Budget 2021 has its head and heart in the right place
Budget 2021 has the distinction of being largely an out and out infra-focussed budget, which is quite a departure in tone as compared to the oft-cited ‘consumption’ orientation
Sachchidanand Shukla
Representative image (PC- MoneyControl.Com)
Budget 2021 has got its head and heart in the right place. Given the aftermath of the pandemic, it was imperative that the government does not shy away from borrowing and spending big, without getting bogged down by concerns from global rating agencies or markets overcrowding out of private investment.
The government has clearly focused on ‘buying’ growth, not just for now but also for the medium term with a laser focus on reviving investment demand. The fiscal deficit is budgeted to ease to 6.8 percent of GDP in FY22 from 9.8 percent in FY21, well above market expectations for both years. Besides, even though the spending to GDP ratio is expected to ease to 15.6 percent in FY22 from 17.7 percent in FY21, it would remain well above the FY20 levels of 13.2 percent.