On February 01, the Union Government of India presented the annual budget for the financial year 2021-22. According to the budget document, the government has proposed to spend Rs 34,83,236 crore for the financial year 2021-22 which is 0.95% higher than the revised estimates for the year 2020-21, which was Rs 34,50,305. Not to forget that the revised spending for the year 2020-21 is 13% higher than the estimated budget for the year.
As per the budget document, the Nominal GDP (i.e., real growth added with inflation) is expected to grow at 14.4% in 2021-22. In the budget, the Union Government has dwelled its focus on water resources, food & public distribution, and communication & technology. Ministries related to these i.e. the Ministry of Jal Shakti, the Ministry of Consumer Affairs, Food and Public Distribution, and the Ministry of Communications (31%) have received the highest hike in the budget allocation compared to 2019-20, which is 64%, 48%, and 31% respectively.
New policies induced in various sectors:
- Commerce and Industry: In the union budget for 2021-22, the government has proposed to open seven textile parks over a period of three years to enhance the infrastructure and increase exports of textile products. It also added a provision for the incorporation of one-person companies. The government will make regulation changes for the same including removal of restrictions on paid-up capital and turnover. Moreover, NRIs will be eligible for constituting such companies.
- Labour and Employment: The government has planned to launch a portal where all the information related to gig workers and construction workers will be collected and this data will be assessed and utilized in framing schemes on health, housing, insurance, and so on for migrant unorganized workers. Along with that, some new provisions will be added in the Apprenticeship Act to enhance apprenticeship opportunities.
- Health and Nutrition: For capacity building in the healthcare system, strengthening the national institutions, and creating eminent institutions to detect and cure new and emerging diseases, the government has proposed to launch PM Atma Nirbhar Swasth Bharat Yojana. Again, the Mission Poshan 2.0 will be launched by merging the Supplementary Nutrition Programme and the Poshan Abhiyan in order to strengthen the dietary intake of the citizens.
- Education: In order to ensure standardization, accreditation, regulation, and funding of higher education, the government has proposed to set-up a Higher Education Commission of India. In her budget speech, the Finance Minister further stressed that the government will strengthen 15,000+ schools to include all components of the National Education Policy (NEP).
- Science and Technology: As per the budget proposal, a new scheme will be introduced to provide financial incentives for digital payments. Along with that, the government will roll-out a Deep Ocean Mission for facilitating surveys, explorations, and projects for enriching and conservation of biodiversity.
- Water and Sanitation: In order to ensure universal water supply and liquid waste management in urban regions, the Union Government has planned to implement the Jal Jeevan Mission (Urban). Along with that, the budget also included the Urban Swachh Bharat Mission 2.0 which is dedicated to sludge and wastewater management. The mission will also focus on the reduction of single-use plastic and air pollution.
- Agriculture and allied sectors: As per the budget note, the Operation Green Scheme’s umbrella will be enlarged and will include 22 perishable products. As of now, it is applicable only to tomatoes, onions, and potatoes. Also, The Agriculture Infrastructure Fund will be made available to APMCs to improve infrastructure facilities.
Expenditure on major schemes:
Among the scheme, the MGNREGS has been allocated the maximum amount for the financial year 2021-22 that sums up to Rs 73,000 crore. The annual increase in the allocation is 1% over the financial year 2019-20. At the same time, the Union Government has allocated Rs 50,000 crore (81% more) to the scheme from the budgeted stage to the revised stage. The increase in allocation happened at the time of the announcement of the economic relief package in May 2020. Further, the second-highest allocation of Rs 65,000 crore is facilitated in the PM-KISAN scheme, an annual increment of 16% compared to 2019-20.
Lastly, the Jal Jeevan Mission is the focus of this year’s budget and the scheme has been allocated Rs 50,011 crore, an increase of 355% compared to the revised estimate of 2020-21. The Government of India has also allocated Rs 35,000 crore to the Ministry of Finance for COVID-19 vaccination for the year 2021-22. The allocation is aimed to provide financial aid to the states so that they can meet their expenditure on COVID-19 vaccination.