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LATEST NEWS UPDATES | Two Key Numbers to Look Out for in the Upcoming Budget 2021 -Jayati Ghosh

Two Key Numbers to Look Out for in the Upcoming Budget 2021 -Jayati Ghosh

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published Published on Jan 24, 2021   modified Modified on Jan 25, 2021

-TheWire.in

The most important concern is that of increasing public spending.

There are really only two numbers to look out for in the forthcoming budget: how much did the government claim to have spent in 2020-21, and how much does it intend to spend in 2021-22.

These two numbers will determine whether there is any real hope of sustained macroeconomic recovery in the near future, notwithstanding any claims of green shoots or revival that the finance minister may point to.

As it is, the Indian government’s response to COVID-19 has been, in purely economic terms, one of the worst in the world.  Not only did it impose a national lockdown without notice or consultation, at a time when it was not needed, it then proceeded to “unlock” as cases mounted and infections spread more rapidly, thereby putting more people at risk.

It deprived hundreds of millions of people of their livelihoods at one stroke and then provided next to nothing in terms of compensation or social protection. This is both astounding and inexcusable in a country where around 95% of all workers are informal, and around half of those are self-employed, and where the loss of income beyond even a week can lead to absolute starvation for millions who were already at the margin of subsistence.

The government even hoarded—and increased the volume—of food grain surpluses lying with the Food Corporation of India at a time when absolute hunger among the people increased massively. The extension of some free food grain (only 5 kg per month) to those holding ration cards was discontinued after November 2020, even as food stocks remain at more than double the buffer stock requirement and even cost the FCI money to store. Nothing was done for the more than 100 million deserving people estimated to be outside the ration system for no fault of their own. The denial of basic food items to hundreds of millions of people is more than a human tragedy: it will reflect in maternal, infant and child undernutrition with terrible consequences for the future.

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TheWire.in, 24 January, 2021, https://thewire.in/economy/union-budget-2021-public-spending-economic-recovery


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