Mains Paper 3: Economy
Prelims level: Not much
Mains level: Infrastructure Development
• Union Budget 2021-22 comes in the 74th year of India’s Independence and 2021 is a milestone year which will witness the 8th Census of Independent India as well as India’s turn at the BRICS Presidency; the year for our Chandrayaan-3 Mission; and the Haridwar Maha Kumbh. The formulation of the Budget has been done during the COVID -19 pandemic and the unprecedented hardships faced by the countrymen has steered the focus of Government to create new jobs by building core infrastructure, monetise assets, support health, urbanisation and aim for inclusive development.The six pillars of the Union Budget 2021-22 are:
• Health and Well-being
• Physical and Financial Capital, and Infrastructure
• Inclusive Development for Aspirational India
• Reinvigorating Human Capital
• Innovation and Research and Development
• Minimum Government and Maximum Governance
• A “National Monetisation Pipeline” of potential brownfield infrastructure assets has been announced in the Budget 2021-22. An Asset Monetisation dashboard will also be created for tracking the progress and to provide visibility to investors. Some important measures in the direction of monetisation are:
a) National Highways Authority of India and PGCIL each have sponsored one InvIT that will attract international and domestic institutional investors. Five operational roads with an estimated enterprise value of Rs.5,000 crores are being transferred to the NHAI InvIT. Similarly, transmission assets of a value of Rs.7,000 crores will be transferred to the PGCILInvIT.
b) Railways will monetise Dedicated Freight Corridor assets for operations and maintenance, after commissioning.
c) The next lot of Airports will be monetised for operations and management concession.
d) Other core infrastructure assets that will be rolled out under the Asset Monetisation Programme are:
• NHAI Operational Toll Roads
• Transmission Assets of PGCIL
• Oil and Gas Pipelines of GAIL, IOCL and HPCL
• AAI Airports in Tier II and III cities,
• Other Railway Infrastructure Assets
• Warehousing Assets of CPSEs such as Central Warehousing Corporation and NAFED among others and
• Sports Stadiums.
Petroleum and Natural Gas:
The government has kept fuel supplies running across the country without interruption during the COVID-19 lockdown period. Taking note of the crucial nature of this sector in people’s lives, the following key initiatives have been announced in the Budget 2021-22:
a) Ujjwala Scheme which has benefited eight crores households will be extended to cover one crores more beneficiaries.
b) 100 more districts will be added in next three years to the City Gas Distribution network.
c) A gas pipeline project will be taken up in Union Territory of Jammu and Kashmir.
d) An independent Gas Transport System Operator will be set up for facilitation and coordination of booking of common carrier capacity in all-natural gas pipelines on a non-discriminatory open access basis.
Augmenting Financial Infrastructure:
• Budget 2021-22 proposes to consolidate the provisions of SEBI Act, 1992, Depositories Act, 1996, Securities Contracts (Regulation) Act, 1956 and Government Securities Act, 2007 into a rationalised single Securities Markets Code.
Stressed Asset Resolution by setting up a New Structure:
• The high level of provisioning by public sector banks of their stressed Non Performing Assets (NPAs) calls for measures to clean up the bank books. An Asset Reconstruction Company Limited and Asset Management Company would be set up to consolidate and take over the existing stressed debt and then manage and dispose the assets to Alternate Investment Funds and other potential investors for eventual value realization.
• The Budget 2021-22 is a landmark in history for its clear insights and bold steps for rebuilding and reviving the Indian economy through a big push to infrastructure and asset creation.