- India turns to Finance Minister today for the country's expenditure plan
- Many expect Nirmala Sitharaman to announce generous public spending
- The government is likely to double healthcare spending
Here are the top 10 points in this big story:
Ms Sitharaman will present the ninth budget of Prime Minister Narendra Modi's government in the Lok Sabha at 11 am. While the finance minister has promised an unprecedented budget, the PM tempered expectations saying the plan is to extend the measures announced in "4-5 mini budgets in 2020" for a pandemic-hit nation.
Budget 2021 will be paperless, another first, as Ms Sitharaman was seen this morning carrying a tablet in a red sleeve, matching her cream and red silk sari, with the national emblem embossed on it.
Experts say Ms Sitharaman could unveil plans to shift the economy from survival mode to revival to meet projections of 11 per cent growth rate in the next financial year that starts April, following a forecasted 7.7 per cent contraction in the current fiscal.
For an economy that was already in slowdown before the pandemic, stumbling to its slowest growth in 11 years, and slipped into recession during the COVID-19 crisis, the government will need to deliver more than a ledger of accounts, or can old schemes in a new bottle. Spending over 15 per cent more than last year with an emphasis on infrastructure and healthcare, putting more money in the hands of the average taxpayer and easing rules to attract foreign investments are expected to be on top of the agenda.
The government is likely to double healthcare spending with the aim of raising expenditure in the sector to 4 per cent of gross domestic output in the coming four years, as the country looks to fix shortcomings exposed by the pandemic, news agency Reuters reported. The government could also increase a health tax from the current 1 per cent of income and corporate tax to fund the new programme.
Corporates and industry chambers expect the finance minister to unveil some tax relief measures for pandemic-hit sectors such as real estate, aviation, tourism and autos. Analysts say the government would also have to consider providing tax relief to small businesses and consumers to boost consumer sentiment and revive economic growth.
But many also expect the measures to drive up the fiscal deficit, likely to be over 7 per cent in the current financial year, far above the 3 per cent of gross domestic product mandated by law.
A spurt in tax collection in recent months, aided by the lower base of the current year and an expected economic turnaround that saw January GST revenues touch a record high, and hiking import duties on several high-end goods will offer some respite for Ms Sitharaman.
The government is likely to raise funds from privatisation of a whole host of companies in energy, mining and banking, and selling minority stake of large companies such as Life Insurance Corporation. Ms Sitharaman may also announce plans to fix the recurring problems in the banking sector, including the creation of a new infrastructure development bank and a "bad bank" to unburden banks of toxic assets, news agency Reuters reported.
Among the most-watched figures in the budget would be the expenditure on the coronavirus vaccination programme which could provide clarity about the availability of the jabs for citizens who are not frontline workers, seniors or considered at high risk.