India proposed doubling healthcare spending in an annual budget unveiled on Monday and lifted caps on foreigners investing in its vast insurance market to help revive an economy that suffered its deepest recorded slump as a result of the pandemic.
Delivering her budget statement to parliament, Finance Minister Nirmala Sitharam projected a fiscal deficit of 6.8% of gross domestic product for 2021/22. The current year was expected to end with a deficit of 9.5%, she said, well up from the 7% expected earlier.
Sitharaman proposed increasing healthcare spending to Rs 2.2 trillion ($30.20 billion) to help improve public health systems as well as the huge vaccination drive to immunise 1.3 billion people. Sitharaman said the foreign direct investment (FDI) cap for the insurance sector would be increased to 74% from the current 49%. She also allocated Rs 200 billion ($2.74 billion) to recapitalise state-run banks that are saddled with bad loans and have been a drag on growth.
To bridge some of the deficit, the government plans to raise 1.75 trillion Indian rupees from selling its stake in the state run companies and banks including IDBI bank, an insurance company and oil companies.