Under Article 112 of the Constitution of India, an Annual Financial Statement is presented to the Parliament every year. This is called a budget in a common language. This year, the Finance Minister of India Mrs. Nirmala Sitharaman presented the Union Budget for Financial Year 2020-21 on 1 February 2020, a second budget presented by her. Sitharaman has the distinction of not only being the second woman to present the budget in Parliament after Mrs. Indira Gandhi but also giving the longest ever budget speech in the Indian Parliament, lasting over 2 hours 41 minutes.
This is also the second budget of PM Modi led government in its second term as well. Last year a vote on account was presented before the election and full budget was presented in July, after the election result.
This year's budget is considered to be focused on social and welfare sectors along with introducing some continuity in the reforms. To put the budget into context, it is important to note that India is the fifth largest economy and has grown at an average of 7.4% during 2014-2019. Alongside economic growth, India has uplifted more than 271 million people out of the poverty line during 2006-16. India's Foreign Direct Investment during 2009-14 was about USD 190 billion and it increased to USD 284 billion during 2014-19.
India's centre government debt was 52.2% of GDP in 2014, now it stands at 48.7%, a remarkable reduction. With this fundamental strength of the economy, Finance Minister focused on three main themes in this budget: Aspirational India, Development for all and Caring Society. The Budget allocates Rs 99,300 crores to Education sector; Rs 1,38,700 crores to the welfare and upliftment of the weaker sections of the society; Agriculture gets Rs 1,38,000 crores; Rural development Rs 1,23,000 crores and healthcare Rs 69,000 crores. The budget announced a 16-point agenda for agriculture and blue economy to boost these sectors. More credit will be given to farmers as the target for 2020-21 is set at Rs 15,00,000 crore.
In the blue economy, the country aims to achieve Rs 1,00,000 crore export by 2024-25. New Education policy will be announced soon for India. Health sector with 10% increased allocation also focused on the budget where the government has started a campaign 'TB Harega, Desh Jeetega' to eliminate tuberculosis by 2025. On personal income tax, the Finance Minister proposed some relief as well.
Five new smart cities are proposed to be developed under the infrastructural front. There will be an investment of Rs. 100,00,000 in infrastructure during the next five year period. Development of highways will become faster as the budget envisages to create 2500 km of access control highways, 9000 km of economic corridors, 2000 km of coastal and land port roads and 2000 km of strategic highways. On the sidelines of railway tracks, on railway owned land, large solar power projects will be established. There are many other majors taken in the budget to accomplish the goal of becoming USD 5 trillion economy by 2024-25. The growth rate for 2020-21 is estimated at 6-6.5% by the economic survey released on 31 January 2020, a document which is customarily released prior to the budget presentation.
(Expressed opinions are personal.)