Monday’s budget presentation by Finance Minister Nirmala Sitharaman came at a perilous moment for the Indian economy. The government faces the twin challenges of steering the nation out of an unprecedented recession while allocating more resources to fight the pandemic. The Union Budget is among the most highly anticipated events in the country. This year it acquired extra urgency, coming amidst a historic fall in economic indicators.
The Federal looks at some of the sectors that will benefit from Sitharaman’s third budget, and some that will not.
India’s spending on healthcare is the lowest among OECD and BRICS nations. A once-in-a-century pandemic has forced the government to substantially up that spending. Healthcare spending will go up by 137 per cent this year, an improvement over the less than 2 per cent of GDP it has traditionally spent on health.
Real Estate and Construction
Infrastructure projects across the country, including the country’s financial hub, Mumbai, came to a grinding halt following the nationwide lockdown, when migrants fled cities to their home states. The FM has now announced plans for a new financial institution to meet funding requirements for infrastructure projects. Realty companies, infrastructure players and associated players look set to benefit.
The government will form an asset management company to take over banks’ bad assets. Public sector banks including SBI, PNB and UBI are expected to benefit.
The government will also set up seven textile parks in the next three years. The move is part of the Centre’s efforts to position India as an integrated, globally competitive manufacturing and exporting hub for the sector.
The government has in the past stated its policy of boosting local manufacturing and making the country self-reliant. In line with that policy, Sitharaman on Monday announced that India would raise import tariffs on solar and mobile phone equipment and auto parts, raising concerns about the increasingly protectionist direction the country is taking.
The rural sector was one of the few bright spots in the Indian economy last year. The budget estimate for expenditure on the rural jobs scheme was Rs 730 billion for FY22, compared to the Rs 1.1 trillion expenditure in the revised estimate for FY21.