Union Budget 2022-23: Whither Amrit Kaal

Nirmala Sitharaman did not talk about the developmental targets promised for this year under the Strategy for New India@75, but set the country on a new journey of hope till 2047

Whither amrit kaal
Illustration: Sorit Gupto Illustration: Sorit Gupto

The Union Budget 2022-23 was anything but what a budget should be. It gave a grand idea of the future, but not much of this intent was translated into monetary provisions. After Union finance minister Nirmala Sitharaman ended her speech — her shortest so far — on the floor of Parliament, a phrase she repeatedly used trended on social media: Amrit Kaal, which loosely translates to ‘the era of elixir’.

“This Budget seeks to lay the foundation and give a blueprint to steer the economy over the Amrit Kaal of the next 25 years — from India at 75 to India at 100,” said Sitharaman in her speech. With this preamble, one can only read or analyse the budget in future terms, which themselves have not been defined.

Expectations from this budget were already fuelled by the promise of a “New India” in 2022 or “India@75”. 2022 is the year the government is due to fulfil the promises defined in the NITI Aayog’s “Strategy for New India@75” announced in 2018. From becoming a $4 trillion economy to generating employment for women, doubling farmers’ income and eradicating poverty, there are some 41 targets under this strategy, of which at least 17 have a deadline in 2022.

But according to an analysis of all government data, published in Down To Earth’s “State of India’s Environment 2022” report, the country is likely to miss nearly all the targets because of slow progress. Thus, the Union Budget 2022-23 and the Economic Survey 2021-22 were eagerly awaited to understand where the country stood.

But it seems this review was given a pass, with the government directly taking us into the Amrit Kaal and supposedly extending all “New India” targets to 2047, the centenary year of India’s Independence. Neither the budget speech nor the allocation tables mentioned the targets promised under the “India@75” strategy. Sitharaman did not even bring up doubling of farmers’ income, the biggest and most critical target to be met this year.

The size of the economy was also not talked about, although the finance minister said to various media outlets later that India was headed to being a $5 trillion economy.

Nowhere near goals

The main target for the “India@75” vision is to increase per capita income from $1,900 in 2017-18 to $3,000 in 2022-23. Achieving the “New India” goal as a whole is conditional to this income growth, which according to the vision strategy would “enable us to achieve freedom from squalor, illiteracy, corruption, poverty, malnutrition and poor connectivity for the common Indian.”

Latest Union government data for 2021-22 shows that India’s per capita income is around $1,258 (Rs 93,973) — lower than in 2017-18. In the last two years, the pandemic accelerated the country’s economic slowdown that started in 2016. To reach a $3,000 per capita income level in the next 70 weeks, we have to more than double the current figure. This entails unmatched economic growth, a miracle.

To increase per capita income and thus the size of the overall economy, the “India@75” vision targets include raising the employment level, and in particular increasing female labour participation rate to at least 30 per cent by 2022-23.

Going by government data, this figure was just 16.9 per cent in January-March 2021. According to December 2021 data with the Centre for Monitoring Indian Economy, 23 per cent of the 35 million unemployed people in the country actively seeking jobs are women.

Another critical indicator for “India@75” — pivotal to the per capita income growth — is the increasing of India’s GDP (gross domestic product) to $4 trillion by March 31, 2023. This is short by $1.5 trillion by the end of 2021 fiscal.

Rather, poverty levels have increased in India, even though there is no official estimate since 2011. In December last year, the NITI Aayog released an index that used health, education and standard of living to gauge poverty levels and their intensity. It says 25.01 per cent of India’s population suffers from multidimensional poverty.

The next promise for “New India” is to double farmers’ income from the 2015-16 level by 2022. The recently released “Land and Livestock Holdings of Households” and “Situation Assessment of Agricultural Households” reports, under the 77th round of the National Sample Survey, have some indicators on whether this promise can be kept.

The monthly income of agricultural households has increased by 59 per cent since 2012-13 — an annual growth rate of 7.8 per cent. But to get a real sense of this growth, one must factor in the annual inflation rate, which makes the growth rate just 2.5 per cent.

“As such, the target income for doubling by 2022 is Rs 21,146 per month (taking inflation also into account),” said the Alliance for Sustainable and Holistic Agriculture or ASHA, in a statement.

However, the estimated monthly income of farm households in 2018-19 was Rs 10,218 per month in nominal terms, as the “Situation Assessment Survey of Agricultural Households” shows.

“This was the sixth year of doubling of farmers’ income. The previous five budgets had long poems about this target but now, when it was about accounting for those six years, there was silence,” said farm union Jai Kisan Andolan’s founder Yogendra Yadav.

The overall allocation for the agriculture sector in the Union Budget 2022-23 increased marginally to Rs 132,513.62 crore from the 2021-22 revised estimates (RE) of Rs 1,26,807.86 crore.

However, the Market Intervention Scheme and Price Support Scheme (MIS-PSS) was allocated Rs 1,500 crore — 62 per cent less than the Rs 3,959.61 crore in the RE of the last financial year.

The Pradhan Mantri-Annadata Aay Sanrakshan Abhiyan (PM-AASHA) saw an even deeper cut. It was allocated just Rs 1 crore as against an expenditure of Rs 400 crore in 2021-22. Both schemes ensure procurement on minimum support price, especially for pulses and oilseeds.

Climate, front and centre

The budget this year has put climate action at the core of India’s “transformative” phase of development till 2047. The focus on energy transition, climate action and electrification is encouraging, but needs committed strategy and upscaled funding.

There are several strands in the new budget, which, if implemented at scale, can augment the progress on clean air and low carbon gains.

Sitharaman in her budget speech has announced four priority areas — productivity enhancement and investment; sunrise opportunities; energy transition; and climate action. Clean energy has been taken in contexts as diverse as empowerment of women, setting up of data centres and electrification of remote border villages.

“To facilitate domestic manufacturing for the ambitious goal of 280 gigawatt installed solar capacity by 2030, an additional allocation of Rs 19,500 crore for production-linked incentive for manufacture of high efficiency modules, with priority to fully integrated manufacturing units from polysilicon to solar PV modules, will be made,” said Sitharaman.

But the declarations fall flat after a closer look at the budget documents. The budget estimate for the Union Ministry of New and Renewable Energy for 2022-23 shows that investment in Solar Energy Corporation of India (SECI), the only public sector undertaking working on solar energy, has been nearly halved — to less than Rs 1,000 crore from over Rs 1,800 crore.

There were great expectations regarding electric mobility, and the budget puts out good intent here. Interestingly, the deployment of electric vehicle programmes has been linked explicitly with urban planning strategies of zero emissions public transport and low emission zones.

A battery-swapping strategy has also been proposed to overcome the limitation of land-constrained cities. The private sector is expected to develop business models for “Battery or Energy as a Service” to improve the electric vehicle ecosystem. Dense charging infrastructure has been proposed as part of the harmonised infrastructure development for energy storage, grid scale battery system for renewable energy and data centres.

Though this is encouraging, the budget is again silent on the zero emissions target and mandate.

It is now understood that the proposed schemes require huge private sector investment. This can only be viable if market demand is stimulated with sustained targets to bring more certainty in investment decisions.

This is also needed to be consistent with India’s signing of zero emissions vehicle pledge in Glasgow. But private investment can be hugely uncertain if the target and zero emissions mandate do not provide the milestones.

This was first published in Down To Earth’s print edition (dated 1-15 March, 2022)

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