Budget 2022: How Union Budget Growth Is Shrinking

The Union Budget for the financial year 2022-23 will be presented on February 1, 2022, before which the Finance Ministry may release its Economic Survey. Amid the coronavirus pandemic and its deleterious effects on the economy, all eyes are on the red account books wrapped around the  Budget to be announced this year.

The stated aim of the Modi government has been to make India a ‘5 trillion dollar economy’, and for that, the government will need to increase its total budget proposals, but if we see the figures of the recent past we find that instead of increasing, the total budget growth of the country is in fact declining over the past few years. The Budget for 2021-22 saw a marginal increase of only 0.9%.

During the first wave of the pandemic in May 2020, the Finance Ministry had declared a ₹20 lakh crore ‘economic package’, which failed to show much effect on the ground. Jobs were lost on a big scale, hundreds of MSME’s were forced to close down, traders committed suicide, but after all that, what became of the ‘economic package’ remains a mystery and no concrete information is available.

It was hoped that in the 2021-22 Budget the government would present its ‘report card’ on how far the package was successful in its aims, but the amount set aside for it found no mention in the Budget at all. A trader in Pune filed an RTI with the Central government in this regard.

Through this, it became known that the Centre spent ₹3 lakh crore under the Emergency Credit Line Scheme for states, and nothing could be garnered about the other ₹17 lakh crore.

The Centre had also termed the 2021-22 Budget as a ‘Mini Budget’ which saw only a 0.9% in the total allocation over the previous one. Comparitively, the 2020-21 Budget saw an increase of 12.4%: the total allocation in 2019-20 was ₹26,86,330 Crore against ₹30,42,230 Crore in 2020-21.

The Budget allocation has seen a decline since the announcement of demonetization in 2016. It saw a growth of 9.7% in 2016-17 whichh came down to 8.1% growth in 2017-18, and then 7.7% in 2018-19. This shows that demonetization dealt a body blow to the country’s economy which was further compounded by the pandemic.