My presentation at the Global Foundation for Sustainable Transformation on the 7th February. This covers some aspects where the Government took treat while giving a treat to large numbers of population. This is the first stimulus budget of the Union Government to drive consumption to achieve growth. RBI on the 6th February 2021 unleashed a supportive monetary policy. In the medium term it may give rise to inflation. In the backdrop of pandemic that had hit the economy badly following a slow growth in 2018-19, inflation led growth may come in but taming it would be the job of the central bank.

1. Global Foundation for
Sustainable Transformation
Post COVID-19 Budget: Retreat
and the Treat
Dr Yerram Raju Behara
Economist, Risk Management and SME Specialist
Adviser, MSMEs, Govt. of Telangana &
Director, Telangana Industrial Health Clinic Ltd.

2. POST COVID ECONOMIC RECOVERY
UNEVEN
 PMI and GST collections suggest economic recovery while
other indicators are plateauing.
 Mint’s State Recovery tracker shows smaller States
recovered faster than larger States, measured in terms of
public movement, power consumption and vehicle sales.
 Top Six State economies laggards – Maharashtra, Gujarat,
Karnataka, West Bengal, Rajasthan, Uttar Pradesh.
 Workplace mobility is gradually becoming uniform across
States.
08-02-2021
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3. RETREAT & THE TREAT
Fiscal Deficit Compromised
Asset Reconstruction Company
for NPA resolution
Trust Deficit in financial sector
Drifting from the Federal
Right Noises on Digitization,
Innovation, Health, Infrastructure,
Setting up DFIs both in public sector
& Private sector to boost
infrastructure spend absorbing
lessons from the failure of IDBI,
IFCI, IL&FS etc
9.5% of GDP from 6.8%
in 20-21
Job creation &
Job
enrichment –
Startups
Supply push
Demand push
Farm Laws – 3
States UP,
Punjab, Haryana
in the lead in
agitation 08-02-2021
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4. MAJOR ALLOCATIONS
Amount
(Rs.Crores)
Ministry of Housing and Urban Affairs 54,581
Ministry of Health and Family Welfare 73,932
Ministry of Education 93,224
Ministry of Railways 110,055
Ministry of Road Transport and Highways 118,101
Ministry of Agriculture and Farmers' Welfare 131,531
Ministry of Rural Development 133,690
Ministry of Home Affairs 166,547
Ministry of Consumer Affairs, Food and Public
Distribution
256,948
Ministry of Defense 478,196
Allowing a normal
ceiling of net borrowing for
the states at 4% of GSDP
for 2021-22
Additional Borrowing
ceiling of 0.5% of GSDP
subject to conditions
NSSF loan to FCI for food
subsidy to be replaced by
making budget provisions.
₹1,18,452crore as
Revenue
Deficit grant to 17 states in
2021-22
BUDGET 2021 – Gateway to post covid-19 V-
Shaped Recovery of the Economy
08-02-2021
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5. Health and Wellbeing
The Highest ever Budget outlay for Health and Wellbeing is estimated to be
Rs.2,23,846 crore for FY 2021-22, which is a rise by 137% Y-o-Y basis.
Atma
Nirbha
r
Swasth
Bharat
Yojana
Outlay ₹64180 crore over 6 years
Support for Health and Wellness centers
Setting up of Integrated Public Health Labs
Establishing critical care hospital blocks in
Aspirational Districts
Strengthening NCDC
Expanding integrated health information
portal
Health Outlay (₹ crore)
94452
2021-22
2020-21
223846
Pnuemococcal vaccine to
be rolled across the country
₹35000 crore for Covid-
19 Vaccine in 2021-22
Introduction of National
Commission for Allied
Healthcare Professionals Bill
08-02-2021
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6. Physical & Financial Capital, and Infrastructure
MITRA Scheme to create world class infrastructure for global champions in textile sector leading to
creation of 7 textile parks over 3 years.
PLI launched to create manufacturing global champions across 13 sectors with amount committed nearly
₹1.97 lakh crore in next 5 years starting FY2021-22.
Hydrogen energy mission to be launched.
PPP mode to be utilised for managing operational services of major ports.
100% electrification of Broad-gauge Routes by 2023.
Indigenously developed automatic train protection system to be launched.
NIP Project
pipeline
expanded to
7400 projects
National Rail Plan
•Aims at developing adequate rail
infrastructure by 2030 to cater to the
projected traffic requirements up to
2050.
