Rework the Budget (The Union Budget 2020-21 has become meaningless)

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 Rework the Budget (The Union Budget 2020-21 has become meaningless)

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• Ground situation changed: The facts of Indian economy have changed so fast, that it's best to change the mind too. The fiscal response to COVID-19 crisis is being tried within the framework of Budget 2020-21 already presented, but is that the right approach?
• New stimulus packages: Many countries have created new packages, throwing the old budgets in the dustbins. The Indian govt's estimates (Feb 1, 2020) are useless now. All priorities of Union govt. need to be redrawn urgently.
• Three things: The major changes are likely to be -

1. GDP and taxes - The GDP growth from Q4 of FY 2019-20 will be much lower, and Q1 of FY 21 will be worse. So, the tax revenue growth expected aren't likely any more (Q4 of FY 20, and entire FY 21) - expected growth was 9% in taxes and 11% in non-tax revenues. The total washout of most businesses till July-Aug means support is needed, not tax collections.
2. Outlays must change - The Budget outlays on defence, administrative costs and pet schemes must change now. The lakhs of displaced migrant workers need urgent support (cash) to stay alive. The PM Garib Kalyan Yojana doesn't cater to them – it gives more rations, credit to women JDY accounts, higher MGNREGA wages, EPF withdrawals – but these don't apply to informal sector. And it's just 0.8% of GDP. Too little.
3. Hospitalisation needs - There are some dire predictions about the spread of COVID-19 in India, so more support for medical needs required urgently. The Ayushman Bharat has suddenly become irrelevant for battling COVID-19. We need actual hospitals, not just insurance schemes.

• Summary: Forget the fiscal deficit targets. Go all out and spend before it is too late. Get a new budget. Allow the states to cross the FRBM red lines.
• The Union Budget 2020-21 suddenly became meaningless, in face of the massive COVID-19 crisis.

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