Tag: Union Budget 2021

Defence Budget’s Arcane Format Makes It a Largely Unresolved Puzzle

If the definition of India’s defence budget is suitably aligned with analogous international practice, it can do away with the ambiguity that presently prevails.

Like most official documents, India’s defence budget is a mystifying puzzle, necessitating a mix of patience, intellectual dexterity, experience, and informed guesswork to decipher it. Even then, one is almost certain to not get an accurate picture. Fundamental questions like how much has been allocated for defence expenditure during a particular fiscal and what has been the increase vis-à-vis the previous year can elicit varying responses.

The Press Information Bureau (PIB) release on February 1, after the budget was tabled in the Lok Sabha, for instance, states that the defence allocation for the financial year 2021-22 (FY22) had been increased to Rs 4.78 lakh crore without mentioning the base figure for measuring the extent of increase. This is significant because one can measure the increase with reference to the budget estimate (BE) or the revised estimate (RE) of the previous year, and come to a vastly divergent conclusion.

The term BE refers to the allocation made in the Union Budget which is reassessed normally by the end of the fiscal’s third quarter based on the actual utilisation of funds as also the unforeseen requirements that may have cropped up during this period. This reassessment forms the basis of the RE. The BE 2020-21 was Rs 4.71 lakh crore but the RE went up to Rs 4.87 lakh crore, due largely to the military stand-off with China in eastern Ladakh which emerged in May 2020.

The increase for FY22 works out to 1.45% with reference to the BE 2020-21 but it would be in the negative if it is related to the RE 2020-21 which is arguably more representative of the actual requirement for any given year. This uncomfortable fact can, however, be veiled by asserting that the BE 2021-22 amounts to 2.15% of the estimated gross domestic product (GDP) and 13.73% of the total Central government expenditure (CGE) for the upcoming fiscal.

Meanwhile, what makes it more complicated to understand the defence budget is the inclusion of military defence pensions. If this large amount of Rs 1.35 lakh crore were excluded from it, the defence budget for FY 2021-22 would fall to Rs 3.62 lakh crore or to 1.63% of the GDP and 10.4% of the CGE for the next fiscal. The PIB release mentions this figure and claims that it represents an increase of Rs 24,792.62 crore over FY 2020-21. This is true only if the increase is calculated with reference to the BE 2020-21; relative to the RE 2020-21, the increase is only Rs 2,609.56 crore.

Also read: Who Thinks for the Ministry of Defence?

But even this entire amount of Rs 3.62 lakh crore is not exclusively available to the armed forces, as it also includes allocations for ancillary defence-related organisations: ordnance factories (OFs), Defence Research and Development Organisation (DRDO), the Armed Forces Tribunal (AFT), the Indian Coast Guard, the Border Roads Organisation, the Defence Estates Organisation, and the Ministry of Defence’s vast secretariat staffed by civilians.

It also includes allocations for Rashtriya Rifles (RR), Military Farms (MFs) – despite their closure being announced in 2017 – the National Cadet Corps (NCC), Ex-Servicemen’s Health Scheme (ECHS), and the Director General of Quality Assurance, responsible for ensuring the desired quality levels of defence equipment procured, or in use, by the military.

If allocations for all these sundry organisations listed above and defence pensions is subtracted from the total defence outlay, the armed forces will be left with only Rs 3.12 lakh crore for their revenue and capital expenditure. Consequently, this totals to a mere 1.4% of the GDP and 8.96% of the CGE – substantially lower than the overarching defence budget which, as stated earlier, is 2.15% of the GDP and 13.73% of the CGE.

As would be evident by now, several permutations are possible, each one leading to a different conclusion. Its plasticity also results in analysts selectively bandying around these computations to defend, or assail, India’s defence budget, depending on their political and ideological persuasions.

Limited information

Such confusion can be avoided if the definition of India’s defence budget is suitably aligned with analogous international practice. The Stockholm International Peace Research Institute (SIPRI), for instance, calculates various countries’ military expenditure by incorporating all current and capital expenditure of the armed forces, defence ministries and other government agencies engaged in military-related projects. Paramilitaries, when deemed to be trained and equipped for military operations, and defence-related activities too are included by SIPRI in their computations.

Further, SIPRI calculates current and capital expenditure by including expenditure on salaries of military and civil personnel, retirement pensions and social services of defence personnel, operations and maintenance and materiel procurement. Military research and development, military infrastructure spending, and military aid also comprise the defence budget, according to the Stockholm-based Institute. Employing such standardisation in India can greatly simplify matters and do away with the ambiguity that presently prevails.

Defence minister Rajnath Singh inspect weapons at the Sukna Army Camp in Darjeeling on October 25, 2020. Photo: Twitter/@DefenceMinIndia

The arcane format in which India’s defence budget is presented too is problematic, as this provides no explanation for the increase or decrease in allocation compared to the previous fiscal. Limited information on this count is captured in the Standing Committee on Defence (SCoD) reports – mercifully available online – but for the most part, the information is disjointed, inconsistent and unstructured, leaving the budget riddle largely unresolved.

Budget documents on the Ministry of Finance (MoF) website too do not reveal the amounts separately allocated for military rations, clothing, ammunition, spares and related items, all of which are bewilderingly clubbed under an imprecise head: stores. In fact, this omnibus budget head caters for expenditure as diverse as airframes and engines to research and development projects of the Army Training Command (ARTRAC) headquartered in Shimla.

For sure, some broad details elaborating on ‘stores’ and other budget heads can be culled out from the detailed demands for grant (DDG) that are presented by the MoD to the parliament following the presentation of the Union Budget. But this too is complicated as the DDGs are presented in two booklets: defence services estimates, or DSE, and DDG for the MoD, which confusingly also includes defence pensions. Unfortunately, these documents are unavailable on the ministry’s website, or at any other outlet, despite being unclassified.

Even the DSE, at any rate, is of little or no assistance. For example, if one is seeking information on how much additional expenditure has been incurred on ‘emergency purchases’ of platforms, ammunition, missiles and varied high altitude clothing following the recent Chinese intrusion into Ladakh, the DSE would offer no disclosures.

Similarly, the DDG booklets are unlikely to contain any explanation as to why the allocation for defence pensions for FY22 is Rs 17,975 crore less than the BE 2020-21, or why the RE 2020-21 is Rs 8,825 crore less than the BE of the same year. This unexplained decrease has already given rise to much speculation over the past few weeks since the budget was presented, among serving and retired military personnel and further wrapped the riddle of the defence budget into an enigma.

