Greater Noida: Prof. J.D. Agarwal, Chairman and Professor of Finance, Indian Institute of Finance, while delivering the Summit welcome opening address at Three days IIF International Research Conference 2021 on Union Budget 2021 : Expectations, said that Union Budget 2021 is likely to be a path breaking budget laying foundations for macroeconomic stability, faster growth, fiscal consolidation, controlling inflation, giving boost of savings and investment with a focus on Modi’s Make in India and Atma Nirbhar Bharat. According to him, there is likely to be something for everybody- more for poor and middle class. The budget is expected to identify challenges which India is facing currently – Agriculture income under stress; increasing investment in infrastructure; reviving industry; resource crunch; maintaining fiscal discipline and more focus on health and education sector felt Dr. Agarwal. According to his budget projections, Growth with a human face is likely to be around 12% with fiscal deficit likely to be about 5.4% of GDP.
While addressing a large audience on Zoom, Youtube and Facebook, Prof. Agarwal said that or quick projections based on data available of ET 29th January, 2021, the total expenditure may be around 60 lakh crores for FY 2021-22. Reveune receipts are expected to be around 31.5 lakh crores and the total borrowing to be around 16.80 lakh crores with heavy cost of interest payments. with Announcements about 2 crores houses in urban areas and 4 crores in rural areas; 24 X 7 electricity; clean drinking water; more toilets under Swacch Bharat Abhiyan; better road connectivity; electrification of 20000 villages; Secondary schools in 5 km reach of every child and setting up of health centre at subdivision level are likely in feature in the budget announcements this year. Extra funds for irrigation; 20,000 crores for rural infrastructure development fund; target of ten lakh crores of credit to farmers; extra funds for MUDRA and enhancement of grants under MNREGA may be made. Several positive announcements from Jan Dhan to Jan Suraksha are likely to be announced in the budget.
According to him, in the budget announcements, attempt may be made to raise agriculture productivity through market mechanism; promote digitalisation; curb black money and money laundering; adopt portfolio approach to remove subsidies and introduce tax incentives; reduce implicit subsidies. Ratio of indirect tax revenue to direct tax revenue should also be brought down. The budget may bring cheers to people, business and industry.
The Budget would balance the challenges of mass vaccination, stimulus to economic growth, inflation and requisite impetus to social security infrastructure with financial inclusion and digitalisation said Prof. Yamini Agarwal, Professor of Finance, while delivering an opening address on Union Budget 2021 : Projections. According to her quick estimates based on aggregates, there is likely to be a fiscal deficit of 5.25%; a revenue deficit of 2.3% and primary deficit of 2.5%. The Government is likely to bring an expenditure of Rs. 59,82,893 crores, while total receipt would be around Rs. 50,41,173 crores of which Rs. 31,52,404 crores would be tax revenue and Rs 16,80,000 crores are likely to be total borrowings in 2021-22. There is likely to be increased expenditure on agriculture to the tune of 1,77,991 crores, rural development of Rs. 1,66,540 crores, education about Rs. 1,22,760 crores, health about Rs. 82,800 crores and social sector Rs. 64,651 crores.
According to her, there is no likelihood to change in tax structure or imposition of new taxes as the new scheme takes care of lower taxes to boost consumption. Corporate taxes for MSME have already been reduced. Heavy investment in infrastructure agriculture and social security infrastructure with mass vaccination is likely to pave the way for double digit growth rate besides the economic recovery expected at 11.5% as estimated by IMF with base effect.
Continuing the discussion on Expectation from Union Budget 2021, Professor Ashok V. Desai, an eminent economist emphasised that rating agencies recommendation relating to GDP, National Income, is not based on growth. He emphasised that the present Economic Survey of 964 pages for 2021 predicts, given the present scenario, economy shall be back to track.
Professor Anil Salve, an eminent economist advocated a proposal which he has shared with the Government to distribute vouchers of INR 5000 to each individual thereby one time spending of INR 7 lakh crores. On receiving voucher it should be spent 60% on Hospitality and Tourism and balance 40% shall be spent on grocery and other essentials. According to him, these voucher shall be fully effective in order to jump start the economy.
Another Panelist, Industrialist Mr. Rajnish Goenka pleaded for MSME sector citing China has become manufacturing hub concentrating on MSME. He opined that as MSME sector has been defined with upward investment of 5 Crore so tax exemption should be allowed and of tax should be brought from 8% to 4%
Commander Dr Bhushan Dewan applauded the potential of defence sector manufacturing in India. According to him, the budget expenditure on Defence is around 15% to 16% of GDP. A country with import of defence equipment shall be under lower technology. Indigenous manufacturing of Defence equipment shall make India to stand at the international level. He also advocated strengthening of MSME sector.
Economist and BJP, National Spokesperson (Economic Affairs), Mr. Gopal Krishna Aggarwal, clearly aired the views that though in 1991 economic reform has begun during 1999 to 2004 and from 2014 till date firm commitment for economic reform have been affirmed by the ruling party. Post Covid health has put more pressure on government expenditure. Asset Monetization should be made. Monthly economic monitor give confidence to Indian Economy, RBI papers and IMF data corroborates that India is a fastest economy.
Dr Arbind Prasad, former Chairperson, Jharkhand State Electricity Regulatory Commission recalled the outcome of 1991 reforms. According to him, this year budget would focus on Work from Home and provision of Digital infrastructure.
Mr. Narendra M., Former Chairman & Managing Director, Indian Overseas Bank elaborated on how to boost current year Govt expePluses of Economy consists of Expenditure on Social sector, Health Sector and Employment sector in coming two years by which India may be able to achieve growth rate 3.5% of GDP.
Mohammed Haleem Khan, former Secretary, Ministry of FInance, Govt of India highlighted Plus and Minus of our economy. According to him while huge market size; demographic dividend in terms of huge population i.e majority of population are within 25 to 40 years and Forex Reserve are positives for Indian Economy, Tax GDP ratio, Agriculture as the major source of Employment are major challenges today.
