While India has slowly moved on from two horrible COVID waves and is currently battling a third Omicron wave, it should be no surprise that the expectations from the Union Budget 2022-23 were especially high for the common masses. Trying times like these stipulate that the Union Budget be more than just an annual activity.
The Union Budget 2022-23, presented in a one-hour-thirty minutes speech has been analyzed and broken down for the masses repeatedly since Feb 1, 2022. While the nature of the budget can be deliberated on, again and again, it may help to understand that the post-pandemic budget mentioned the word “poor” just twice in paragraph 6, at a time when the following grim facts stare the government in the face- in the latest two years, millions of jobs have been lost, approximately 60 lakh MSME’s were closed down, 84% of households have suffered the loss of income and 4.6 crore people have been pushed into extreme poverty. While the FM outlined a plan for the next 25 years ( Amrit Kaal), it may not be preposterous to question whether the Indian masses needed such ambitious designs 25 years down the future or whether the sense of urgency should be reserved for the very present.
Having said that, the aspects of budget largely welcome demand their due share of recognition as well. The FM has promised capital expenditure of Rs.7,50,000 crores in 2022-23, in addition to an additional borrowing of Rs.1,00,000 crores to the states, free of interest. The education sector has received Rs.1, 04,278 crores, an 11% hike from budget estimates of 2021-22.
One of the strongest aspects of the budget is the government’s focus on strengthening the country’s infrastructure. PM Gati Shakti is said to lead 7 engines of growth in the economy. The government’s enthusiasm for digitization is no less as well. The government has recognized cryptocurrencies as “digital assets”, which will now be taxed at 30% on transfer. The government plans to issue a digital currency, as well as set up 75 digital banking units in 75 districts in India.
While the minimum alternate tax for cooperatives has been reduced to 15%, the budget did not mention cutting indirect taxes, especially GDP, or even giving tax relief to the tax-paying middle class. All key subsidies have been slashed and the total subsidy bill has been cut by 27%. The FM has promised 60 lakh jobs in 5 years, at a time when the unemployment rate in December 2021 reached a four-month high of 7.91%. This is in contrast to the fact that 42 Indian start-ups entered the Unicorn Club in the same year and a mere 142 people in India saw their wealth increase from Rs.23 lakh crores to Rs.53 lakh crores. This 30 lakh crore increase in wealth is humongous, especially when the total receipts of the Government of India stood at 40 lakh crores in the same year.
There is an increasing divide between the rich and the poor, which indicates that India might be heading towards a K-shaped recovery, as many economists have feared. There is an urgent need for more balanced growth in the economy, as we recover from the debilitating effects of the COVID-19 pandemic.