Also read: India Must Chart Out a National Security Strategy for a Changing Geopolitical World

Military modernisation

The most eagerly awaited part of the defence budget, however, is the capital outlay which, at times, is mistakenly equated with the ‘modernisation’ budget. The putative ‘modernisation budget’ is an imaginary or notional subset of the capital outlay catering for expenditure on new acquisition programmes and for defraying payment related to ‘committed liabilities’ arising from the previously concluded contracts.

The other subset, with no fixed nomenclature but at times referred to simply as ‘other than capital acquisition’ budget, covers expenditure on acquisition of land and execution of military-related civil works. But all these categorisations are missing from the budget document leaving the amount allocated for ‘military modernisation’ to informed speculation for any given year.

Returning to the present, the capital defence outlay for FY22 is Rs 1.35 lakh crore, some 18.75% higher than the BE for the present fiscal and appears to be a ‘healthy hike’, till one examines the fine print.

First, as indicated earlier, the overall capital outlay includes allocations for acquisition of land and execution of military-related civil works, as well as for the workings of DRDO, OFs, RR, MFs, ECHS, NCC, DGQA and for prototype development. If all these elements are excluded, the ‘modernisation budget’ would drop to approximately Rs 1.13 lakh crore.

Secondly, the total capital outlay was increased by Rs 20,776 crore in the RE 2020-21. Comparatively, the BE for FY22 is only Rs 550.72 crore more than the RE for FY21, an increase of just 0.41%. This is a far cry from the 18.75% hike declared by the PIB, seemingly based on a relatively speculative BE-to-BE comparison.

Intriguingly, within this total capital outlay, the ‘modernisation budget’ also seems to have come down marginally by about Rs 318 crore when compared with the RE 2020-21. Service-wise distribution, on the other hand, reveals an increase of more than Rs 4,500 crore for the Indian Army, but obviously this has been at the cost of the other two services whose modernisation allocation is less than the RE for FY 2020-21.

Thirdly, the entire capital outlay is unavailable for new acquisitions as a large portion – 80 to 90% – of it is committed to payments for past procurements. More pertinently, barring some exceptions, fund allocation for specific projects and acquisition programmes are also not indicated in the budget documents, leaving everyone guessing about the funds available for new acquisitions.

The net result of all this confusion is that it is impossible to assess – even for insiders – what the MoD sets out to accomplish at the beginning of every financial year, and what it ends up achieving 12 months later. With the intention of addressing this concern, the MoF had restructured budget formats of several departments, including the MoD, in FY17 for ‘effective outcome-oriented monitoring of implementation of programmes and schemes and projects and to ensure optimum utilisation of resources’.

But this reform seems to have bypassed the defence budget which continues to approximate an entangled jalebi.

Amit Cowshish is former financial advisor (acquisitions), Ministry of Defence.

Activists Slam Reducing Budget Allocation for Critical Women and Child Nutrition Schemes Amid COVID

Allocation for children, who constitute 40% of the population, is the lowest in a decade; new schemes make comparisons difficult, and real term expenditure is down on most heads.

New Delhi: The right to food campaign activists on Wednesday slammed the Union Budget 2021 for cutting down allocations for critical nutrition schemes such as integrated child development services (ICDS), midday meals and maternity entitlements, despite there being “alarming evidence of extreme food insecurity” ever since the national lockdown due to COVID-19 pandemic began in March 2020.

Speaking at a press conference organised at the Indian Women’s Press Corps (IWPC) in New Delhi, the activists highlighted how the allocations have been reduced despite recent data suggesting that the impact of the lockdown was still lingering among the informal sector workers and their families.

On health and nutrition

Dipa Sinha of the campaign said that “children and child malnutrition have once again been neglected in this current budget that was presented on February 1. Despite this being a longstanding issue in the country, over many years we have seen that children under six, pregnant and lactating women and adolescent girls, who constitute the critical age group to address the issue of malnutrition, have been invisible and been neglected.”

She said, “There was some progress, particularly after 2005-06 and following the Supreme Court orders and with the ICDS getting universalised. The data between National Family Health Survey (NFHS) 3 and 4 shows a 10 percentage point decline in stunting. This is good, but too slow compared with the global standards. But, between NFHS 4 and 5, out of the list of 22 states and UTs, we see that in most there is either a stagnation or there has been a decline in cases of malnutrition.”

Giving out the NFHS findings on stunting, wasting and undernutrition, she added that in the last one year due to the pandemic, the lockdown and economic distress, the incomes in the informal sector have not come back. A number of primary studies show that this has resulted in increased hunger and food insecurity. Also, that did not last only up to to the lockdown in April-May, but it still continues.

Also read: Child Nutrition Levels in India Worsened Over Last Five Years, Finds NHFS Survey

The right to food campaign conducted a survey on food insecurity along with a number of other groups, between the period of October and December 2020.

Giving out the brief findings of this survey, Sinha said, this survey focused on poor and marginalised communities. They reported that their level of food consumption – cereals, rice, wheat and pulses – in October was even less than what they were consuming pre-lockdown. “So we know that there is a situation of hunger and food insecurity. We know that the gains that we were making on malnutrition have not been continuing. And because of this overall economic slowdown, we hoped that this budget would take some bold steps to address this problem of child malnutrition and contribute to reducing childhood hunger,” she said.

But, she added, it was very disappointing to see that the allocation has reduced for most of the schemes that address these problems.

In the beginning of her speech, the finance minister appeared positive because she announced a flagship programme ‘Poshan 2.0’ despite ‘Poshan 1.0’ being quite a failure. “So it seemed that some more money would be put into the schemes. But what it actually means is that while earlier there was an umbrella ICDS, now two new terms have been brought in – Saksham and Samarthya – and basically the schemes have been clubbed together.”

Also read: Does Mission Poshan 2.0 Have the Ammunition It Will Need to Be Successful?

So, Sinha said, it is not easy to compare the Anganwadi budget of last year to this year. “But what we can compare is the Anganwadi budget of last year with the Anganwadi plus Saksham budget of this year. However, even that has declined.”

Reduced allocation for essential nutrition schemes

The budget allocation for Anganwadi services last year was Rs 20,532 crore whereas the allocation for Saksham, which along with Anganwadi includes the National Nutrition Mission, is now Rs 20,105 crore. So, there has been an actual allocation of over Rs 400 crore less for a programme which now clubs three other schemes along with Anganwadi, Sinha added. A lot could have been done to improve supplementary nutrition if more money was given.

