FM Nirmala Sitharaman to present Budget 2021 today: 10 things to expect

Finance Minister Nirmala Sitharaman will present the Union Budget 2021 that is expected to provide relief to the pandemic-hit country. As the country gets ready for Budget 2021, here are 10 things that can be expected from the Union Budget 2021-22.

UPDATED: February 1, 2021 10:37 IST

Union Finance Minister Nirmala Sitharaman is ready with her third consecutive Budget proposals. Going by the past experience, we may expect the following 10 things from the Union Budget 2021-22:

  1. Nirmala Sitharaman is likely to give credit to the Narendra Modi government for containing fiscal deficit despite global economic collapse in the wake of the coronavirus pandemic. The whole world slipped into an economic crisis not seen in about 100 years. Indian economy contracted massively particularly in the first quarter. The current fiscal year is expected to end with a deficit of 6.5 per cent to 8 per cent with India’s debt-to-GDP ratio touching 85 per cent. The next fiscal target could be 5.6 per cent as deficit in the Union Budget 2021-22.
  2. Nirmala Sitharaman is further likely to take credit for a V-shaped revival of economy in the Union Budget 2021-22. The Economic Survey has already said so. Sitharaman is likely take credit for over 20 lakh crore fiscal boost during the pandemic-hit year for revival of economy. India’s GDP contracted by about 24 per cent in the first quarter. The Economic Survey estimated the fiscal year to end with an improved figure of contraction by 7.7 per cent.
  3. Another point for taking credit for Nirmala Sitharaman is likely to feature in the Union Budget is Centre’s aid and relief measures for the labourers and migrant workers, who were the worst hit due to pandemic-induced lockdown beginning in March 2020. The Modi government has previously spoken about providing relief to millions of workers who headed home in hapless situations from their workplaces.
  4. The government is expected to peg higher estimate for revenue generation and disinvestment. It has been a trend. Revenue estimates are often off-the-mark primarily for the reason that the figures for almost one quarter are not available with the government, and also because the government aims to address its political constituency. Disinvestment has been a problem for the government. In the last Budget, the government expected to earn over Rs 2 lakh crore from the sale of assets. The actual disinvestment figure remains less than Rs 20,000 crore.
  5. Sitharaman is expected to give greater push to projects in the infrastructure sector. This is expedient on account of several factors including the situation on border and a fattened pool of surplus workforce which was left jobless due to pandemic-hit economic distress.
  6. The government is cash-strapped and may not find it easy to pay the money due to states under GST regime and MNREGA. Alternate ways may be suggested in the Union Budget to meet GST compensation due to states, and grants to states under MNREGA for money already spent
  7. Despite the unending expectation of the income tax payers, no big change in income tax regime is expected from Sitharaman in the Union Budget 2021-22. The primary reason for this is the revenue position of the government. Some minor tweaks are likely as the alternate income tax regime introduced in Budget 2020 did not find much favour from the income tax payers. There is again speculation about raising the basic exemption limit from Rs 2.5 lakh to Rs 5 lakh. But several experts have denied the possibility.
  8. Hit by pandemic and still reeling under the Covid-19 pressure, the Modi government is likely to give a greater push to the healthcare sector. Higher spending by the government on healthcare is expected coupled with measures to fix the supply chain, whose vagaries were exposed during the lockdown.
  9. Going by recent experience, no major policy announcement is likely in the Union Budget. The government in recent years has moved towards keeping the Budget exercise in Parliament more like a bahi-khata presentation that making a policy statement. The same pattern is expected in the next year’s Budget proposals.
  10. And, as is the norm, the ruling coalition partners are expected to term the Union Budget 2021-22 as “excellent” or “good for the country”, and the Opposition as “another missed opportunity” for fixing the economic woes of India.


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