Finance Minister Nirmala Sitharaman said that the key principles adopted by the government for Budget 2021 were transparency and tax stability. The Finance Minister, while addressing top officials at a virtual interaction with industry body – Confederation of Indian Industry (CII), stated that contrary to the expectations of a COVID-19 tax, the government chose to fund the budget stimulus through higher borrowing, rather than increased taxes. Budget 2021 provides for higher capital expenditure by the government, but also seeks private sector participation, which has a significant role to play in growth recovery. (Also Read: Budget: Focus On Health, Farmers, Polls; Relief For Seniors Above 75 )
The Finance Minister explained that though the government will provide some capital for the proposed Development Finance Institution (DFI), the DFI will also raise capital from the market. Additionally, the DFI Bill will provide legislative space for the private DFIs. Similarly, the Asset Reconstruction Company (ARC) for the management of non-performing assets (NPAs) will be floated as a holding company by the banks themselves, with support from the government.
While addressing the virtual conference, the Finance Minister explained that the government has laid more stress on areas with high multipliers such as infrastructure which would facilitate the private sector, such as power, roads, ports, airports, etc. The healthcare and agriculture sectors were among the other top priorities for Budget 2021.
Finance Minister Nirmala Sitharaman presented Budget 2021 in the Lok Sabha on February 1, which aimed at reviving the economy struggling against the COVID-19 crisis. As part of Budget 2021, the Finance Minister announced that the country’s healthcare spending would be doubled to ₹ 2,23,846 crore and added that Rs 35,000 crore would be spent on COVID-19 vaccines. The capital expenditure will be increased to ₹ 5.54 lakh crore, which is around 34 per cent higher than last year.
Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das today presented the bi-monthly Monetary Policy Committee (MPC) review and announced that the central bank has ket the repo rates as well as the reverse report rates unchanged at four per cent and 3.35 per cent, respectively. The MPC decision was taken unanimously by all six remembers of the committee. The central bank also projected a 10.5 per cent economic growth for the next fiscal year, starting April 2021, lower than the projections by the Economic Survey 2021 and the International Monetary Fund (IMF).