What is also alarming is that if you look at the data on the number of beneficiaries being covered under Anganwadi, then that too has also come down consistently in the last five years, she added.

Another scheme implemented by the Ministry of Women and Child Development is the Pradhan Mantri Matru Vandana Yojana (PMMVY). This was started after the National Food Security Act (NFSA) included an entitlement of at least Rs 6,000 for all pregnant and lactating women. Considered path-breaking, for the first time it provided universal maternal entitlement for supporting women during pregnancy and the six months of exclusive breast-feeding. This again has been clubbed with Samarthya, Sinha said.

A woman and her child wait to receive food during a 21-day nationwide lockdown to slow the spreading of COVID-19 in Kolkata, April 3, 2020. Photo: Reuters/Rupak De Chowdhuri

The allocation for PMMVY last year was Rs 2,500 crore but the allocation for the clubbed scheme this year is Rs 2,522 crore, she added. “So it would not be enough to cater to all the eligible beneficiaries. Also, while the Act says ‘all women’, the scheme only covers the ‘first birth’. And while the Act calls for providing Rs 6,000, the scheme only provides Rs 5,000.”

In the midday meal scheme, there is a nominal increase in the allocation from Rs 11,000 crore last year to Rs 11,500 crore this year, she further added. “But in real terms that is not enough to make up for inflation.” Here too the number of beneficiaries have declined over the years.

If we don’t put funds behind these programmes, there is no point in announcing new schemes every year.

Last year, hardly 50% of the allocation was spent because the Anganwadis and schools remained closed for most of the year due to COVID-19. So, this year, one expected an even bigger push, she further added.

Also read: India Ranks 94 Among 107 Countries in Global Hunger Index 2020

Nothing much for the informal sector, and other vulnerable groups

Jean Dreze, visiting professor at Ranchi University and food rights campaigner, said this year’s budget reflects the central government’s denial of the livelihood crisis that continues to devastate the informal sector in India. According to a survey by Azim Premji University, he said, informal sector workers today are still earning about half of what they were earning before the lockdown.

“For many of them the lockdown continues in one form or the other – the passenger trains are still not running, the schools and anganwadis are closed, jails are not accessible for visits, the district courts are functioning at half capacity. All kinds of services and facilities are still not functional and that affects huge sectors of the economy,” he added.

Informal sector workers rush to board a train in Thane. Photo: PTI

This situation called for bold measures that served the dual purpose of putting money in people’s hands and stimulating the economy. “But,” Dreze lamented, “few measures of that kind can be found in the budget.”

There was also a need to pay special attention to vulnerable groups such as children, pregnant women, the elderly and others. Children constitute 40% of the population, he said. The campaign pointed out that this year the share of children in the budget was the lowest in 10 years at 2.46% as against 4.76% in 2012-13.

The budgetary allocation for ICDS, maternity benefits, Pradhan Mantri Gramodaya Yojana (PMGY) and even school education has been cut. Likewise, the allocation for the National Social Assistance Programme, the lifeline for the elderly, has been copy-pasted from last year’s, he said.

Also read: This Year’s Budget Is Critical to Ensure a Comprehensive Nutrition Response

Massive budget cut for ICDS, again

Also, Dreze pointed out that this is the second time after 2015-16 that the ICDS budgetary allocation has been cut. “That was the first full budget of the NDA government and there were massive cuts. Also, they were only partially reversed.” In real terms, he said, the ICDS budget was 25% lower than 2014 despite the population growth, and for midday meals, it is lower in real terms by 33%.

“In 2014, the ICDS budget was around Rs 16,000 crore. At today’s prices that corresponds to nearly Rs 23,000 crore. The Saksham budget, which includes ICDS, is around Rs 20,000 crore only out of which ICDS will get around Rs 17,000 crore.”

Likewise, he said, for the midday meal scheme, in 2014 the budget was around Rs 12,000 crore and now it is Rs 11,500 crore. As such it is less than what it was seven years ago while in real terms as per that rate it should have been at least Rs 17,000 crore.

So there is a big attack on these programmes and that has resulted in lower coverage of ICDS services, which have been declining year after year, Dreze said.

He added that the campaign, along with others, can take some credit that India finally has some semblance of a social security system for the informal sector, consisting of six pillars: public distribution system, MGNREGS employment guarantee scheme, pension schemes, maternity entitlements, ICDS and midday meals.

Barring NREGA and PDS, the other four have been severely hit by the cuts in budgetary allocations, he said.

Midday meal scheme in Rajasthan. Credit: Reuters

Schemes such as the midday meal, if implemented properly, can help tackle child malnourishment . Credit: Reuters

‘Blatant disregard for malnutrition, children’

Community pediatrician Dr Vandana Prasad, who is also associated with the campaign and Jan Swasthya Abhiyan, said it was shocking that the budget was so blatant in its disregard for malnutrition and children. She said UNICEF and WHO have been predicting rise in child mortality in India and across the globe, and yet the response to data showing deterioration due to the pandemic has been met with cuts and deduction in budgetary allocation. “What does it say about the intent of the government?”

Focussing on ICDS, she said, “It is not sufficiently understood that the Anganwadi system is the only village-level platform for all schemes, programmes and interventions for women and child health and nutrition. It provides last mile connectivity to whatever you may plan.”

She said there are 1.4 million anganwadis across the country and those are still not fully universalised. “There is only about 50-60% coverage for children. While the delivery of the scheme rests on the workers,” she asked, “what has been done for them.”

“They are still not treated as workers despite their working on pandemic programmes, COVID programmes and even election programmes. They have not received any paisa in this budget whereas Rs 3 lakh crore extra have been earmarked for other government functionaries.”

Watch | Has Budget 2021 Fulfilled Citizens’ Expectations?

The Wire spoke to the citizens of New Delhi to get their opinion on the budget.

Finance minister Nirmala Sitharaman on February 1 presented the Union Budget of 2021-22 in parliament.

The Wire spoke to the citizens of New Delhi to get their opinion on the budget. As a result, we received mixed opinions. While some people were seen to be highly disappointed with this budget, some welcomed it, and many did not even know about the budget.

 

Watch | Union Budget 2021 Review: The Hits and Misses

While economists hailed greater transparency in the numbers, it was surprising to see budgets slashed for several important welfare schemes, says Mitali Mukherjee.

