Swarajya Logo
Swarajya Logo
Politics States Economy Society Business Culture Infra Defence World Books Ideas Science Technology Heritage Archives Legal Movies Sports
  • Our Views
    Politics States Economy Society Business Culture Infra Defence World Books Ideas Science Technology Heritage Archives Legal Movies Sports
  • Magazine
  • Store

About Swarajya

Swarajya is a publication by Kovai Media Private Limited.

Swarajya - a big tent for liberal right of centre discourse that reaches out, engages and caters to the new India.

editor@swarajyamag.com

Useful Links

  • About Us
  • Subscriptions Support
  • Editorial Philosophy
  • Press Kit
  • Privacy Policy
  • Terms of Use
  • Code of Conduct
  • Plagiarism Policy
  • Refund & Cancellation Policy

Useful Links

  • About Us
  • Subscriptions Support
  • Editorial Philosophy
  • Press Kit
  • Privacy Policy
  • Terms of Use
  • Code of Conduct
  • Plagiarism Policy
  • Refund & Cancellation Policy

Participate

  • Contact Us
  • Write for us
  • Style Guide
  • Jobs

Stay Connected

  • Artboard 2 Copy 6Created with Sketch.
    Artboard 2 Copy 10Created with Sketch.
    Artboard 2 Copy 7Created with Sketch.
    Artboard 2 Copy 9Created with Sketch.
  • Andriod Logo
  • IOS Logo

Economy

Budget 2022 Is Unglamorous, And That's Good News!

Pratim Ranjan BoseTuesday, February 1, 2022 3:47 pm IST
No populist announcements in the Union budget 2022
No populist announcements in the Union budget 2022
No populist announcements in the Union budget 2022
  • No populism! The budget focuses on infrastructure creation to pave the way for investment, employment, and human development.
  • A crisp 90-minute presentation without any populist announcements, like cash handouts, that many expected, but with a clear focus on social and physical infrastructure creation and helping states through interest-free loans to be a part of the journey — this is the sum-up of Finance Minister Nirmala Sitharaman’s budget presentation this year.

    And that’s exactly what it should have been. This writer pointed out last week that fiscal situations, potential inflationary pressures, and global uncertainties offer little scope to splurge. The government has already announced big-ticket programmes and it is time to implement them. As it turned out, the budget stuck to that principle.

    Infrastructure and Job Creation

    The primary focus area of this budget has been the efficient implementation of transport, transit, and digital infrastructure projects, with a special emphasis on PM Gati Shakti to ensure optimal utilisation of resources.

    The Rs 100,000-crore three-year interest-free loan window opened to states (over and above the existing borrowing windows) to undertake capital investment under PM Gati Shakti will encourage the building of allied digital and physical infrastructure to make central capital expenditure more useful.

    India suffers from a high logistics cost-to-GDP (gross domestic product) ratio (14 per cent) as against 7-8 per cent globally. The sharp focus on efficient infrastructure creation will go a long way in closing the gap and improving the core competence of both manufacturing and services, thereby helping attract investment, which is the primary enabler of employment.

    The pandemic led to structural changes in the world economy, which is impacting employment generation potential. In India, the introduction of the GST (goods and services tax) and UPI (unified payments interface) digital payment interface are bringing about very sharp changes.

    A look at the high-frequency data in Economic Survey 2022 will reveal that organised sector employment has been increasing probably at the fastest pace. This is in sharp contrast to the high 8 per cent urban unemployment pointed out by the Centre for Monitoring Indian Economy.

    To understand the catch, one must also look at the sustained rise in average monthly GST collection, which was the highest in January 2022, and the parallel popularity of UPI payments.

    Between January 2019 and December 2021, the UPI payment volume increased nearly seven times. During this period, ATM cash withdrawals remained stagnant or had been in decline.

    Cash circulation in the economy went up during 2020 due to lockdowns. This was a global phenomenon. But, as in 2021, cash circulation remained stagnant despite economic recovery.

    The bottom line is that the Indian economy is formalising at a rapid pace. Efficiency is improving and it will have parallel displacements in the low- or semi-skilled job market. Automation is rising in the corporate sector and will probably peak this decade as the great investment rush begins.

    Unlike in the past, the government cannot offer any quick-fix solutions to employment generation. Infrastructure rush and the rush of private investment in the manufacturing and services value chain and skill development are the only solutions. The higher the level of investment, the greater will be the job creation potential. The budget is facilitating that.

    It must, however, be underlined that the goal to enhance capital expenditure by 35 per cent will depend in a big way on the success of asset monetisation and disinvestment and of privatisation programmes already announced by the government.

    The Finance Minister didn’t give any details on the progress on the asset monetisation front in her speech. She, however, talked about the progress in divestment of government stake in Neelachal Ispat, LIC IPO, and so on.

    Health and Drinking Water

    Though less discussed, the Modi government made a tremendous contribution to India’s social sector over the last seven years.

    Swachh Bharat made India open defecation free. Ayushman Bharat created an ecosystem for affordable health care in the private sector apart from helping millions to access quality health care. Sustained focus on rural electrification and availability of quality power through schemes like Saubhagya, and near-universal access to cooking gas changed lives.

    Successful implementation of these social sector schemes, particularly rural electrification, was a major reason behind the re-election of the Modi government in 2019. In 2024, the government will seek re-election based on the success of two major schemes, universal affordable housing and access to tap water (Jal Jeevan Mission).

    The budget presentation underlined the allocation of nearly Rs 1.10 lakh crore in these two schemes during 2021-22 and 2022-23. The PM housing scheme alone is provided with Rs 48,000 crore.

    Rolled out in August 2019, the Jal Jeevan Mission aims to provide safe drinking water through individual household tap connections to all 19 crore rural households by 2024. As of 2019, only 3.23 crore (17 per cent) rural families had tap water connections.

