Macroeconomic Challenges and the Social Sector

The Union Budget 2022–23 is the second budget presented in the shadow of the Covid-19 pandemic but with some light streaming in and the shadow showing signs of fading away. The effect of the pandemic has been varied across sectors and professions. While some sectors like banking and financial services adapted to this change fairly smoothly and quickly, others like the education sector took longer and in the case of yet others, like the tourism and hotel industry, there were no options available. A large number of people at the lower end of the income stream and engaged with unskilled jobs were hit the hardest. Large-scale loss of jobs resulted in migration on a mass scale. The pandemic has thus thrown up several macroeconomic challenges for the policymakers. In the wake of these challenges, it is of utmost importance that we take a close look at the expenditure allocations in the Union Budget 2022–23 to ascertain where the Indian economy is headed and how these provisions would help the economy tide over these challenges.

The article first sets the context and highlights the macroeconomic challenges that the economy is confronted with. Then it takes a close look at the expenditure allocations within the six-pillar framework outlined by the finance minister in the 2021–22 budget before it concludes.