It was a mixed bag from the Union Budget. While economists hailed greater transparency in the numbers, with finance minister Nirmala Sitharaman indicating a fiscal deficit figure of 9.5% for FY20 and 6.8% for FY21, it was surprising to see budgets slashed for several important welfare schemes, including MNREGA. Here’s a look at the key highlights with The Wire‘s Mitali Mukherjee.

In Six Charts, a Visual Primer on India’s Budget for Diplomacy

This year is seeing the highest ever allocation for the Ministry of External Affairs.

New Delhi: India’s foreign office has received an increase in budgetary allocation for FY’22, a funding boost that comes even as the ministry gears up to carry out multiple diplomatic challenges from vaccine diplomacy to finishing key infrastructure projects abroad.

The Union Budget has allocated Rs 18,154.73 crore to the Ministry of External Affairs for 2021-22. This is the highest ever allocation for the MEA – and an increase of 4.65% from this year’s budget estimates.

At the same time, budget documents also showed that there had been a sharp drop of 13% in the expenditure for this year – from budget estimates (BE) of Rs 1,7346.71 crore to Rs 15,000 crore in revised estimates (RE).

MEA’s decrease in expenditure for this year goes against the overall trend of the Indian government that revised its overall spending for FY21.

That’s because a large part of foreign ministry’s budget – around 40% – is tied up with development assistance projects in countries with whom India has a strategic relationship.

As an MEA official explained, the global lockdown due to the COVID-19 pandemic resulted in a shortfall of most of the infrastructure-related activities so the expenditure of ministries related to those sectors should be lower.

With the external affairs ministry’s aid allocation linked to major infrastructure projects, spending would, therefore, be much less as it would depend on the rate of progress.

While the MEA may have a record budget allocation for next year, it is still far from breaching the 1% mark in the Indian government’s total expenditure. This year, the foreign ministry’s share was the lowest in over a decade at 0.49%. This will increase slightly to 0.52% for 2021-22.

Within the Indian government, the MEA is not the only source for disbursing foreign aid. The Ministry of Finance’s department of economic affairs is a major player as it controls the lines of credit that India extends to foreign countries, which are an oft-used diplomatic instrument to increase economic and strategic visibility for Indian companies in key countries.

India has allocated Rs 9,724.7 crore for loans and grants to foreign government in FY22, which sums up all dispersals through North and South Blocks. This allocation is an increase of around 16% from the current year’s budget estimates.

The Union Budget also increased the revised expenditure within this category to Rs 8,457.64 crore for FY 21. However, this rise is solely due to the tripling in allocation for Exim Bank, which is apportioned money through the finance ministry.

As per the norm, Bhutan has been allocated the lion’s share of the foreign aid budget to sponsor the mega hydropower projects, which are a significant source of revenue for the Himalayan kingdom.

As the chart above shows, the increase in next year’s allocation follows a decline in actual expenditure on foreign aid projects over a couple of years.

The share of South Asia in India’s foreign aid budget had seen a decline in previous years, with New Delhi also allotting money for strategic projects like Chabahar port in Iran and to Indian Ocean nations of Mauritius and Seychelles.

It was supposed to pick up to 57% this year. But the revised estimates show that the six South Asian countries account for 45.7% of India’s total loans and grants for foreign governments in FY21. This is a dip from the region’s share of 57.1% in the actual expenditure of 2019-20. Next year, the South Asian stake may rise to 51.3%, according to FY22 budget estimates.

How Budget 2021 Was or (Was Not) Business as Usual

This was the ninth budget under the Modi administration and the third budget presented by Sitharaman.

New Delhi: Finance minister Nirmala Sitharaman’s Budget 2021-22 speech started, as usual, with praising what the Modi administration has done for tackling COVID-19 in India amid ‘jai jawan jai kisan’ slogans by the Opposition, referring to the over two-month long farmers’ protest. Replacing the standard budget briefcase with the traditional red “Bahi-Khata” or cloth ledger in 2019, the finance minister this year stayed with it, albeit with a Made in India tab.

In fact, the choice of words in her budget speech, which mostly excluded terms like economic slowdown and unemployment, were similar to last year’s budget.

The only difference we could notice was that there were less number of people present and most of them were wearing masks. Also, this was the first time the budget went digital. However, in terms of announcements, it was comparatively less complicated and seemed like “business as usual”.

This was the ninth budget under the Modi administration and the third budget presented by Sitharaman. The Budget 2021-22 was divided into six pillars or categories: health and well-being, physical and financial capital, inclusive development, human capital, innovation and research and development, and minimum government and maximum governance.

“…we have spent, we have spent and we have spent,” said finance minister Sitharaman, after her budget announcements. With the sharpest GDP contraction in decades, a 45-year high unemployment rate, tumbling consumer confidence, and lack of easy credit, we are yet to see how this was a “never like before” budget.

The BSE benchmark Sensex zoomed over 1,700 points and the NSE Nifty reclaimed the 14,000-level driven by gains in financial stocks after Sitharaman’s budget announcements. The benchmark index gained 2314.84 points or 5% to close at 48,600.61 on Monday.

The government projected nominal GDP for FY22 at 14.4%. The Reserve Bank of India (RBI) had in December made a revision in the GDP contraction for the year ending March 21 to 7.5% from 9.5%.

Heath budget

Unlike previous budgets where health allocation was not a priority, this year the total budget outlay for schemes and measures related to health stands at Rs 223,846 crore – a 137% increase from last year’s budget estimate of Rs 94,452 crore. Of which, total outlay under health is Rs 73,931.77 crore.

During such unprecedented times of a pandemic, many were expecting to see stringent measures to revive the economy, especially in the budget for the health sector. Around 15% of the total allocation under the health sector has being given to COVID-19 vaccines, which is fairly inadequate.

Apart from this, nearly Rs 64,000 crore have been allocated for over six years under the PM Atmanirbhar Swasth Bharat Yojana, and Rs 2,217 crore for air pollution among others. According to The Lancet, the national GDP suffered a loss of 1.36% because of air pollution in 2019 – with Delhi bearing the highest per-capita economic loss due to premature deaths and illnesses caused by it, said news reports. Therefore, just over Rs 2,000 crore to tackle air pollution seems way too less for an issue as important as this.

On the bright side, some experts have hailed the mention of a vehicle scrappage policy in the budget, and said that the government has finally listened to them. However, details on the policy are yet to be out.