    The Economic Survey pointed out that an additional 5.5 crore households have been provided with tap water connections since 2019. The Union budget 2022 promised to offer individual tap water connections to another 3.8 crore in 2022-23, thereby enhancing the coverage to almost 66 per cent of rural households.

    Meanwhile, fresh initiatives are undertaken in the health sector. The roll-out of the National Digital Health Ecosystem will be a watershed development.

    Digital registries of health providers and health facilities and a unique health identity will go a long way in addressing the known maladies in the sector and protecting citizens from malpractices. The health insurance penetration and coverage may witness unprecedented growth.

    Regulatory Changes

    The budget proposed many regulatory changes. Three of them are worth mentioning here.

    First, allowing taxpayers to update their income tax returns within the next two years is a welcome move. It will reduce litigation and increase voluntary compliance.

    Second, earnings from cryptocurrency trade will finally be taxed.

    Third, the removal of customs duty exemptions on a wide range of items.

    Selective duty exemptions are a carry-forward of the licence-permit raj and broadly a result of the corporate-politics nexus. The Finance Minister did well to remove them.

    However, a selective increase in duty on umbrellas, etc, was against this principle. It is understood that the decision was taken to protect small domestic manufacturers.

    Tags
    Indian economy
    Nirmala Sitharaman
    Indian public health care
    budget speech
    Infrastructure Creation
    Drinking water access
    PM Gati Shakti
    National Digital Health Ecosystem (NDHE)
    Union Budget 2022-23

    Comments ↓

    An Appeal...


     

    Dear Reader,

     

    As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.

     

    Our business model is you and your subscription.  And in challenging times like these, we need your support now more than ever.

     

    We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.

     

    Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.

    Get Swarajya in your inbox.


    Merchandise

    Merchandise


      States

      Magazine


      Swarajya Magazine Cover Image

      Politics

      BJP Eyes 2024 Lok Sabha Elections In Selection Of Chief Ministers For MP, Rajasthan And Chhattisgarh: Report

      BJP Eyes 2024 Lok Sabha Elections In Selection Of Chief Ministers For MP, Rajasthan And Chhattisgarh: Report

      Swarajya Staff
      24m

      Not Like The Old Times: BJP's Feeble Victory In Rajasthan (Part I)

      Venu Gopal Narayanan
      14h

      "Not Winning Solely On Modi's Popularity": Prashant Kishor Lists Out Four Reasons For BJP Victories In Three States

      Nishtha Anushree
      16h

      Economy

      India Anticipated To Be Fastest Growing In Next Three Years, Set to Become Third Largest Economy By 2030: S&P

      India Anticipated To Be Fastest Growing In Next Three Years, Set to Become Third Largest Economy By 2030: S&P

      Nishtha Anushree
      20h

      Sensex Surpasses 69,000 For First Time As Investor Confidence Surges Post BJP Sweep In Three States

      Bhuvan Krishna
      22h

      Sensex, Nifty Close At All-Time High After BJP Victories In Three States, Record Surge Of Over 2 Per Cent

      Nishtha Anushree
      2d

      Defence

      On This Day, In 1971, Indian Navy Struck Pakistan's Naval Fleet At Karachi, Sank PNS Ghazi At Visakhapatnam, And Decimated Tanks In Longewala

      On This Day, In 1971, Indian Navy Struck Pakistan's Naval Fleet At Karachi, Sank PNS Ghazi At Visakhapatnam, And Decimated Tanks In Longewala

      Ujjwal Shrotryia
      17h

      On This Day, In 1971, Indian Air Force Struck Pakistani Installations For The Second Straight Day, Setting Stage For Historic Naval Raids On Karachi

      Ujjwal Shrotryia
      2d

      IAF's Mighty 'Mi-26,' Able To Lift Chinooks, Set For Overhaul With Russian Help

      Ujjwal Shrotryia
      2d

      World

      Moody's Downgrades China's Credit Ranking From Stable To Negative Citing Continuous Contraction Of Property Sector

      Moody's Downgrades China's Credit Ranking From Stable To Negative Citing Continuous Contraction Of Property Sector

      Nishtha Anushree
      16h

      Not Enough Joining US Military: Here's An Interesting Solution By A Senator — Let Illegal Immigrants Join, In Exchange For Citizenship

      Swarajya Staff
      22h

      Chinese Economic Crisis Deepens As Debt Defaults Reach Record High

      Swarajya Staff
      2d

      Culture

      'Celebrate At Home': Champat Rai Of Ram Janambhoomi Trust Urges Hindus Not To Visit Ayodhya On 22 January

      'Celebrate At Home': Champat Rai Of Ram Janambhoomi Trust Urges Hindus Not To Visit Ayodhya On 22 January

      Bhuvan Krishna
      22h

      'Animal': Sandeep Reddy Vanga 2 – Liberals 0

      K Balakumar
      4d

      Why The Insidious Anti-Hindu Communalism Of Certain Directors Goes Scot-Free

      Anonymous Contributor
      4d

      infrastructure


      Arun Kumar Das
      1

      ‘Sustainable All-Round Development Is The Only Way Forward’: Venkaiah Naidu At IIR-2023

      2 Mins Read
      Arun Kumar Das
      2

      Delhi Metro: DMRC To Start Audio-Based Advertisements In Trains

      2 Mins Read
      Arun Kumar Das
      3

      Delhi-Meerut-Ghaziabad RRTS: Power Supply Commences Beyond Priority Section On Rapid Rail Corridor

      2 Mins Read
      Amit Mishra
      4

      Groove On The Go: Delhi Metro Unveils Pilot Project For Audio Ads And Jingles

      1 Mins Read