Although Union Finance Minister Nirmala Sitharaman, in her third budget, recognized the need to allocate more funds for health and well being, the general expectations of the people have not been fully met. In fact, the allocation for health sector in real terms was reduced compared to the last budget if the one-time amount of Rs. 35,000 crore for Covid vaccine is set aside. By including well being with health, the finance minister added the amounts allocated for safe drinking water and sanitation to claim that the budget proposals presented to Parliament on Monday had earmarked for health and well being show an increase of 135 per cent compared to the current fiscal. The claim is justified since she proposed “PM Atma Nirbhar Swasth Bharat Yojana” envisaging setting up health care facilities in cities and towns. If the allocations made for this scheme are included, it can be said that the government intends to provide more funds for health care in view of the Covid pandemic that devastated the economy and the lives of the people.
There is a concerted move to privatise public sector enterprises. Niramala has followed up what Yashwant Sinha, as finance minister in Vajapayee government in 1998 proposed and the first NDA regime implemented in 1999-2004. This budget proposed to disinvest in entities like Air India and Bharat Petroleum. The FM proposed to increase the foreign ownership in LIC to 74 per cent by allowing FDI to a greater extent. She said she would introduce bill to amend the Insurance Act, 1938. The government’s proposal to privatise two government managed banks is another move in the process of reducing, by clubbing or disinvesting, the number of public sector banks. The finance minister has estimated Rs. 1.75 lakh crore capital receipts through the process of disinvestment. She expected the capital expenditure to be Rs. 5.54 lakh crore which would be 34.5 per cent more than the current year’s estimate. By showing restraint in spending, the finance minister plans to bring down the deficit to 6.8 per cent from this year’s 9.5 per cent.
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The allocation for Railways is proposed to be increased to Rs. 1.1 lakh crore. With the government expecting the Railways to increase its revenues next year through passenger, goods, coaching and other means to Rs. 2.17 lakh crore, one can assume and hope that the Indian Railways would not be in a stressed situation where privatization becomes an inescapable option.
There would be no change in income tax regime and the senior citizens above 75 years would not be bothered about filing tax returns. It is a good move. Proposals to start Asset Reconstruction Company and Asset Management Company are well thought of. It will help in sorting out stressed debts and disposing of assets. Given the constraints and the damage done by the pandemic, the finance ministers proposals can be seen as measures that could help the devastated economy to get back to the track on its path to recovery. She optimism she exhibited about India becoming a $5 trillion economy, though healthy and well intended, still remains in the realm of imagination. The estimated GDP growth of 10% to 10.5% in the coming year appears difficult, though not impossible. It would be a reality if what she said regarding the manufacturing sector happens.