The government will merge the supplementary nutrition programme and the Poshan Abhiyan and launch the ‘Mission Poshan 2.0’ – an important step amid India’s poor raking in the global hunger index.

The finance minister announced the launch of the ‘Jal Jeevan Mission (Urban)’ that aims to provide water supply to as many as 4,378 urban local bodies with 2.86 crore household tap connections, as well as liquid waste management in 500 AMRUT cities. It will be implemented over five years, with an outlay of Rs 287,000 crore.

Financial and infra capital

To tackle the issue of long-term infrastructure financing, the finance minister introduced a Bill to set up a development financial institution (DFI), with a corpus of Rs 20,000 crore to capitalise this institution. The new DFI will have a target of a lending portfolio of at least Rs 5 lakh crore over three years.

Experts had pointed out the the need to ensure that the new DFI is soundly managed and delivers real public value, since it has a history of negative (and positive) experiences in this country.

Arun Jaitley’s budgets had always given a push to the infrastructure sector, with a focus on public investment.

Also read: Can a New DFI Fill the Vacuum of Long-Term Infra Financing and Revive the Indian Economy?

In this budget, the government has committed nearly Rs 1.97 lakh crore for production-linked incentives (PLI), starting fiscal year 2021-22, aimed at boosting domestic manufacturing. The PLI scheme provides incentives to large scale manufacturers, ranging from 4-6% of production value for five years, after they achieve their investment and production value target for each year.

The finance minister announced a 34.5% increase in capital expenditure to Rs 5.54 lakh crore in this budget, compared with Rs 4.49 lakh crore budget estimate of 2020-21.

“We will also work out specific mechanisms to nudge states to spend more of their budget on creation of infrastructure,” said Sitharaman. This area needs to be looked at as state government finances have always been constrained, and in this fiscal even more due to COVID-19.

Governments have always prioritized recapitalisation into public sector banks, however, the amount, as per experts, have never been sufficient to handle the non-performing assets (NPA) mess. This year too, the government has announced a further recapitalisation of Rs 20,000 crore in FY22. Additionally, India plans to privatise two public sector banks and a general insurance company in the next fiscal year.

Sitharaman also announced highway and road projects in poll-bound states, including West Bengal, Tamil Nadu, Kerala and Assam.

Boosting growth of small companies and startups

Just like last year, this budget also focused on reducing the working capital stress of small companies and boosting the growth of startups. The government has revised the definition for small companies under the Company’s Act, 2013, by increasing threshold from paid up capital to not exceeding 50 lakh to not exceeding Rs 2 crore, and turnover from not exceeding Rs 2 crore to not exceeding Rs 20 crore.

The government also allowed NRIs to set up ‘one person companies’ without any restrictions on paid up capital and turnover, allowing their conversion into any other type of company at any time.

Addressing toxic asset woes, the government announced setting up of an Asset Reconstruction Company (ARC) that would take over the existing stressed debt, and then manage and dispose of the assets to Alternate Investment Funds (AIFs) and other potential investors for eventual value realisation. Put simply, a ‘bad bank’ can help clean the balanced sheets of banks. “ARC will be set up to manage bad debt – basically bad bank will now become a reality. It will go a long way in resolving stressed assets in India,” Siddharth Srivastava, Khaitan & Co told the Economic Times.

Also read: It’s Budget Season. and That Means Talk of a ‘Bad Bank’ Yet Again.

Taxes

Relieving as we may call it, there were no changes in the tax system this year.

Other measures announced by the finance minister include: additional deduction for Rs 1.5 lakh crore for loans taken under affordable housing has been extended till 31 march 2022; senior citizens above 75 years of age with only pension income will now be exempted from filing tax returns; and a national income tax appellate tribunal centre to be set up.

With an aim to boost domestic manufacturing, the government has raised custom duty on some automobile parts to 15% with effect from February 2. According to reports, currently, the parts attract customs duty in the range of 7.5-10%. The increase in duty on auto parts may impact the end prices of vehicles. Added to that, earlier news reports have pointed out quality issues of auto components, due to financially and technologically weak vendors.

In 2018, Jaitley’s budget had also hiked customs duty on automobile parts, which was seen as a protective measure and faced backlash from countries like Germany.

A BloombergQuint report had cited a study which said that auto component makers have witnessed a double-digit contraction due to the pandemic and may take three-four year to grow. Therefore, after the budget announcements, Deepak Jain, president of Automotive Components Manufacturers Association, has hailed this step as encouraging and told PTI that he believes this will this will provide the MSME sector, which is largely dominated by auto parts manufacturers, the necessary succor as the industry recovers.

However, with a lack of spending in many essential sectors including education and COVID-related measures, this budget seemed like the movie Groundhog Day. Will it help in reviving the pandemic-stricken economy? Time will tell

Budget ’21: Fiscal Stimulus Was Already Weak. How Can Its Premature Withdrawal Aid Economic Recovery?

It is obvious that the government is relying on a private sector-led recovery. Sadly, such expectations have never materialised in the past, neither in India nor abroad.

The Union budget presented today should raise serious doubts over whether the recession-struck Indian economy would be able to achieve sharp economic recovery, as projected by the Economic Survey.

The finance minister, in her speech, mentioned that the “total financial impact of all Atma Nirbhar Bharat packages including measures taken by RBI was estimated to about Rs. 27.1 trillion which amounts to more than 13% of GDP.” However, since the RBI measures amount to liquidity infusion, they do not directly contribute to fiscal expenditure and/or expansion of economic activity and output.

The revenue and expenditure data provided in the budget documents shows that while gross tax revenues in the current financial year, 2020-21, are going to be around Rs 19 trillion only, against the projected revenues of Rs. 24 trillion and the actual gross tax revenue of Rs. 20.1 trillion collected in 2019-20. Despise increasing excise duty collection by Rs 1.2 trillion from last year through higher duties on petrol and diesel, gross tax revenues are being driven down by lower corporate tax collections and GST revenues, down by over Rs. 1 trillion and Rs. 83000 crore respectively from last year, alongside lower income tax collections.

Total government expenditure in 2020-21, projected at Rs 30.4 trillion last year, is now expected to cross Rs 34.5 trillion. This reflects the additional expenditure incurred by the government through the Atmanirbhar Bharat package. The expenditure profile (Statement 2A) elaborates that over Rs 3 trillion out of the additional Rs 4 trillion being spent is on account of food subsidy, Rs 62638 crore on fertiliser subsidy, Rs 50000 crore on rural employment, Rs 38398 crore on Railways, Rs 4122 crore on medical and public health expenses etc. Besides there is a cutback of over Rs 1 trillion on establishment expenditure, interest payments and lower capital outlays on police, HEFA, urban development, atomic energy etc.

