Rising to the occasion, taking steps to rebuild the economy and meeting market expectations, Budget FY 2021-2022 focused on pump priming the economy for growth. Some of the key highlights were spends on healthcare and wellness infrastructure; investments in physical infrastructure by way of allocation to roads, highways, railways, ports, urban infrastructure amongst others; strengthening and consolidation of the financial infrastructure, including a fintech hub at GIFT City; introduction of a single securities market code; a corporate bond institutional framework; the creation of an AMC structure for stressed assets; the setting up of Development Finance Institution for funding infrastructure projects and increase in foreign ownership of Insurance firms with some safeguards.
Adequate focus and allocation of resources was given to agriculture, the rural economy and for employment creation.
Fiscal deficit is pegged at 9.5% of GDP this year and is estimated at 6.8% of GDP in FY'22. Clearly, the Government has prioritised bringing the economy back on track, even if it means higher borrowings by the Government - an additional Rs 80,000 crore this year and gross amount of Rs 12 lakh crore in FY'22. Higher spends and investments is the need of the hour to bring normalcy and growth back to post-pandemic levels, even if it is at the cost of interim fiscal deviation. The path to fiscal consolidation was indicated - i.e., below 4.5% by FY 25-26.
To raise resources, an aggressive disinvestment and privatisation plan was announced including the IPO of LIC and privatisation of two public sector banks. In a major relief to all, there was no announcement of any "Covid" tax, wealth tax or tax on capital gains which was a concern in the run up to the budget.
Overall, a very good budget focused both on the immediate task on hand as well as investments over the medium-term all aimed at revitalising economic growth.