Every year on Feb 1 (mostly), we spend couple of hours watching the Union Budget on TV or mobiles or laptops and then dismiss it as a non-event. This time it was different. We applauded as the Finance Minister hashed out a bold capex plan at the cost of fiscal prudence. FPIs applauded. Sensex & Nifty cheered. The Budget this year came with expectations of tax concessions (personal & corporate) and apprehensions of a COVID cess. Most desirably neither happened. I would say the Budget 2021-22 is bold, reformist and should have a positive impact on growth and employment. A delayed but much called for aggression; better late than never.
Having said that, might I also comment that the Budget is rurally trifle sore. Rural spending is expected to be –17% after clocking approximately 40% CAGR in the last two years. While I expected some moderation in spends given the very large income transfers during the pandemic, the contraction is quite steep. Rural India has been a great theme over the past years. Rural spends (with realistic moderation) should continue unabated to propel equitable socio-economic growth.
I can think of two very relevant stories of emerging victorious from crisis situations – from commercially importing milk in 1950s to being the leading milk producing country in the world with over 187 Million Tons of production per annum, from mortgaging our gold in the late 80s to coming to have forex reserves of about $ 600 Billion. We must not forget these stories in a hurry. As a nation we have always emerged stronger from crises. And 2020 was a crisis like nothing else; like never before. Come 2021, with COVID cases going down, human resilience coming to the forefront, people are fast returning to normal ways of life albeit in the face of many challenges. Economic activity is on the upswing and there is a discernible excitement in the air. In coming months, our vaccinations will cover millions and things will only get dramatically better. And now with Budget 2021 making a decisive pivot into the future, I remember Finance Minister Manmohan Singh, 30 years back, ushering in an unprecedented future, quoting Victor Hugo I believe India’s time has come …. I am having that feeling once again, India is back! It’s like the return of Arnold ‘Terminator” Schwarzenegger’ driving a truck through the front door, to rescue trapped protagonists to announce “I am back”.
However, notwithstanding the tinge of optimism in the air, I am concerned that many have thrown caution to the wind and are venturing out without masks or not following the mandated precautions, wishing COVID away. This may not be the best thing to do as excitement and hope do not prevent virus, safety measures do. So go on people, take care, stay safe, be hopeful of the future and drink plenty of milk. And when you do, please remember our brands; Prabhat, Tirumala, Anik, Saurabh and Lactel. Thank you kindly.
