Resource centre on India's rural distress

Budget 2021-22: A political economy perspective -Yamini Aiyar

Examining the 2021-22 Union Budget with a political economy lens, Yamini Aiyar contends that the policy choices reflects Government of India’s propensity to centralise rather than to devolve, and a shift away from welfarism.

Following the presentation of the Union Budget 2021-22 by Finance Minister Nirmala Sitharaman on 1 February, economists have carefully scrutinised the fiscal math and debated the economic rationale behind the policy choices. Beyond the fiscal math, the Budget offers important insights into the political-economy contours of the pathways through which the central government hopes to nurture India’s economy back to health after the unprecedented Covid-19 shock. In this post, I reflect on the political economy of the choices made, and assess their implications for India’s economic recovery going forward.

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