Also read: Understanding the Anatomy of India’s High Fiscal Deficit

As a result of enhanced expenditures and lower revenue mobilisation, the fiscal deficit is expected to increase from Rs 9.33 trillion, i.e. 4.6% of GDP in 2019-20 to Rs 18.48 trillion or 9.5% of GDP in 2020-21. The fiscal stimulus, estimated as the expansion of the fiscal deficit from last year, is therefore to the tune of Rs 9.15 trillion or 4.9% of GDP in 2020-21. In nominal terms, this is around one-third of what is being claimed by the government, which is adding the fiscal measures with liquidity infusion in a misleading manner.

People watch finance minister Nirmala Sitharaman presenting Union Budget 2021-21 on television sets, at an electronics store in Allahabad, Monday, Feb. 01, 2021. Photo: PTI

The government expects economic growth, which has plunged to -7.7% on 2020-21 by official estimates; the lowest in five decades; to recover in 2021-22 to 10-12% in real terms and 14.4% in nominal terms. Further, the government expects this economic recovery despite a sharp rollback of the fiscal stimulus in 2021-22.

Gross tax revenues have been projected to increase by Rs 3 trillion in 2021-22, with corporate taxes, income taxes and GST collections expected to increase by Rs 1 trillion each. There is a minor projected increase in customs duty collection and a minor decline in excise duty revenues. Since there have not been any major changes in the direct and indirect tax rates, it is obvious that the government is banking on the economic recovery to shore up direct and indirect tax revenues.

However, total government expenditure is projected to increase by Rs 32931 crore only, from Rs 34.5 trillion in 2020-21 to Rs 34.8 trillion in 2021-22. While the finance minister has showcased the Rs 1 trillion plus increase in capital expenditure in 2021-22 in her budget speech, she has concealed a substantive Rs 82,000 crore cut in revenue expenditures. The expenditure profile (Statement 2B) shows a Rs 3.75 trillion cut in “Other Expenditures” in 2021-22, which must be on account of the rationalisation of the centrally sponsored schemes as suggested by the Fifteenth Finance Commission.

Also read: Snapshot: Budget 2021 and Key Sector Allocation in Six Charts

In real terms, this will ultimately lead to an over 2% of GDP cut in total government expenditure in 2021-22. The most significant cuts will be on food and fertiliser subsidies and allocations on MGNREGA and NSAP. With such cutbacks on government expenditure, especially on entitlements for the poorer section of the population, not only will the fate of the economic recovery remain highly uncertain but will also enhance inequalities of income and consumption.

It is obvious that the government is relying on a private sector led economic recovery in 2021-22. It expects the announcements of wholesale privatisation of the PSUs, including public sector banks and insurance companies, enhancement of FDI cap in the insurance sector etc. — coming after the earlier changes in the labour and farm laws — to unleash the animal spirits of the foreign and domestic corporate sector. Sadly, such expectations have never materialised in the past, neither in India nor abroad. Rather, such announcements only feed equity market bubbles, such as the one we are witnessing in India now. Speculative bubbles do more harm than good for the real economy.

Prasenjit Bose is an economist and political activist.

Budget 2021 Appears to Be a Return to Business as Usual

Given the near complete failure of the ambitious Rs 2.1 lakh crore crore disinvestment plan in FY’21 budget, the reliance on this may not deliver the expected resources for the infra push.

Budget presentations have turned tiresome for some years now, and for many reasons.

Their length, which tends to be way beyond that warranted by substance. The tendency to drone on about off-budget policy initiatives in Part A, most of which tends to be mere hype, while the actual budget in Part B is given cursory attention. The absence of adequate allocations to back budgetary proposals to expand existing schemes or introduce new ones. And, finally, window dressing to claim receipts to finance even limited expenditure increases without upsetting the government’s wholly imaginary fiscal deficit trajectory.

Though finance minister Nirmala Sitharaman claimed that Budget 2021 would be one “like never before” given that it is being presented in the midst of a pandemic, it sounded like more of the same.

So before letting the hype divert us, it may be useful to underline the Budget’s essential features. First, both the revised estimates for fiscal year 2020-21 and the budget estimates for 2021-22 do not imply any significant increase in spending. In 2020-21, when the pandemic was at its peak and called for enhanced health expenditure, emergency transfers to those devastated by the contagion and lockdown, and a proactive fiscal policy to accelerate the recovery, total expenditure increased by just 13.4%.

In preceding 2019-20, a normal year, total central expenditure rose by 16%. This evidence contrasts with the Finance Minister’s claim that the government has substantially hiked spending in response to the crisis, through a series of mini-budgets she had announced over the year. There is no evidence of such a proactive tilt in fiscal policy post the pandemic. And Budget 2021-22 is in keeping with this fiscal conservatism, with total expenditure projected to rise by just 0.95% relative to the revised 2020-21 estimate in a year when GDP is projected to rise by 14.4%.

Also read: Explained: The Fine Print of the Centre’s Claims on Health Budget

Underlying this fiscal conservatism is evidence of a serious erosion of the revenue base of the central government. The Budget for 2020-21, presented before the seriousness of the pandemic had been recognised, projected revenue receipts of the Centre to rise from Rs 16.8 lakh crore in 2019-20 to Rs 20.2 lakh crore. The pandemic and the economic contraction that followed were not the only reasons this could not be achieved. It was also because in September 2019, the Centre had in response to the pre-COVID slump slashed corporate tax rates, eroding a part of its revenue base. Revised estimates for 2020-21 place central revenues at Rs 15.6 lakh crore, or just three quarters of what was projected. Combine that with even the weak stimulus provided by the spending increase in 2020-21 and the fiscal deficit was bound to be high and is estimated at 9.5%.

The problem  was not that the government was forced to spend heavily – it did not. The problem was that revenues fell sharply. Perhaps if the government was willing to stretch its spending, better performance in the second half of the year may have improved revenue receipts and kept the deficit in the same range. In the year ahead, the problem of low revenue mobilisation is expected to persist. Revenue receipts for 2021-22 are projected at Rs 17.9 lakh crore, which is still well below the budget estimate for 2020-21. Given that, and the decision to reduce the fiscal deficit to 6.8% of GDP in 2021-22, allocations for crucial sectors are bound to fall.

