At a time when Indian women are showing leadership and resistance especially in the anti-CAA protests, our Finance Minister Smt. Nirmala Sitaraman presented her second Union budget 2020-21 in the Lok Sabha which is visionless, an empty bucket with full of jargons and proverbs. The BJP-led government picks the best keywords. This year’s budget focuses on three areas – Aspirational India, Economic Development and a Caring society.
FM said that “the farmers’ income will be doubled by 2022” having no concrete allocation and plan of achieving it. The Economic Survey highlighted sharp declines in agriculture and allied sector from 5% in 2017-18 to 2.8% in 2019-20.
At a time when India has every reason to grow at 8%, it is struggling to grow at 5%. Industrial growth has also sharply declined from 5.9% to just 2.5% and the Government is expecting to rebound growth to 6%-6.5% in the next financial year starting April 1.
Some Major Budget Outlays
- 6 lakh crore allocated for Jal Jeevan mission
- 5 lakh crore allocated for public sector banks
- 83 lakh crore allocated for Agriculture FY 21
- 7 lakh crore allocated for Transport infra
- 69,000 crore allocated for PM’s Jan Arogya Yojna
- 12,300 crore allocated for Swachh Bharat
- 99,300 crore projected on FY 21 Education sector in 2020-21
- 23 lakh crore allocated for Rural Development FY 21
- 69,000 Cr allocated for Healthcare FY21
From the income tax front
- There is some relief for individual taxpayers
- Corporate tax was reduced before
Income Tax proposed:
| INCOME | OLD | NEW |
| Up to 5 lakhs | 5% | 0% |
| 5-7.5 lakhs | 20% | 10% |
| 7.5-10 Lakhs | 20% | 15% |
| 10-12.5 Lakhs | 30% | 20% |
| 12.5-15 Lakhs | 30% | 25% |
- For income more than 15%, it will attract an income tax will be charged at 30%
Sector-wise Allocations:
In Power Sector
- Old power plants to be shut if emissions norms not met
- 4400 cr allocated for clean air scheme for cities with over 1 mission population
Wellness & Water Sanitation Sector
- More hospitals to be set up in 2022-23
- Uses of Artificial Intelligence on Ayushman Bharat scheme
- 12,300 crore allocated for Swachh Bharat
- 6 lakh crore allocated for Jal Jeevan mission
Education Sector
- New education policy will be announced soon
- 99,300 crore in education sector in 2020-21
- Employment opportunity for general (Science & Technology) students
- Internship opportunity will be provided by urban local bodies
- Online education programme proposed to the degree level
For Economic Development
- The Government proposed Investment clearance cell
- Creation of 5 new smart cities
- Schemes to encourage mobile manufacturers
- National Tech textile mission soon to be proposed
For Indian Railways
- High speed train between Mumbai – AHD soon
- 18,000 crore allocated for rail project
- 150 trains via PPP model
- More Tejas like trains to connect more tourist spots
Roadway & Construction
- Delhi-Mumbai expressway by 2022-23
- Proposed to monetise 6000 km of Highway
- Proposed Chennai-Bangalore expressway
- 7 lakh crore allocated for transport infra in 2021
Skill India Initiative
- Government proposed 3,000 crore for ‘Skill India’ to provide relevant skill training for the youth
- FY21 fiscal deficit target pegged at 3.5% of GDP
Connect India
- Digital connectivity for essential services
- 6,000 crore allocated for BharatNet programme
- 1 lakh gram panchayat to get optical fibre link this year
- Private sectors to set up data centre parks
Agriculture Sector
- Nabard refinance scheme will be expanded
- 20 lakhs farmers to set up solar pumps this year
- Village storage schemes for farmers
- Dhana Lakhsmi schemes for village women
- Krishi Udan will be launched by civil aviation
- 16 point Action Plan for farmers
- Zero budget natural farming
- 200 lakh tonne fish production by 2022-23
So far, the Budget has nothing extraordinary in it in terms of addressing the most pressing issue for the nation, which is of an economic slowdown. This indicates we will continue to see more pains on the economic front.
India, which has the highest number of youngsters seeking education in the world, requires a concerted effort towards providing the right kind of education in order to harness the demographic dividend going forward. While allocation is not significantly hiked, we have to see what the New Education Policy brings for education providers.
While Indian aviation sector is struggling to survive, the Budget has announced a target of 100 new airports by 2024.
The Budget leaves much to be desired for the real estate segment with no reduction in interest rates on home loans, no incentives for other segments beyond affordable housing, no announcements on single window clearance and industry status for the sector. While tax benefit for the middle class leaves more money in the hands of the consumer, no reduction in GST rate for vehicles is a dampener for the automobile sector.
In India due to out-of-the-pocket expenses, about five crore people are pushed below the poverty line due to the burden of healthcare expenditure. This is something where the policymakers can seek collaboration from players working in the domain. While there is more focus in selling insurance to the poor, less focus is given in improving public health infrastructure, building new hospitals and producing more healthcare professionals.
There is a need to create awareness about the benefits of buying health insurance in tier 3 to tier 5 cities. The government should have incentivised the health insurance buyers by raising the deduction limit for medical insurance premium under Section 80D from Rs 25,000 to at least Rs 50,000 for self and family.
Women being the anchors of their respective families should have been especially incentivised. In 2018-19, women bought 103 lakh life insurance policies and contributed Rs 36,525 crore of premiums (individual life insurance new business). The removal of GST could have reduced the cost of a policy, making health insurance affordable for individual policyholders.
All in all, Union Budget 2020-21 is average. Steps taken are incremental. The economy is suffering from big problems and hence, need big steps. While the economy is still recovering from high doses of demonetisation and faulty GST implementation, the BJP-led Government seems to have no clue on how to recover from it.
[Akram Hoque is Founder Editor at The Policy Times]