Our Finance Minister Nirmala Sitharaman is all set to announce the Budget 2021 on February 1. With less than a week left for the Budget announcement, there are all sorts of fuming expectations across the entire nation.
People have high expectations from the Budget, which will be announced after the world economy was shut down for almost half of the year in 2020 and started to pick up.
What do you mean by the theme of Budget?
The Budget usually gives an idea about the government’s intention and focus of the particular sector and industry.
It throws light on the areas which are prioritised by the government for providing stimulus. The themes reflect the sectors and industries which are going to get a hand from the government.
What was the theme of Budget 2020?
The central theme of Budget 2020 was ‘Ease of Living ‘supported with three pillars.
(i) First was ‘Aspirational India’ where the focus was to improve the standard of living by giving easy access to health, education and employment opportunities.
(ii) Second was ‘Economic development’ for all by better productivity and efficiency.
(iii) Third was ‘Building a caring society’ which is both humane and compassionate. The focus of this was women empowerment, social welfare, preserving culture by promoting tourism.
The focus of Budget 2020 was boosting income, elevating the purchasing power and thereby improving the standard of living of the citizens.
Also Read: Budget 2021: A boost to e-commerce Industry is vital
What is the expected budget theme for 2021?
Budget 2021 that is to be announced on February 1 will go paperless for the first time.
This Budget is expected to address and focus around below mentioned themes.
- Growth and recovery
The biggest concern in the past year has been the decline of GDP. GDP of 2020-21 is estimated to have been contracted by -7.7 per cent. The government’s main focus would be reviving the pandemic hit economy’s growth by extending their hand to the sectors that have faced significant down growth. This could be done by providing some tax reliefs, subsidies, government expenditure on infrastructure etc. in these sectors like travel and tourism including aviation, hospitality, automobile, education, real estate, financial services etc.
Hence, ‘Growth and recovery’ could be one of the major themes of the Budget 2021.
- Strengthen Indian Agriculture
The Budget could significantly focus on the ‘Indian Agriculture Industry’ which has been of great support and stood still in these trying times. Despite GDP contraction, Indian agriculture reported a growth of 3.4 per cent in Q1 of FY 20-21.
The government shall consider spending more on improving the warehousing and cold storage facilities. India has only 6300 cold storage facilities out of which 60% are concentrated in UP, Gujarat, West Bengal and Punjab.
With the introduction of ‘Farm laws 2020’ there has been a lot of opposition and dissatisfaction amongst the farmers. The government would focus on providing reliefs to the farmers. Further, it remains to be seen what steps are proposed by the government to reach a consensus with the farmers either modifying or by accepting the demand from farmers to withdraw the three Farm laws, 2020.
- Focus on healthcare :
The pandemic showed us that no country could take health care lightly. Strong and robust health care should be the nation’s topmost priority. During the peak of covid cases, our country’s health care system struggled to provide beds and ventilators to the increasing number of patients which made the news headlines. Therefore the government would be keen on improving the health care system by increasing its expenditure. The government could also focus on research in medicine and pharmaceutical by increasing the spending in these segments.
- Creating Jobs
The Modi government may prioritize the creation of employment opportunities by giving a boost to the sectors which generate higher jobs. As per the statistics, the unemployment rate was highest on April 20 and May 20 in the wake of national-wide lockdowns due to pandemic. The situation improved from June 20; however, the unemployment rate remains an area of concern.
Budget 2021 would likely focus on investments/incentives in high employment generating sectors like infrastructure, construction, textiles, affordable housing, SMEs -MSME. These key areas may get priority focus from the government.
- Focus on housing development and affordable housing
The real estate sector’s growth plays an essential role in a country’s GDP, employment generation, and attracting domestic and global investments. The government may look into liberalizing the FDI (foreign direct investment) rules presently governing the real estate and increase grant of credit linked subsidies allowed on purchase of a residence in the Union Budget 2021.
The Union Budget 2021 is expected to give utmost importance to the major hit industries. It would be around the themes of “Growth and recovery of the economy, along with a boost to agriculture, healthcare, housing and manufacturing under Aatmanirbhar Bharat’.
For any clarifications/feedback on the topic, please contact the writer at jyoti.arora@cleartax.in
I am a Chartered Accountant by profession with 4+ years of experience in the finance domain. I consider myself as someone who yearns to explore the world through travelling & Reading. I believe, the knowledge & wisdom that reading gives has helped me shape my perspective towards life, career and relationships. I enjoy meeting new people & learning about their lives & backgrounds. My mantra is to find inspiration from everyday life & thrive to be better each day.