Consider for example the Mahatma Gandhi National Rural Employment Guarantee programme (MGNREG). Expenditure in 2020-21 has been placed at Rs 11,1500 crore (RE) as compared with a budgeted Rs 61,500 crore and an actual expenditure of Rs 71,687 crore in 2019-20. Workers deprived of their livelihoods, including return migrants to rural areas, had turned to the MGNREGS, resulting in the spike in allocations for the demand-driven scheme. It can hardly be claimed that the system has returned to normalcy. Yet, the budgetary allocation for the MGNREGP for 2021-22 has been placed at just Rs 73,000 crore.

A similar picture is visible in the case of food subsidies, which according to the revised estimates in 2020-21 had risen to a high of Rs 4,22,618 crore, as compared with the budget estimate of Rs 1,15,570 crore and an actual outlay of Rs 1,08,688 crore in 2019-20. The decision to provide even 5 kg of grain free of cost to those covered under the NFSA implied a huge increase in spending under this head. It can hardly be said that the need for a strong safety net involving free or low cost distribution of food will not be felt in the coming year when the recovery will leave many untouched. Yet the allocation for food subsidy for 2021-22 is budgeted at a little more than half of what was spent in 2020-21. A part of this money is also likely to be used to clear arrears due to the Food Corporation of India and other agencies.

Thus, while the government had no choice but to provide support, however limited, for many, even not all, who had been devastated by the pandemic and the lockdown, it is using the first opportunity to retreat. To compensate for that and back the hype that this is a budget “like never before”, the finance minister has relied mainly on two narratives. The first is that the budget, taking lessons from the experience with the pandemic, is launching a major initiative in the “health and wellbeing” area. The numbers cited are striking. Allocations in Budget 2021-22 for this sector, it is declared, aggregate Rs 2,23,846 crore, which reflects a 137% increase relative to the BE of Rs 94,452 crore provided in the previous budget.

Also read: Here’s How the Budget 2021 Treated India’s Most Vulnerable in Terms of Spending

But these figures on outlays have been arrived at using a broad definition of “health and well being”, leaving core health spending at their earlier levels. The most significant, and in the circumstances unavoidable component is a Rs 35,000 crore allocation for the COVID-19 vaccination drive. But the rest of the numbers are not convincing. The 137% increase in the “health and well-being” budget, does not show up in actual allocations for the Department of Health and Family Welfare (DOHFW), which should be at the core of any health initiative. Only about Rs 71,000 core of the 2021-22 health and well being allocation is the regular budget of the DOHFW. This figure does not point to any emphasis on improving health interventions post the COVID-19 experience.

Before the seriousness of the pandemic had been recognised, Budget 2020 provided for around Rs 65,000 crore for the Department of Health. Compared to that figure, the budget estimate for 2021 points to a not-too-spectacular 9.6% increase. What is more, the revised estimate of expenditure of the DOHFW in 2020-21 stood at Rs 78,866 crore, relative to which the BE for 2021-22 reflects a 9.6%  decrease.

Moreover, the finance minister’s “health and well-being” allocation for 2021-22 also includes the Finance Commission’s mandated grants to the states for water and sanitation and health of Rs 49,214 crore, which cannot be considered discretionary and enhanced expenditures on the part of the Centre. The minister has also added on planned increases in expenditure on the Jal Jeevan Mission that seeks to provide safe and adequate drinking water through individual household tap connections in rural and urban areas.

While safe drinking water provision does help ensure good health and well being, it cannot be counted among core expenditures on health. It is this component of the health and well being budget that registers a sharp spike from Rs 10,905.50 crore in the revised estimate for 2020-21 to Rs 49,757.75 crore in the budget estimate for 2021-22, or by more than 450%. All of this expenditure is to be financed with a transfer from the Central Road and Infrastructure Fund. Originally named the Central Road Fund, this was a corpus meant for investment in road and highway expansion and was to be meant to be financed with special cesses levied for the purpose. The Fund therefore functioned under and was managed by the Ministry of Road Transport and Highways.

Also read: Budget 2021: The Winners, Losers and the Largely Unaffected

However, as the government grew inclined to financing road and highways investments either with borrowing or by attracting private capital, the resources available with this cess-financed fund was sought to be diverted. The Central Road Fund Act, 2000 was amended in Budget 2018, and the Fund was renamed as the Central Road and Infrastructure Fund and brought under the Department of Economic Affairs in the Ministry of Finance. The facility was now meant to fund all kinds of infrastructural projects. So, in Budget 2021-22, funds are merely being diverted away from roads and highways financing to finance the Jal Jeevan Mission and this huge programme is being used to present a picture of the aggressive pursuit of a health and well-being mission.

Infra push

This diversion of funds does create a problem for the second plank of the Finance Minister’s budget for the post-COVID world, which is the launch of one more infrastructural thrust.

The renewed infrastructure thrust is therefore to be financed in three ways: disinvestment of public sector equity; monetisation or sale of public assets; and private capital attracted with a variety of sops. With receipts from disinvestment budgeted at Rs 1,75,000 crore in 2021-22, some of the best public sector firms and financial institutions are to put up for sale. There are three elements here: disinvestment of equity, strategic sale, and privatisation of the public financial sector. The finance minister referred to the disinvestment of GIC and the IPO to be launched by LIC.

To move such as these is to add an effort to “monetise assets”, especially land, with public sector agencies and rely on that rather than resources from taxation to finance capital expenditure. But given the near complete failure of the ambitious Rs. 2,10,000 crore disinvestment plan in the budget for 2020-21, this may not deliver the expected resources.

In sum there is no shift here. The neoliberal agenda continues with lower taxation, lower borrowing and efforts at asset sales to finance limited expenditures. It has not worked in the past, and possibly will not in the future. The pandemic may have made some limited fiscal difference in 2021-22. But Budget 2021 seems like a return to business as usual in 2021-22.

C.P. Chandrasekhar is a former professor of economics at Jawaharlal Nehru University, New Delhi.

Can Budget 2021 Ensure a Faster Return to a Sustainable Growth Path?

The government is hoping its big spend on infrastructure – physical and social – will create new incomes and lead to more spending

The Narendra Modi government is betting on the recovery of a pandemic-hit economy, which was already in a downward spiral since 2018-19.

