TIGHTROPE WALK

THE HAVOC WREAKED BY COVID-19 CALLED FOR EXCEPTIONAL policy measures, and at least the “never-before” rhetoric before the Union budget was in step with the high expectations. The hope was that the government would spend big, not just on healthcare, the most immediate and urgent priority, but also on infrastructure, as the main engine of economic growth and employment. Sectors that have been hit the worst, such as most services, manufacturers of ‘non-essential goods’ and MSMEs, to name just a few, were also looking for succour.

But the high-decibel announcements and headlines notwithstanding, what comes out on a close reading of the budget is an admission by government of the severe revenue constraints it faces. Constraints that make spending difficult without resorting to high borrowings and non-tax modes of revenues such as disinvestment. In that sense, it is a realistic budget