UNION BUDGET

Finance Minister Nirmala Sitharaman's Budget is bold and offers not only a direction for
growth but also a strong intent for reforms.
Health Expenditure:
The Covid-19 pandemic prompted Sitharaman to boost healthcare spending by 137% this year,
an improvement over the less than 2% of gross domestic product that India has traditionally
spent on health annually. The announcement extended shares of hospital operators including
Apollo Hospitals Enterprise Ltd., Max Healthcare Institute Ltd. and Narayana Hrudayalaya
Ltd.
Real Estate and Construction:
Real estate developers are set to benefit from plans for a new development finance institution
to meet funding requirements for infrastructure projects. Godrej Properties Ltd., Oberoi Realty
Ltd., and DLF Ltd. and Prestige Estates Projects Ltd. are among those likely to gain. The
announcement of an additional 11,000-km of highways and metros, along with rapid rail
transport projects for 27 cities ,and a long-awaited vehicle scrappage policy boosted stocks of
metal companies that will cater to added demand for steel and aluminum.
State-run banks
The government announced it was forming an asset management company to take over stressed
assets of banks in an effort to clean up one of the world’s worst pile of bad loans. Banks,
insurers rose on plans for setting up a bad-debt manager. State Bank of India Ltd., Bank of
Baroda, Canara Bank, Union Bank of India, Bank of India and Punjab National Bank could be
among the beneficiaries.
Textiles
Sitharaman’s announcement of the establishment of seven mega textile parks to be launched in
three years could boost the sector, benefiting companies including Century Textiles Ltd.,
Raymond Ltd., Trident Ltd. and Arvind Ltd. among others.
Losers
Bonds
A higher-than-expected $164-billion borrowing plan for the new fiscal year hit India’s
sovereign bonds, which slid after the announcement. The government also plans to raise
another 800 billion rupees by this fiscal year, on top of its projection of record 13.1 trillion
rupees of debt sales.

Exporters
India raised import tariffs on solar and mobile-phone equipment and auto parts, among others.
Announced with a view to boosting local manufacturing in line with the government’s focus
on self-reliance, the move may raise further concerns about India’s trade policies that are
increasingly seen as protectionist.
Farmers/rural India
The farm sector received attention but there were no major announcements that could help
address the ongoing unrest on New Delhi’s borders, where thousands are protesting for the
repeal of new agriculture laws. There were also no significant announcements on boosting
consumption in the rural economy. The budget estimate for expenditure on the rural jobs
scheme was 730 billion rupees for the financial year 2022, compared to the 1.1 trillion
expenditure in the revised estimate for FY21.
IT Sector:
India’s biggest services export contributors received little attention in the budget. There were
no sops to boost the future of information technology from Sitharaman this year for companies
including TCS Ltd., Infosys Ltd., Wipro, HCL Technologies, Tech Mahindra, along with mid-
sized firms like LTI, Mindtree, Persistent and Hexaware

MAYANMAR COUP:
The results of the 2020 election, held during the pandemic, were being seen by the NLD as a
mandate for its plan of constitutional reform, through which it aimed to do away with the
military's role in politics and governance.
The Myanmar military grabbed power in a coup on Monday (February 1) morning, ahead of a
scheduled meeting of the country’s newly elected Parliament. Aung San Suu Kyi, who led the
National League for Democracy (NLD) to a landslide win in the 2020 elections, and the de
facto leader of the ousted government, has been detained, according to reports from Myanmar.
President Win Myint has also been detained. In a broadcast on its own television early on
Monday, the military declared a one-year state of Emergency.
What triggered the coup
The military has alleged that the general elections held in November 2020 were full of
“irregularities” and that therefore, the results — a sweep for NLD — are not valid. It has
questioned the veracity of some 9 million votes cast in the election. The military had demanded
that the United Elections Commission (UEC) of Myanmar which oversees elections, or the
government, or outgoing parliamentarians prove at a special session before the new parliament
convenes on February 1, that the elections were free and fair. The demand had been rejected.
Speech of the army chief
According to ‘The Irrawaddy’ news website, Commander-in-Chief Senior General Min Aung
Hlaing said the Tatmadaw, or the Myanmar military, “needs to abide by the Constitution”,
which is the “mother of the law”. The military, he told officers at the National Defence College
via video conference, would respect all existing laws that are “not beyond the 2008
Constitution”, but “if one does not follow the law, such a law must be revoked. I mean if it is
the Constitution, it is necessary to revoke the Constitution. If one does not follow the law, the
Constitution must be revoked”.
The military’s Constitution
It was the military that drafted the 2008 Constitution, and put it to a questionable referendum
in April that year. The NLD had boycotted the referendum, as well as the 2010 elections that
were held under the Constitution. The Constitution was the military’s “roadmap to democracy”,
which it had been forced to adopt under increasing pressure from the west, and its own
realisation that opening up Myanmar to the outside world was now no longer an option but a
dire economic necessity. But the military made sure to safeguard in the Constitution its own
role and supremacy in national affairs. Under its provisions, the military reserves for itself 25
per cent of seats in both Houses of Parliament, to which it appoints serving military officials.
Also, a political party which is a proxy for the military contests elections. Its share of seats fell
further this time because of the NLD’s sweep.
The army’s allegation
A military spokesman said earlier in the week that the Tatmadaw had found 8.6 million
irregularities in 314 areas across all states and regions, and that this indicated the possibility
that people had voted “more than once”, or had engaged in some other “voting malpractice”.
The UEC has said it had found no evidence of any voting malpractice or fraud. It has said that
each vote was “counted transparently and witnessed by election candidates, election staff, the
media, observers and other civil society organizations”.
The army chief called the 2008 Constitution “effective”. Each section of the law has a purpose
and meaning, he said, and no one should take it upon themselves to interpret it as they pleased.
“Applying the law based on one’s own ideas may cause harm rather than being effective,” he
was quoted as saying by ‘The Irrawaddy’. He also spoke about how the military had revoked
two previous constitutions in Myanmar.

Democratic transition halted

The speech and the army’s assertion prompted the United States embassy and diplomatic
missions of 15 other countries and the European Union in Yangon to issue a joint statement
“opposing any attempt to alter the outcome of the elections or impede Myanmar’s democratic
transition”. Myanmar’s democratic transition had been a work in progress. The results of the
2020 election, held during the pandemic, were being seen by the NLD as a mandate for its plan
of constitutional reform, through which it aimed to do away with the military’s role in politics
and governance. But this was never going to be easy, given the tight constitutional restrictions
for amendments. But the hybrid system was a huge shift away from what it was until 2011, the
year the military decided to release Suu Kyi from her nearly two-decade-long house arrest, thus
inaugurating its “road map to democracy” on which there has been slow progress.
Suu Kyi had been more reconciliatory towards the Army than was expected even by her own
supporters, to the extent of defending the Tatmadaw at the International Court of Justice against
accusations of atrocities on the Rohingya. The stand-off over the elections was the first serious
face-off she had with the military since her release.