The tussle over MGNREGA allocation:
After facing criticism on lowering of the MGNREGA expenditure in the Budget, the government said that it could be increased if the need arises in the future.
As per the Minister of State for Finance Anurag Singh Thakur, allocations under MGNREGA were raised massively from Rs 61,500 crore to Rs 1,11,500 crore in the current financial year. Now for FY22, it has been brought down to Rs 73,000 crore
The government's expenses under MGNREGA rose exponentially in FY21. It was required to create employment for labourers who migrated to villages after the outbreak of the COVID-19.
Now that the labourers have returned to their worksites in urban areas, a reduction in MGNREGA allocation is on expected lines. Still, on a like to like basis, the government has increased the MGNREGA allocation to Rs 73,000 crore from 61,500 crore in the previous budget.
Support for borrowing program:
The Indian government is aiming to maintain its borrowing cost below 6% during FY22.
As per the senior officials, RBI has assured the government to maintain yields at comfortable levels. They are expecting bond yields to stay below 5.9% for FY22. Even the RBI governor Shaktikanta Das has assured investors to maintain an accommodative policy stance. It will help the government to carry its borrowing program.
The government has set a massive borrowing target of Rs 12 lakh crore for FY22. And, RBI's role is going to be crucial in achieving that. RBI in its latest monetary policy has provided a lot of friendly measures to support the borrowing program. And, it must continue to do so in the near future as well.
Incentivizing PSU sales:
The center could offer incentives to states to make its stake sale program lucrative for them. As per an EconomicTimes report, the incentives would be finalized once the budget session is over in Parliament.
The government has set the divestment target of Rs 1.75 lakh crore for FY22. It includes a few of the big names like BPCL, AirIndia, Concor, LIC, etc. The government would also attempt to privatize at least two PSU Banks. However, the names have not been finalized yet.
Divestment/privatization has been a key focus area for the government for many years now. Under the new public sector policy, four strategic areas are identified. The government will maintain only a bare minimum of holding in these sector-specific companies. In the remaining sectors, all CPSEs will be privatized. It will free up resources that could be put to more productive uses, including building infrastructure.
In this light, incentivizing the whole process will pursue the states to work efficiently towards it.