The central government's yearly Budget for every year is impactful for two reasons - it clearly shows where the government is going to spend its vast financial resources and it gives an idea of the government's intended legislative framework in the upcoming sessions. Precisely, these two reasons make the central government's budget the single most important economic event in the country.
Some key figures related to the Union Budget 2021-22 (along with corresponding figures for the previous year*):
Some of the major Budget announcements which are expected to have an immense impact on the broader economy are as follows:
- Jal Jeevan Mission, an initiative aimed at providing universal water supply to all local bodies, is to be implemented with an outlay of Rs 2.87 lakh crore. Another Rs 1.4 lakh crore has been allotted for waste management (both for a duration of over five years).
- Rs 35,000 crore has been allotted for COVID vaccination.
- Rs 20,000 crore has been allotted to set up a development financial institution for financing long-term infrastructure.
- Foreign investors have been allowed to invest in debts issued by REITs and InvITs.
- Indirect disinvestment through the direct sale of operational assets, such as highways, electricity transmission lines, airports, railways infrastructure, etc., and surplus lands through the SPV route
- Incentives for state governments to reduce stakes in their PSUs
- Direct disinvestment in three banks, one insurance company and a slew of other companies
- Only four areas have been declared as strategic sectors. All PSUs in the non-strategic sector to be privatised completely.
- Social security benefits to be extended to gig and platform workers.
- FDI limit in insurance to be increased from 49 per cent to 74 per cent.
- PSU banks to be recapitalised by Rs 20,000 crore.
- The target of reducing the fiscal deficit to below 4.5 per cent of GDP has been postponed to 2025-26.