India's ruling party has promised "game-changer" plans to boost economic growth when Finance Minister Nirmala Sitharaman presents the 2021/2022 federal budget on February 1.
Here's a look at some top topics she is likely to cover on Monday, as Prime Minister Narendra Modi's government tries to bring the country's economy back on track:
HEALTHCARE SPENDING:
India is likely to double healthcare spending in the next fiscal year with the aim of raising expenditure in the sector to 4% of gross domestic output in the coming four years, as the country looks to fix shortcomings exposed by the pandemic.
The government could also increase a health tax from the current 1 per cent of income and corporate tax to fund the new programme.
PRIVATISATION DRIVE:
India is likely to aim to raise $40 billion from the privatisation of a whole host of companies in the energy, mining and banking, and selling a minority stake of large companies such as Life Insurance Corp.
BAD BANK:
India's central bank is expecting a sharp rise in bad loans in the banking system due to the pandemic.
Aiming to boost lending in the economy and improve the valuation of state-run banks before selling stakes in them, the government could finally announce the creation of a "bad bank", where bad assets of state-run banks could be parked and later sold at a discounted price in the market.
DEVELOPMENT FINANCIAL INSTITUTION:
India has set itself an ambitious target of building infrastructure worth 1.02 trillion in the country. However, funding these infrastructure projects may be a challenge given the revenue constraints and strained banks' loan books. Sitharaman is likely to announce https://www.livemint.com/budget/news/govt-likely-to-set-up-dfis-to-meet-infra-funding-needs-11611023004576.html a dedicated development financial institution to facilitate financing greenfield infrastructure projects.
IMPORT DUTY:
India is considering hiking import duties by 5%-10% on more than 50 items including smartphones, electronic components and appliances. The move to increase import duties is part of Modi's "self-reliant India" campaign that aims to promote and support domestic manufacturing.
