Synopsis
It is unfortunate that it took a pandemic to finally set our priorities right. An outlay of Rs 2,24,000 crore is 224% higher than the Rs 93,000 crore in FY2021. This will lay the building block to the PM Aatmanirbhar Swasth Bharat Yojana announced by Nirmala Sitharaman in her budget earlier this week.
Agencies
Insurance FDI rules have been further liberalised to 74% foreign holding, with caveats. In this environment, Rs 1.75 lakh crore looks doable. But will it happen?
The intent of the Narendra Modi government is loud and clear. It has not shied away from spending in the Covid-wracked period when it has been most essential, and the 9.5% fiscal deficit bears testament to that. GoI has signalled that it will put its money where its mouth is in FY2022 to end with 6.2% fiscal deficit. The billion-rupee question is: can India deliver to plan?
Union Budget 2021: Govt sets divestment target of Rs 1.75 tn, after big misses in recent years A sharp jump in capital expenditure points to a preference to solidify medium-term growth boost while also entailing larger multiplier benefits for the economy Radhika Rao February 03, 2021 20:18:49 IST Government eyes big divestment target in the next fiscal. Reuters
The strong cyclical growth backdrop and global tilt towards loose fiscal orthodoxy were expected to see the government toe the preferred line of fiscal conservatism. Instead, they used this degree of freedom to improve the credibility of the budget math and adopt a more investments-focused view rather than boost demand in the short-term, with the latter already benefiting from the ‘unlocking dividend’.
Last Updated: Tue, Feb 2nd, 2021, 03:39:30hrs
India batting on a sticky pandemic wicket was certainly in no shape to offer sops and benefits. Much like the Indian cricket team which was left reeling at 36 all out at Adelaide, there was hardly any room for Sitharaman to squeeze goodies for Indian citizens.
India Inc and many on the Dalal Street had in fact given up hopes of benefits. On the contrary, market expectations were gloomy on the probability of additional taxes.
But Sitharaman certainly had other plans.
At the end of her brisk 110 minute (speech) stay at the crease, the Finance Minister gave much for India Inc to cheer. In the process, she not only infused spark among India Inc but also got some interest back on the stock indices.