Budget 2022: The general budget to be presented on February 1 this year is estimated to be affected by two factors. First, there is an election to be held in five states including Uttar Pradesh, it is expected that Finance Minister Nirmala Sitharaman would have taken care of this in the budget. North Block officials may bring out a popular budget full of promises and subsidies for the financial year 2022-23. Apart from UP, elections are also going to be held in Punjab, Uttarakhand, Goa and Manipur. Counting in all states will be done on March 10.
The second factor will be the third wave of COVID-19, which will be taken care of in the budget. The third wave has started from December. However, estimates of the size and intensity of this wave can change the budget estimate, so accurate prediction will be important for a good budget.
The effect of the third wave may remain limited.
According to a report in Economic Times, NITI Aayog Vice Chairman Rajiv Kumar said that Omicron’s wave is growing rapidly and its economic impact in January and February may be limited due to the rapid decline. He says, “This time the odds are much less. So my estimate is that the GDP growth for 2021-22 will be 9-9.2 per cent, which is a little lower than expected.”
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Emphasis may remain on rural sector
According to officials and economists, the ruling Bharatiya Janata Party (BJP) has a lot at stake in Uttar Pradesh, a predominantly rural state that is seen as crucial for the 2024 Lok Sabha elections. That is why there may be more emphasis on the document rural sector.
No direct mention of electoral state
Economist and former Chief Statistician of India Pranab Sen says, “I expect a large number of promises to be included in the budget.” Pointing to the government’s avoidance of directly mentioning an election state in the document, he said, “BJP’s slogan for UP is ‘double engine’. This means that some effort will be made in the budget at the central level along with some national schemes, which will benefit states like UP.
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Emphasis will be on demand creation
“Given the need for demand creation, the government can focus on job creation and skilling the workforce,” says Rumki Mazumdar, an economist with Deloitte India. He expressed hope that the budget would try to boost growth and maintain stability.
Electoral states can get indirect gifts in the budget
Now, assuming Sitharaman announces a job scheme for rural youth or increases subsidies for schemes that are already in place, she won’t give much details because of the model code of conduct. This will benefit the youth of UP and Uttarakhand. This will only include the message and the campaign manager will push the associated slogan.
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