Towards Budget 2021-22

The Union Budget for 2021-22 will be presented in just over seven weeks from today. The context in which this Budget is being prepared is one of the most difficult faced by the country and any finance minister (FM) in independent India. The economy is still reeling from the Covid pandemic and the associated strict lockdowns of the first quarter (Q1). The pandemic continues to rage, with officially recorded Covid cases above 9.7 million. According to official estimates, GDP collapsed by an unprecedented 24 per cent (y-o-y) in Q1 and, despite a smart recovery, was still down by 7.5 per cent in Q2. Retail inflation has been tracking above 6 per cent for several months. The total employment rate (that