It’s doing this through a mix of heavy market borrowings and raising resources via wholesale privatisation of PSUs and sale of public assets such as roads, airports, surplus public land etc. to fund infrastructure in the hope that new investments would bring growth and employment back on track.

The stock markets have welcomed the gamble on heavy borrowings plus sale of public assets, but execution will remain a big challenge as the government has so far not been able to attract buyers globally for many of its profitable PSUs at prices it would like. PSU and government bank stock prices have fallen to new lows in the last six years, and the bureaucracy has been struggling to find buyers for these assets at prices they truly deserve. Many of these assets were listed for sale last year, but the government fell woefully short of target.

Politically, Prime Minister Narendra Modi has given the spin that selling good public assets, including divestment of LIC and a few banks, is part of the government’s Atmanirbharta vision. In reality, selling these assets cheap will be the opposite of Atmanirbharta. This will be the biggest challenge for the government in the year ahead because the entire recovery of the economy is premised on massive sale of public assets, besides much higher borrowing at 6.8% of GDP in FY22. The fiscal deficit in FY21 is pegged at 9.5%, the highest seen in the decades after the 1991 reforms. The Centre and states’ borrowing combine could be about 14% of GDP. The government is hoping the global credit rating agencies will show patience in the backdrop of the post-pandemic economic consensus that such fiscal push is necessary.

There is no tax relief for the salaried middle class, which will continue to pay 30% to 35% tax plus cess when the corporate sector pays 25%. Seen along with the big tax cut for the corporate sector in late 2019, this Budget is the most business friendly one in decades. The corporate sector balance sheets have greatly benefited after the pandemic through a combination of lower taxes and cheaper money which has reduced their interest costs considerably. Many of them are already showing higher profits. But better balance sheets are not accompanied by more hiring and better employment prospects. On the contrary, corporates are shedding jobs or not rehiring workers who have left during the lockdown. No wonder the stock markets, concerned largely with company balance sheets, received the budget with gusto.

However, the household balance sheets have been smashed badly since the pandemic and indeed they were weakening for years before that, with household savings rate declining by 5 percentage points of GDP over the last eight years. The key question economists are asking is how will aggregate demand improve in the next two years if households don’t spend. They have to first recover their lost savings and only then will they begin to spend.

The government is hoping its big spend on infrastructure – physical and social – will create new incomes and lead to more spending. The benefits of the big increase (34%) in capital expenditure will probably kick in over 4-5 years if execution is efficient. The political economy related tensions between the Centre and states must also ease for these projects to take off. The growing trust deficit today between the Centre and states make smooth execution of projects difficult.

Overall, structural decline caused in India’s economy since demonetisation and the multi-decade high unemployment ratio cannot be reversed so quickly. CMIE data shows India is experiencing a substantial increase in employable workers opting out of the labour force. Labour participation ratio – which is the percentage of people looking for jobs in the total employable work force of about one billion – is now down to 44%, whereas this ratio ranges from 60% to 66% in other comparable developing economies in East Asia.

These are the structural problems which need to be overcome in the next few years. One is not sure how employment growth will pick up when the IMF says India may take about three years to return to the pre-COVID levels of output. Can this Budget ensure a faster return to a sustainable growth path, is a question which is difficult to answer at this stage.

There are too many variables at play, not least the daily dose of divisive politics this regime unleashes. After all, don’t forget many leading economists have spoken about how divisive social policy is not conducive to stable economic growth.

Why 137% Increase in Budget Outlay for ‘Health and Wellbeing’ Is Misleading

This figure is the result of clubbing the allocations for the Ministry of AYUSH, drinking water and sanitation and nutrition under the ‘health’ head.

Jaipur: Union finance minister Nirmala Sitharaman claimed in the Union budget for 2021-2022 that the allocation for the ‘health and wellbeing’ increased from a budget estimate of Rs 94,452 crore last year to Rs 2,23,846 crore this time – a stunning 137%.

However, a closer look reveals that this figure is the result of clubbing the allocations for the Ministry of AYUSH, drinking water and sanitation and nutrition all under the head of ‘health’.

Sitharaman called this a “holistic approach” towards health that focuses “on strengthening three areas: preventive, curative, and wellbeing” – in her speech in parliament on February 1, 2021.

The budget also records a new Centre-funded scheme called Pradhan Mantri Atmanirbhar Swasth Bharat Yojana, in addition to the National Health Mission, with an outlay of about Rs 64,180 crore over six years.

Union health minister Harsh Vardhan had mentioned this scheme in September 2020. It is aimed at developing capacity at the primary, secondary and tertiary healthcare levels, strengthening existing institutions and creating new ones, specifically to detect and cure emerging diseases.

The budget estimate of Rs 94,452 crore for last year was divided between the Department Health and Family Welfare (Rs 65,012 crore), of Health Research (Rs 2,100 crore), the Ministry of AYUSH (Rs 2,122 crore), drinking water and sanitation (Rs 21,518 crore) and nutrition (Rs 3,700 crore).

The budget estimate this year includes the Department of Health and Family Welfare (Rs 71,269 crore), of Health Research (Rs 2,663 crore), Ministry of AYUSH (Rs 2,970 crore), drinking water and sanitation (Rs 60,030 crore) and nutrition (Rs 2,700 crore).

Apart from this, Sitharaman also said the government would set aside Rs 35,000 crore for the COVID-19 vaccination drive, plus grants for water and sanitation (Rs 36,022 crore) and health (Rs 13,192 crore).

Also read: Despite Govt Claims, India’s Health Budget Only Around 0.34% of GDP

So far from strengthening nutrition outcomes, the budget has cut allocation by 27% – i.e. from last year’s allocation of Rs 3,700 crore for nutrition to this year’s Rs 2,700 crore.

In addition, the government has announced that it intends to merge various nutrition programmes under a ‘Mission Poshan 2.0’, with a limited budget.

The health budget also includes the ‘Jal Jeevan Mission’ (urban), to achieve universal water supply in 4,378 urban local bodies with 2.86 crore household tap connections. This is set to be implemented over five years, with an allocation of Rs 2.87 lakh crore.

Finally, the health budget also took air pollution and waste management into its ambit. Sitharaman announced the launch of an “Urban Swachh Bharat Mission 2.0” for urban areas and focusing on waste management in cities. For this, the government has set aside Rs 1.41 lakh crore to be spent over five years.

In addition, the government has allocated Rs 2,217 crore for 42 urban centres to improve air quality.