{"id":80237,"date":"2021-02-05T10:51:19","date_gmt":"2021-02-05T05:21:19","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=80237"},"modified":"2021-02-24T17:24:22","modified_gmt":"2021-02-24T11:54:22","slug":"a-normal-budget-for-abnormal-times","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/a-normal-budget-for-abnormal-times\/","title":{"rendered":"A normal budget for abnormal times"},"content":{"rendered":"<p><strong>Synopsis: <\/strong>The recently released budget appears to be fairly normal. Normal is not sufficient for the abnormal times like the present.<\/p>\n<p><strong>Introduction <\/strong><\/p>\n<p>The economy contracted by 7.7% in India. The economic survey projects India\u2019s real GDP growth to be 11% in 2021-22. However, this projection looks overestimated. India will have to surpass pre-covid-19 levels to achieve this growth; this will take at least two years.<\/p>\n<ul>\n<li>The budget required non-standard policy responses given the abnormal times for the economy. However, no such major changes were made to the budget.<\/li>\n<li>There is only a 1% increase in the overall expenditure of the government.<\/li>\n<\/ul>\n<p><strong>What are the issues in the budget?<\/strong><\/p>\n<p><strong>The increase in capital expenditure<\/strong> is expected to be channelized through Investment in infrastructure, However, it is linked with 2 types of risks;<\/p>\n<ul>\n<li>If there is a delay in the completion of projects, it will lead to more spending.<\/li>\n<li>It will not provide instant multiplier effects to lift the demand. As the life cycle of these projects is very long.<\/li>\n<\/ul>\n<p><strong>There are no drastic reforms for the agriculture sector<\/strong>. For example, no rationalizing of the Public Distribution System issue prices of food grains.<\/p>\n<ul>\n<li>The cash transfers under the Pradhan Mantri Kisan Samman Nidhi Scheme (PM-KISAN) have not been increased.<\/li>\n<\/ul>\n<p><strong>Second,<\/strong> manufacturing growth would <strong>depend totally on private investments<\/strong>.<\/p>\n<ul>\n<li><strong>There is a lack of concrete policies<\/strong> towards export promotion in the textile sector. This may weaken the competitiveness of manufacturing exports.<\/li>\n<\/ul>\n<p><strong>Infrastructure provisioning has unaddressed issues<\/strong> such as execution risk and regulatory issues. The introduction of a development finance institution addresses only one issue.<\/p>\n<p><strong>There is no proper plan to tackle urban unemployment.<\/strong> Employment and demand generation will depend on the impulses of growth cycles.<\/p>\n<p>The target of reducing the fiscal deficit from 9.5% to 6.8% of GDP<strong> depends upon hypothetical factors, such as<\/strong>:<\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Total revenue might get some boost from better tax revenue.<\/li>\n<li>A renewed hope for better divestment revenues.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>The Budget sets out some impressive plans but does not provide the specific mechanisms to achieve those plans.<\/p>\n<p>Although the Budget sets fixed some grand targets, it does not provide the precise mechanisms to achieve those.<\/p>\n<blockquote class=\"wp-embedded-content\" data-secret=\"roDPOjfZBx\"><p><a href=\"https:\/\/forumias.com\/blog\/budget-2021-despite-some-hits-the-budget-has-crucial-misses\/\">Budget 2021: Despite some hits, the Budget has crucial misses<\/a><\/p><\/blockquote>\n<p><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;Budget 2021: Despite some hits, the Budget has crucial misses&#8221; &#8212; Free UPSC IAS Preparation For Aspirants\" src=\"https:\/\/forumias.com\/blog\/budget-2021-despite-some-hits-the-budget-has-crucial-misses\/embed\/#?secret=fVVI5W4CAX#?secret=roDPOjfZBx\" data-secret=\"roDPOjfZBx\" width=\"600\" height=\"338\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Synopsis: The recently released budget appears to be fairly normal. Normal is not sufficient for the abnormal times like the present. Introduction The economy contracted by 7.7% in India. The economic survey projects India\u2019s real GDP growth to be 11% in 2021-22. However, this projection looks overestimated. India will have to surpass pre-covid-19 levels to&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/a-normal-budget-for-abnormal-times\/\">Continue reading <span class=\"screen-reader-text\">A normal budget for abnormal times<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[1308],"class_list":["post-80237","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-eco_0","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704916000},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/80237","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=80237"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/80237\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=80237"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=80237"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=80237"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}