It was an impressive, growth-oriented 2021-2 budget unveiled by the Finance Minister last Friday. It has been a long time since I studied or taught economics, or analysed a budget, so I am a bit rusty on economic concepts. Nevertheless, I still remember enough of the basics to know that the Finance Minister and the Vice President teamed up to produce a very good budget, that addresses fundamental problems and is growth-driven.
A national budget is a tool to enable Government to achieve its development agenda and political manifesto. It is the Government’s planned programmes and projects for a fiscal year. It consists of estimated income and planned expenditures.
The Finance Minister did a thorough job offering a very good framework for recovery and growth during COVID-19. As expected, the budget will meet with criticism from the political Opposition, as it should, because that is the opposition’s role, although credit should be given to the Finance Minister for the new, creative and innovative aspects of the budget. In a time of unprecedented economic stress, the Government’s responsibility is to spend enough money to revive the economy, in order to ease enormous human suffering without triggering inflation or unaffordable deficits. Uncertain times call for high, responsible, Government spending; and the Government has not disappointed with the country’s largest budget.
Finance Minister Dr. Ashni Singh and Vice President Jagdeo are to be applauded for a well-rounded budget, that is expected to revive the struggling economy after five years of disastrous economic policies of the preceding Government. The economy was worsened by the coronavirus disease, but the previous Government made virtually no meaningful effort to mitigate the effects of corona on the public. This is the first full budget of this Government and of this new decade. The Singh-Jagdeo duo has done a fine job in planning a budget that is geared at reviving the growth impulses in the economy. It gives the public an opportunity to re-imagine the kind of economy that would be developed in years to come, and offers hope to the population that the country has a bright future ahead.
Coming in the backdrop of a global pandemic of the century, the Government boldly spells the Government’s growth agenda and a march towards building a prosperous country. It is visionary, path-breaking, inclusive, and growth-oriented. It is all rounded, with no sector neglected, that should foster growth in all productive sectors of the economy. Every sector has received an increase in funding.
Despite the devastating impact of the COVID-19 pandemic on the economy, Budget 2021-22 has not levied any new tax on the people. Instead, it has reduced taxes. It relies on non-tax resources, but a high deficit which is manageable. Once the economy grows, the Government can eradicate the debt. It has not burdened any section of the country with new or increased taxes. There is a significant increase for health, education, and capital expenditure to boost the economy that, aside from mining and rice production, contracted significantly last year and in the preceding years.
Health seems to be the top sector in the budget. The budget for health will help us to tackle the coronavirus by providing vaccines for all. There is also an increase in budgeting for education, agriculture, infrastructure, housing, security, social services, public administration, labour; in fact, for all sectors of the economy.
It is a budget with a difference from the preceding five years. The PPP Administration seems to be consistently focused on responsible spending, not profligacy. It boasts that this budget, like the budget of last September, has erased tens of billions of dollars in debt of the predecessor regime. This budget will infuse new energy during the time of corona. It should provide impetus for growth of the economy. It should help to revive the ailing economy and take the country on a path of development with job creation.
There are several aspects of the budget that can be critiqued, especially with regards to rural and hinterland spending and the farming sector, but not on salary. The Opposition contends that money is not set aside for salary increase. But as the VP pointed out, there is money for salary increment. Public sector incentives must be commensurate with productivity. There should also be an increase in the minimum salary. Government should not create a situation where state employment is more attractive than private sector, causing people to leave the private sector for Government jobs.
Also, Government should consider additional budgeting for auditing of state expenditures. Government agencies must be transparent in their expenditures. Government agencies and Ministries should deliver reports on a timely basis on performance, so that the public can be kept abreast and monitor them. In this way, people can better hold Government officials accountable.
Dr Vishnu Bisram