should be the centrepiece of the Union Budget, child rights organisations have demanded an increased allocation for elimination of child labour and more investment in strengthening the social safety-net.

    They also said that effective preventive mechanisms need to be accelerated on an immediate basis. The Union Budget 2022-23 will be presented by Finance Minister Nirmala Sitharaman on Tuesday.

    Executive Director Kailash Satyarthi Foundation Jyoti Mathur said the overall percentage share of budget allocation for children in the Union Budget must be improved, and it should be restored at least to the level of 2020-21.

    “It is noteworthy to mention here that the percentage share of the Union Budget allocated for the welfare of children has been reduced from 3.16 per cent (2020-21) to 2.46 per cent (2021-22). This is the lowest share of the budget allocated for the welfare of children in the last 11 years,” she said.

    “In addition, if we look at the budget allocation for the previous two years, the total budget allocated towards the welfare of children has declined by 11 per cent in 2021-22 over 2020-21 (a decline from Rs 96,042 crore in 2020-21 to Rs 85,713 crore in 2021-22),” she said.

    There should also be an increased allocation for elimination of child labour with a comprehensive national action plan, Mathur added. Other suggestions include enhanced budgetary allocation for rehabilitation of bonded labour, which is a part of the overall budget head of the National Child Labour Project (NCLP).

    “Since the budget head of the NCLP also includes grants-in-aid to voluntary agencies and reimbursement of assistance to bonded labour it appears impossible to provide any assistance to the victims of bonded labour as the allocation is grossly inadequate even to maintain the fixed expenditure under the NCLP,” she said.

    Mathur highlighted the need for establishing an international Centre to address incidences of ‘online child sexual abuse’.

    Chief Executive Officer of CRY-Child Rights and You, Puja Marwaha, said children should be placed at the centre of any development discourse – both for themselves and for the inclusive growth of the country – and this should be the centrepiece of the Union Budget.

    Elaborating on the multiple impacts of the Covid pandemic on children, she said, “Experiences and learnings from prior humanitarian crises have shown that children tend to be disproportionately affected during such critical times and their rights, lives and well-being are at risk of irreparable harm.

    ” “Owing to disruptions in education and health-care systems, lack of access to nutrition and protection services over the past two years, their vulnerabilities, especially within rural areas and marginalised communities have increased multiple times,” Marwaha sadi.

    COVID-19 has impacted children in diverse ways – be it physical, emotional, cognitive, or social repercussions, including transition or migration, familial crises, isolation from friends, discontinuity of learning, environment, quarantine, hospitalisation of self or family members, and entry into adult roles of work or marriage, she said.

    Consequently, the lives of India’s children were severely restricted in terms of their access to education, nutrition and development, and child protection, Marwaha added.

    Underscoring the importance of adequate provisioning for the child protection systems, she said, “Given the increase in numbers of children facing risks such as entry into child labour or marriage, more investment in strengthening the social safety-net and effective preventive mechanisms needs to be accelerated on an immediate basis.”

  • Made in India vaccines playing important role in making COVID-free world: President Ram Nath Kovind

    By PTI

    NEW DELHI: President Ram Nath Kovind on Monday highlighted the achievements of the Modi government’s mega COVID-19 vaccination drive, and noted that 150 crore doses were administered to the country’s citizens in a record time.

    In his address to the joint sitting of both Houses of Parliament at the start of the Budget Session, Kovind said the Rs 64,000 crore PM Ayushman Bharat Health Infrastructure Mission will prepare the country for a health crisis in the future. “We have administered 150 crore doses of COVID-19 vaccines in a record time,” he said.

    The President said more than 70 per cent beneficiaries of the vaccination drive have been administered the second dose. Flagging other achievements of the central government, he said that over six crore rural households are getting tap water under ‘Har Ghar Jal initiative’.

    Kovind said that India’s agriculture exports have also crossed Rs three lakh crore. He said despite the pandemic, country’s farmers produced 30 crore tonnes of food grains and 33 crore horticulture produce in 2020-21.

    The President said more than 11 crore farmer families received Rs 1.80 lakh crore through PM-KISAN and big changes have been seen in the farm sector. He said that the Government procured more than 433 lakh metric tonnes of wheat, which benefited more than 50 lakh farmers.

    The session begins ahead of the crucial assembly elections in five states of Uttar Pradesh, Uttarakhand, Punjab, Goa and Manipur.