P Chidambaram Union Budget

MSMEs dismissed in a sentence: allocation of ₹ 15,700 cr. Nothing to be done to revive closed units or to recover millions of lost jobs: P Chidambaram on Union Budget

Special Congress Party briefing by Shri P Chidambaram and Shri RS Surjewala via INC India :

Finance Minister deceived people of India, especially poor, working class, migrants, farmers, industrial units that had been closed down permanently, those who had lost their jobs, both regular & informal & are still looking for jobs

FM deceived those who were listening to her, especially MPs, who had no clue she had imposed cess on a large number of products including petroleum & diesel: ₹2.5 on petrol/ltr, ₹4.00 on diesel/ ltr is a cruel blow to average citizen, including farmers

It was a vengeful act against the thousands of farmers who took out the longest tractor rally in history. It was also a cruel blow to federalism because the states do not get a share of the revenue from cesses

FM in her speech, didn’t mention Defence, as if Chinese had vacated occupied Indian territory. She didn’t mention that Defence expenditure in 2021-22 will see no rise. It is ₹ 3,47,088 cr, same as ₹ 3,43,822 cr in current year

FM gave a figure of ₹ 2,23,846 cr for Health, breathtaking rise from current year BE of ₹ 94,452 cr. It was a conjurer’s trick. She added one-time vaccination cost- ₹ 35,000 cr & Finance Commission grants amounting to ₹ 49,214 cr

She also included allocations to Department of Water & Sanitation. Shorn of these add-ons, allocations for Health were ₹ 72,934 in 2020-21 and ₹ 79,602 crore in 2021-22. Given inflation, the increase is practically nil

On pg 10 of Budget at a Glance, two numbers are ₹ 82,445 cr & ₹ 74,602 cr which means a reduction in expenditure from current year level. What kind of additional health infrastructure can be built with this parsimonious allocation?

Hence, on the two non-negotiables that the Congress party had listed on 28th January (at the Press Conference), the government has miserably failed the people of this country

The fiscal numbers show that the fiscal situation is in a mess. The Revenue Deficit (7.5%) and the Fiscal Deficit (9.5%) in the current year have exceeded every prediction, including the government’s

In 2021-22 the govt estimates it will borrow about ₹ 3.42 lakh cr less, but nobody is willing to believe the govt. The ‘borrowing’ number has been under-stated by assuming that there will be disinvestment revenues of ₹ 1.75 lakh cr

Govt has also assumed that tax revenues will increase by 15%, another questionable assumption. RD (5.1%) & FD (6.8%) numbers for 2021-22 will send alarm signals to rest of the world, especially investors & international lenders

Apprehensions should have been allayed by laying out a credible fiscal correction path, year by year, until the year when the FD will be 3% or less. On the contrary, her target was 4.5% by 2025-26. Investors and lenders will bristle

It was expected that there will be a significant increase in govt expenditure to offset private investment & private consumption. Numbers show that total govt expenditure will see a paltry rise from ₹ 34,50,305 cr to ₹ 34,83,236 cr

Farm Sector has been shortchanged. Budget allocation form ‘Agriculture & Allied Activities’ has been reduced from ₹ 1,54,775 cr (BE) to ₹ 1,48,301 cr (BE). Of total expenditure, proportion has been reduced from 5.1% to 4.3%

Budget allocation for Market Intervention Scheme & Price Support Scheme has been slashed from ₹ 2000 crore to ₹ 1501 crore. Budget allocation for PM Kisan Samman Nidhi has been reduced from ₹ 75,000 crore to ₹ 65,000 crore

MSMEs dismissed in a sentence: allocation of ₹ 15,700 cr. Nothing to be done to revive closed units or to recover millions of lost jobs. FM seems unaware that thousands of MSMEs- esp. micro & small units have been closed permanently

A meagre sum of ₹ 20,000 cr has been set apart for recapitalisation of Public Sector Banks. Govt also intends to privatise two PSBs. Govt’s intent is clear: let PSBs bleed slowly so they can all be privatised in the short term

Tax reliefs, tweaking provisions of tax laws completely by-passed tax paying working class and middle class. Each one of the measures announced by the FM will benefit only the taxpayers among the richer classes

There was no cut in GST rates. Mess of multiple rates remains. Saga of protectionism continues. Customs duties have been increased on a number of items with wrong belief that a stiffer dose of protectionism will help Indian industry

FM paid special attention to poll bound states, announced large capital outlays for Kerala, Tamil Nadu, West Bengal & Assam. People are no fools, they know expenditure will happen after scheme approval & over a period of several years

FM promised a Budget “like never before”. Her mandate was to present an annual statement of revenue & expenditure for 2021-22. What she did was to estimate expenditure over 2 years or 3 years or 4 years or, in one case, over 5 years

FM made a reference to Hon’ble PM 14 times, to farmers 11 times. 40 minutes before she read para 141, Bloomberg put out FD & RD numbers for 2020-21! Budget was a let down like never before. Budget, like the previous one, will unravel sooner than you think

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