Prof. Viswa Vallabh, Prof. of Economics and Chairperson Centre for Rural Management : I think it is
a good budget. We can call it the health, agriculture and infrastructure budget. The allocation on infrastructure has been increased substantially. Same way I think commitment to modernization of agriculture is long overdue. Given that covid experience, health sector need to get priority. This budget is targeting long-term growth while it does not leave current problems unaddressed.
Prof. Pitabas Mohanty, Prof. of Finance : This budget laid down the right steps to ensure that the GDP can
grow at 11% as envisaged in the Economic Survey. The budget has envisioned substantial investments for the healthcare sector, infrastructure and housing sector and the financial sector. The substantial borrowings that are needed to finance the fiscal deficit (around Rs.12 lakh crores) will not crowd out private investments as the private investments are already very low due to Covid induced uncertainties.
The budget has also set aside ₹20,000 crore towards setting up a Bad Bank that is similar to an Asset Reconstruction Company. This will enable the banks to focus on their core activities instead of managing the stressed assets. Hopefully, the banks will start lending more to the profitable projects instead of worrying about possible defaults.
Overall, a no-nonsense budget that does not include any gimmick to fool the public. Though more is required to achieve the $5 trillion economy, this budget definitely is sending the right signals to the investors about the intentions of the FM and the current Government.
Debarati Basu, Prof. of Finance and Accounting : A better than expected budget, causing a rally in the market! The budget seems focused on nurturing the economy post the pandemic slowdown with a sharp jump in capital expenditure. Healthcare spending has been doubled to answer the need of the hour. The opening up of the insurance sector by increasing the FDI limit to 74% and the INR 20,000 crore recapitalization of PSBs is a big plus for banking groups in the country. The strategic disinvestments lined up and the LIC IPO are other things the market has to look forward to.
There is also an emphasis on entrepreneurship with reducing restrictions on paid-up capital and turnover of one-person companies and extended tax incentives for startups. Public spending has also seen a lot of focus, especially public distribution, education, transport and the rural segment.
The most positive indication for reviving the economy is pegging the targeted fiscal deficit at a liberal 6.8% of GDP for FY22. This is necessary given the estimated fiscal deficit of FY21 is 9.5%, almost three times last year’s target deficit. However, real estate and individual taxpayers have little to look forward to from this budget. While many might say it is not enough, something is better than nothing! This budget has not been as disappointing as the previous ones and checks the right boxes. It appears to be the right spirit as India heals from the doldrums of last year.
Prof. N Sivasankaran. Prof. of Finance : The Budget 2021 aims to achieve a fiscal deficit of 6.8% as against the RE for 2020 -21 pegged at 9.5% of GDP. Given the impact of the Pandemic, one could not expect to have an achievement of the FRBM FD target of 3% .
The FM has not changed the direct taxes and tax slabs, which is good news for the individual taxpayers and corporates as everyone was expecting a COVID CESS. This may increase consumption and thereby bring cheers to economic revival. However, there were disappointments about expectations in terms of increase in tax deduction limits from 1.5 Lakhs to 3 Lakhs in section 80C,80 CCC and changes in 80D. And there is no additional deduction for expenditure incurred in relation to work from home. Corporate Tax might have been reduced a little bit to accelerate the economic recovery.
The Budget has allocated Rs 35000 crores for COVID vaccine which is a good step in this situation. The ambitious target of 16.5 lakh crore for agriculture credit may look like a step in the right direction but how it is going to be executed is to be watched. The FM might have allocated a significant amount of funds to the education sector as the government is keen to implement the National Education Policy. The move to set up a development financial institution (with an allocation of Rs 20000 crores) to finance the National Infrastructure Pipeline (NIP) is also a good initiative. However, the FM should have given the allocation of funds for development of national highways not only to the poll bound states but also to the entire country.
XLRI Jamshedpur commences new academic session with 555 students
The plan to set up an asset reconstruction and asset management company (Bad Bank scheme) which shall rescue the banks from the NPA crisis is a good initiative, but the modus operandi needs to be spelt out and executed diligently. Finally, the government’s ambitious disinvestment plans look positive but looks skeptical looking at the past performance. Overall, in my view, it is a balanced budget.
Read More: Budget reflects commitment to take up education and NEP 2020 on war footing
Union Budget 2021 – A Promise to Accelerated Economic Growth
Major emphasis on healthcare, Education did not receive adequate attention
