: Union Budget 202122 is path breaking: CUTS International #FinanceIndia #StockMarketNEWS Union Budget 2021-22 is path breaking: CUTS International New Delhi, Feb 3 (KNN) Reacting over the Union Budget

@StockMarketNEWS Wed 03 Feb, 2021

Posted in: #FinanceIndia #StockMarketNEWS

Union Budget 202122 is path breaking: CUTS International #FinanceIndia #StockMarketNEWS
Union Budget 2021-22 is path breaking: CUTS International New Delhi, Feb 3 (KNN) Reacting over the Union Budget 2021-22 presented by the Finance Minister Nirmala Sitharaman with significant focus on infrastructure, health, and agriculture sectors, Pradeep S Mehta, Secretary General, CUTS International said that the Budget is path breaking.

“The Budget is path breaking, and this is fact and not flattery,” he said.

The budget focuses on building the institutional capacity of the healthcare sector, with the total outlay for health and well-being being Rs 2,23,246 crore.

“The focus on health is heartening to note and will result in preserving human capital. Time bound implementation will be the key through coordinated actions at central, state, and district levels”, noted Mehta.

The budget has also recognised the need for infrastructure financing and has proposed setting up of a professionally managed Development Financial Institution.

“Infrastructure development can contribute significantly to job creation and push demand in the economy. However, we need to learn from our experiences of the public-private-partnership (PPPs) model. The recommendations of Kelkar Committee on PPPs and adoption of People first PPP model will be essential to ensure that citizens are not short-changed”, quipped Mehta.

To finance development, the fiscal deficit has been pegged at 9. 5 per cent of GDP, and the government hopes to get back on the fiscal consolidation path by FY26. Waiver from fiscal consolidation path was expected owing to pandemic and economic downturn, however, this can unreasonably burden future taxpayers.

An efficient fiscal management system is required to ensure that funds are raised, managed and spent in the best interest of citizens. For this, a Fiscal Council can be set up comprising experts in public finance to support the government.

The budget notes that monetizing operating public infrastructure assets is a very important financing option for new infrastructure construction. On the similar lines, it has proposed strategic disinvestment of public sector undertakings. These steps are in the right direction, must be completed in a time-bound manner, and support must be provided to state governments to replicate them.

The budget also aims to promote consumer choice by enabling competition in the electricity distribution sector. While a step in the right direction, there is a need to clean out the debt of discoms and institute real independent regulators to ensure arms-length distance from politically influenced governments, noted Mehta.

To further consolidate the financial capacity of public sector banks (PSBs), recapitalization of Rs 20,000 crores is proposed in 2021-22.