Union Budget 2021: States' borrowing limit raised to 4 pc

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 Rs 2.2 trillion.

The government will launch a new federal health scheme with an outlay of around Rs 641 billion over the next six years, she told parliament kicking off her budget speech.

"The investment on health infrastructure in this budget has increased substantially," said Sitharaman as lawmakers thumped their desks in approval.

"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 FM said.

Sitharaman said the government's Aatmanirbhar packages totalling Rs 27.1 lakh crore to deal with the COVID pandemic, accelerated the pace of structural reforms.

In the first ever paperless Union Budget, Sitharaman also proposed the introduction of Aatmanirbhar health programme with an outlay of Rs 64,180 crore.

This will be in addition to the national health mission, she said.

The finance minister also said India has two COVID-19 vaccines and two more will be launched.

She noted that the government has stretched its resources for the benefit of the poorest of the poor.

Fiscal deficit pegged at 6.8%

The finance minister said the government estimates fiscal deficit of 6.8 per cent of the gross domestic product (GDP) in the next financial year beginning April 1.

However, the fiscal deficit in 2020-21 is estimated to soar up to 9.5 per cent due to rise in expenditure on account of the outbreak of COVID-19 and moderation in revenue during this fiscal year.

The lockdown to check the spread of virus adversely impacted the economic activities resulting in contraction in the economy by an estimated 7.7 per cent.

For the current fiscal year, the government had earlier pegged the fiscal deficit of 3.5 per cent.

Rs 20,000 cr DFI to promote infra financing

The FM said the government will set up a Rs 20,000 crore Development Finance Institution (DFI) with a view to mobilise Rs 111 lakh crore required for funding of the ambitious national infrastructure pipeline.

The minister said that a professionally managed DFI to be set up to provide, enable and catalyze infrastructure financing.

The government proposes Rs 20,000 crore to capitalise this institution and aims to have lending portfolio of at least Rs 5 lakh crore in three years, she said.

Disinvestment target at Rs 1.75 lakh cr

The government has budgeted Rs 1.75 lakh crore from stake sale in public sector companies and financial institutions, including 2 PSU banks and one insurance company, in the next fiscal year.

Unveiling the PSE policy in Budget 2021-22, Finance Minister Nirmala Sitharaman said barring four strategic areas, public sector companies in other sectors will be divested. The policy would give a clear roadmap for disinvestment in strategic and non-strategic sectors.

She said strategic sale of IDBI Bank, BPCL, Shipping Corp, Container Corporation, Neelachal Ispat Nigam Ltd, among others, would be completed in 2021-22 fiscal year beginning April 1. Also legislative amendments required for LIC IPO would be brought in 2021-22.

She said NITI Aayog has been asked to work on next list of central public sector companies for strategic disinvestment.

Sitharaman said a revised mechanism for fast-tracking closure of loss making PSUs would be worked out and an incentive package would be developed to incentivise states to sell stake in state PSUs.

Digital payment

The government proposed Rs 1,500 crore-scheme to promote digital payments in the country.

Sitharaman said there has been a manifold increase in digital payments in the recent past.

"To give a further boost to digital transactions, I earmark Rs 1,500 crore for a proposed scheme that will provide financial incentive to promote digital mode of payment," the minister said.

 

Rs 18,000 crore for urban transport

The government on Monday announced a Rs 18,000 crore scheme to augment public transport in urban areas.

In the first paperless Union Budget, Finance Minister Nirmala Sitharaman said there will be 100 per cent electrification of broad gauge rail tracks by December 2023.

She also said a record Rs 1,10,055 crore will be provided for railways, of which Rs 1,07,100 crore will be for capital expenditure in 2021-22.

Voluntary vehicle scrapping policy

Sitharaman announced the much-awaited voluntary vehicle scrapping policy to phase out old and polluting vehicles.

Sitharaman said that under voluntary vehicle scrapping policy, personal vehicles would undergo fitness test after 20 years while commercial vehicles would require it after completion of 15 years.

She said this will promote fuel-efficient and environment friendly vehicles while cutting on India's huge import bills.

Sharp rise in capital expenditure

Sitharaman proposed a sharp rise in capital expenditure for the next fiscal to Rs 5.54 lakh crore, from Rs 4.39 lakh crore in the current financial year.

The finance minister said Railways will monetise dedicated freight corridors.

Sitharaman also said national monetisation pipeline for potential brownfield infrastructure assets will be launched and pipelines of GAIL (India) Ltd, Indian Oil Corp (IOC) and HPCL will be monetised.

A sum of Rs 65,000 crore has been allocated for the development of national highways in Kerala. She announced the amount in the Union Budget 2021 being presented in Parliament. 

She announced Rs 1,967 crore for the second phase of Kochi Metro rail project.

Rs 25,000 crore has been earmarked for road projects in West Bengal.