India's Finance Minister Nirmala Sitharaman stands next to Minister of State for Finance and Corporate Affairs Anurag Thakur (L) as she leaves her office to present the federal budget in the parliament in New Delhi, India, February 1, 2021. Reuters/Anushr
New Delhi: Unveiling an annual budget on Monday aimed at reviving an economy that plunged into deepest recorded slump amid the coronavirus pandemic, Finance Minister Nirmala Sitharaman proposed doubling healthcare spending to 2.2 trillion Indian rupees ($30.20 billion).
The government will launch a new federal health scheme with an outlay of around 641 billion Indian rupees ($8.80 billion) over the next six years, she told parliament kicking off her budget speech.
India, which has the world's second highest coronavirus caseload after the United States, and currently spends about 1% of gross domestic product on health, among the lowest for any major economy.
"The investment on health infrastructure in this budget has increased substantially," said Sitharaman as lawmakers thumped their desks in appproval.
The world's second-most populous country has begun a huge vaccination drive and a steep fall in new coronavirus cases over the past few months is supporting an economic recovery.
"There are signs that the political, economic and strategic relations in the post COVID era are changing and ... India is well well-poised to be the land of promise and hope."
The economy is projected to contract 7.7% in the current fiscal year ending in March but then gather steam in 2021/2022 to hit 11%, which would make it the world's fastest growing major economy ahead of China's estimated 8.1% pace.
Still, it would take the economy two years to reach pre-pandemic levels, the government said.
India's blue-chip NSE Nifty 50 and S&P BSE Sensex indexes extended gains to around 1.4% each as Sitharaman laid out her proposals. The Indian rupee was marginally stronger at 72.86 against the dollar, while the 10-year bond yield slipped to 5.89%.
These are the initial highlights from Sitharaman's fiscal 2021-22 budget speech:
EXPENDITURE
* 2020/21 revised expenditure 4.36 trillion rupees ($59.74 billion)
* 2020/21 capital expenditure estimated at 5.43 trillion rupees ($74.40 billion)
* 2020/21 budget deficit said to be 9.5% of GDP - Bloomberg
* To provide more than 2 trillion rupees ($27.40 billion)for states and autonomous bodies
HEALTHCARE
* India to allocate 2.2 trillion rupees ($30.20 billion) for healthcare in 2021/22
* Sitharaman says expect two or more COVID-19 vaccines soon
* India to launch new federal health scheme with outlay of around 641 billion rupees ($8.80 billion) over the next six years
* To allocate 350 billion rupees ($4.81 billion) for COVID-19 vaccines, and allocate more funds if needed.
FINANCE
* India to introduce bill for development financial institution with capital of 200 billion rupees ($2.74 billion)
* To infuse 200 billion rupees ($2.74 billion) for recapitalization of state-run banks in FY2022
* India to consolidate certain SEBI regulations for Securities Market Code
* To relax FDI cap for insurance sector to 74% from 49%
* Set up asset reconstruction company to take over toxic assets
INFRASTRUCTURE
* To allocate 2.87 trillion rupees ($39.40 billion) for clean water supplies over the next five years
* To allocate 3 trillion rupees ($41.10 billion) for power sector for next five years
* To provide 10 billion rupees ($137.01 million)to Solar Energy Corporation of India
* Sitharaman says will move to end power distribution company monopolies
* To double ship recycling capacity by 2024
* India to monetise infrastructure assets
TRANSPORT
* Allocates 1.18 trillion rupees ($16.17 billion) for ministry of roads and highways
* Allocates 1.1 trillion rupees ($15.07 billion) for railways
* Railways to monetise freight corridors
* India to launch new vehicle scrapping policy