• The objective is to increase the modal
share of rail in freight from the current
level of 27 per cent to 45 per cent.
08-02-2021
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7. Inclusive Development for Aspirational India
Amalgamation of 44 labour laws into four labour codes.
Extending coverage of SWAMITVA Scheme to all states/UTs
Expansion of Operation Green scheme to include 22 perishable
products
1000 more mandis to be integrated with e-NAM
Multipurpose Seaweed Park to be set up in Tamil Nadu
Concessional Credit Boost to farmers – Non-Budget intervention.
Agri Infrastructure Fund and Emergency working capital for farmers
Rationalised single Securities Markets Code by 2022
World class fintech hub at GIFT IFSC
Permanent institutional framework for Corporate bond market
SEBI as regulator for WDRA for development of commodity market ecosystem
Investor charter as a right across all financial products
Amending the Insurance Act,1938 to increase the FDI limit with safeguards
ARCs’and AMCs’ to resolve stressed assets problem of PSBs.
FINANCIAL
SECTOR
REFORMS
?
AGRI REFORMS
08-02-2021
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8. Reinvigorating Human Capital
EDUCATION & SKILLS
Revamped
Post Matric
Scholarship
Scheme for
welfare of
SCs
100 new
Sainik
schools
750 Eklavya
schools in
tribal areas
Realigning
National
Apprenticesh
ip Training
scheme for
graduates
and diploma
holders in
Engineering
Partnership
with UAE
and Japan in
area of skill
development
and
recognition
Migrant
Labours
&
Workers
One nation one ration card scheme under
implementation in 32 states and UTs.
A portal to be launched for gig, building and
construction workers
Social security benefits will be extended to gig and
platform workers
08-02-2021
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9. MSMES GOT HIGHER ALLOCATION
 Requires right direction
 Atma Nirbhar Bharat Abhiyan Scheme 2 relating to Subordinate
Debt did not take off
 When Risk Appetite is low, Banks need extra push and support
 Establish supportive institutions to rebuild in the trust in
manufacturing
 Telangana Model is the best for revival.
 Industrial Health Clinics can be established under PPP mode.
 Stressed enterprises get handholding, mentoring and
counselling support in addition to margin funding for revival
through such clinics
08-02-2021
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10. MINIMUM GOVT & MAXIMUM
GOVERNANCE, AS STATED
 National Research Foundation with outlay of ₹50,000crore over 5 years
 National Language Translation Mission to boost internet access
 Deep Ocean Mission for ocean exploration and biodiversity conservation
INNOVATION &R&D
❖ Increase in borrowing limits of state governments
❖ Privatization of Public Sector Enterprises
❖ Voluntary Vehicle Scrapping policy
❖ Urban Swachh Bharat Mission with outlay ₹1,41,678crore over 5 years
All Constitutional institutions use the word Central instead
of Union as stated in the Constitution – more emphasis on
centrality instead of Federal Structure prominence. 08-02-2021
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11. STABILITY OF FINANCIAL MARKETS VITAL
❖ Bad financial system and good economy cannot coexist
❖ Confidence in Bonds took a hit with the failure of Yes Bank, Frankleton
Templeton
❖ Financial system helps:
❖ Growth of capital market
❖ Price stability through efficient monetary policy engagement
❖ Efficient Forex markets promote international trade
❖ Infrastructure growth; Enterprise and Employment growth
❖ Government securities market
❖ Balanced Regional Development
❖ Economic Integration
❖ Political stability
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08-02-2021
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12. Debt, Debt, Debt
 Union Government to borrow Rs.80000cr in the next 2 months
 Divestment in PSUs and 2 PSBs
 States Borrow tending to overreach their fiscal deficit
 States get 41% of tax revenues as their share as per 15 Finance
Commission
 With Union Government resorting to levy of Agricultural Cess States will
be losers in their share to that extent as States cannot get a share in such
levy
 Banks Liabilities – Savings from the public – could be on the decline with
lower rates of interest unsustainable
 Per capita debt during the next 5 years will reach new heights and the
next generation will have to shoulder the burden of repayment while the
capacity of assets created may not generate enough to sustain
 Sustainability ?
08-02-2021
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13. THANK YOU
13
Dr. B. Yerram Raju, Economist & Risk Management
specialist
www.yerramraju1.com
We are at the tipping point; “It is a great challenge and opportunity.
We should be part of solution and not problem”. Sadguru
08-02-2021
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