Budget Expectations 2021: The upcoming Budget is going to be the first of its kind. Firstly it’s going to be a paperless budget, and secondly it will be chalked out in times of global pandemic. The Finance Minister Nirmala Sitharaman has already termed 2021 Budget to be like none before even though earlier budgets were presented in economic downturns including the 2008 financial crisis. However, this time the Budget will focus on reviving the economy which has been derailed due to health pandemic and not any economic or political situation. Also Read: Budget 2021 Expectations: From Affordable Housing To GST Reforms, 5 Demands Of Real Estate Industry
The change of leadership in the US will also have some impact on the economic policy decision even as the world is closely watching how the geopolitical situation pans out in the near future. Several sectors in the country are vying for attention of the government this Budget. So far, the government has expended roughly 10 per cent of the GDP through relief packages but it’s time that the government focuses on key sectors.
SMSEs: Experts have opined that the package for small and medium enterprises is not enough to help companies tide over the financial hardships, including the loss of income and inability to pay employees or restart operations after the lockdown. On the other hand services sector, especially the hospitality sector including hotels and small restaurants, also continues to be severly hit. This sector comprised of millions of small businesses with a large number of formal and informal workers. Small and medium business segment suffered a huge blow owing to pandemic with many either closing their shops or cutting down workforce. Infact, CMIE data also highlights the job losses at an all-time high in recent months despite the apparent economic recovery. The government should look at offering tax benefits to MSMEs on a case-to-case basis, and measures including reduction of interest rates or tax benefits to the affected MSMEs. Also, the retail sector need a protection even as e-commerce has gained strong momentum in these times.
Health
Besides SMEs, another area which deserves government attention is the health sector, especially in the pandemic times when the sector is also under tremendous pressure tackling the pandemic. Even as the vaccination drive has kicked off in various parts of the country and India has emerged as the hub of vaccine producers but there are still many factors that ails the sector. As per Mint analysis, at 3.6% of GDP, India’s overall health spending is among the lowest compared with peer and advanced economies. Of this, government spending on health accounts for an abysmal 1%. The Budget needs to significantly divert resources to aid the sector and health workers. The government can take steps for making healthcare more affordable by implementing ‘zero rating’ of GST for healthcare services
Education
In corona times the importance of education has come to the fore with most children in the country lacking access to digital education facilities. Majority of kids do not have access to mobile phones, televisions or laptops to support the e-learning process. Among other things, this year’s budget will set the pace for implementing National Education Policy 2020. Upgradation of India’s education infrastructure will be high on cards. “Reversing the dropout graph and allaying fears related to restarting on-campus studies will be paramount. In addition to the current schemes like free mid-day meals etc., government should collaborate with telecom companies to offer subsidized data plans to under-privileged students taking online classes. Easy availability of funds and higher tax exemption on education loans will strengthen parents’ resolve to register their wards for higher education. In many ways, lockdown fast-forwarded adoption of technology and government should ensure we do not return to pre-2020 era,” said Nilesh Gaikwad - Country Manager at EDHEC Business School
Government could set aside grants for fueling research-based degree programmes and specialized laboratories across institutions in tier-2 & tier-3 cities. “Though schools and colleges transitioned seamlessly to online classes, the sector requires government intervention against high operational & facilities costs,” he added.
Defence
In view of threat from China and Pakistan at the Line of Actual Control (LAC) and Line of Control (LoC), there are expectation that the Centre may hike the defence budget for the second straight year. It is likely to focus on procuring 'Make in India' products for the Armed Forces in the upcoming financial year.
"Today self-reliance in Defence has become a strategic necessity. It is imperative for us to invest in building long term indigenous capabilities for application across the entire spectrum of conflict," said Army Chief General MM Naravane on Thursday, as reported by news agency ANI. The Centre had also hiked the defence budget last time by 6% from Rs 3.18 lakh crore to Rs 3.37 lakh crore. With that, the total budget for the defence sector increased to Rs 4.7 lakh crore.