Budget doubles spending on health and launches privatization wave . . .
Prime Minister Narendra Modi billed India’s 2021 Union Budget as a “vision of self-reliance” shortly after Finance Minister Nirmala Sitharaman presented the C$640-billion package to Parliament yesterday. The budget proposes to increase health spending by 137 per cent to C$39.6 billion, boosting the historically underfunded health-care sector. Infrastructure and financing also feature prominently, with plans to establish a Development Finance Institution with starting capital of C$3.4 billion to fund large-scale infrastructure projects and an asset management company to take over debt burdens from highly stressed state banks. Most notably, however, the government announced a goal to privatize a large swath of the country’s public sector, aiming to disinvest C$29.5 billion by the end of 2021. Public companies on the block include Air India and two state-owned banks. Markets rose as investors signalled their approval, and economists estimated that India’s economy would grow by 11 per cent this year with the aid of the budget.
Opposition: Budget lacks “human aspect,” neglects poor . . .
However, opposition parties criticized the government for supporting “crony capitalists” at the expense of the unemployed and poor, especially amidst the pandemic. For instance, rural development schemes were cut by 10 per cent, and a national program addressing rural unemployment was cut by more than C$6.6 million compared to last year’s spending. This despite millions of rural-to-urban migrant workers returning to their villages without jobs due to the pandemic. Allocated funding for a national food support program, which spent an estimated C$73.6 billion last fiscal year, was set at C$42 billion in a bid to prevent the program from borrowing more money. By the end of 2020, India’s national unemployment rate sat at 9.1 per cent, with more than 85 million people estimated to have fallen under the poverty line since the beginning of the pandemic.
Farmers sidestepped as they clamour at the gates of Delhi . . .
The budget was perceived by both farmers and their political supporters as “silent” on agricultural concerns as police set up razor wire and dug trenches to prevent protesting farmers from storming the capital during the budget presentation. Protest leaders complained that the budget, which boosts agricultural credit and invests in agricultural infrastructure, benefits large buyers while sidestepping farmers’ concerns about price levels and neglecting a government promise to double farmers’ income by 2022. Meanwhile, Punjab’s finance minister charged that the budget ignores the “entire north India.” The Modi government’s ‘pandemic budget’ will likely not contribute to resolving the farm protests that have gripped the nation since the end of last year.