Union Budget 2021-2022 An Analysis

Centre for Research in Social Sciences and Education (CERSSE), Jain (Deemed-to-be University) hosted a panel discussion to analyse the Union Budget 2021-22 on February 4, 2021. Prof. R S Deshpande - Former Director, Institute for Social and Economic Change (ISEC), Bengaluru, Dr. S R Keshav - Professor of Economics, Bangalore University, Bengaluru and Dr. Xavier V K - Professor and Head of Department, Economics, School of Humanities and Social Sciences, (SHSS), JAIN being the panellist, Dr. Priyanca Mathur -Associate Professor, JAIN, hosted and moderated the discussion. The discussion was attended by over 100 participants from the field of academia.

Prof. Deshpande initiated the discussion by stating that there has been an effort by the NDA Government to give an overview of what is in the Budget, what is to be expected by the people, how to counter the enemies that confronted the Indian Economy during the last year viz, infrastructural fragility, growth, lurking inflation, the industrial sector, and unemployment.

During the discussion, Dr. Keshava pointed out that international institutions like the IMF and World Bank had predicted India’s GDP to decline and presented a lot of numerical data about the inflation rate, GDP, economic factors, and more. He also mentioned the major aspiration of the people to recover from the pandemic and how poverty and unemployment are the biggest challenges. He also expressed that although the budget holds good, there was nothing extra-ordinary as it claims to be

Dr. Xavier believed that the Budget is “Taxing Peter to Pay Paul”. The middle-class earners’ Marginal Propensity to Consume is quite high and they contribute the tax revenue to the government. They should be compensated when income and livelihood were lost during the pandemic. He also mentioned that disposable personal income is the main contributor to aggregate demand. Customs, at 3%, are the least contributor to government revenue, and therefore, Dr. Xavier believes that increasing the import duty will not have much effect on the revenue side of the economy

After the discussion, the Panellists addressed the questions asked by the audience and expressed the hope that implementation of all the good points of this budget would take place in the current fiscal year so that the fruits could be trickled down to all the sections of society and only then inclusive development will see the light of the day.