Indian Finance Minister Nirmala Sitharaman on Monday unveiled the budget for fiscal 2021-22, which aims to shore up an economy badly-hit by the novel coronavirus pandemic.
The economy is projected to contract 7.7% in the current fiscal year, although the government forecasts growth of 11% for the coming fiscal year, after a massive COVID-19 vaccination drive and a rebound in consumer demand and investments.

These are the initial highlights from Sitharaman’s fiscal 2021-22 budget speech:
Deficit
- 2020/21 fiscal deficit seen at 9.5% of GDP
- 2021/22 fiscal deficit seen at 6.8% of GDP
- 2025/26 fiscal deficit target set at 4.5% of GDP
Expenditure
- 2020/21 revised expenditure 4.39 trillion rupees
- 2020/21 capital expenditure estimated at 5.54 trillion rupees
- 2021/22 gross expenditure seen at 34.83 trillion rupees in 2021/22
- To provide more than 2 trillion rupees for states and autonomous bodies
Borrowing
- India says will need 800 billion rupees in the next two months from the bond market
- 2021/22 gross market borrowing seen at 12 trillion rupees
Healthcare
- India to allocate 2.2 trillion rupees for healthcare in 2021/22
- Sitharaman says to expect two or more COVID-19 vaccines soon
- India to launch a new federal health scheme with an outlay of around 641 billion rupees over the next six years
- To allocate 350 billion rupees for COVID-19 vaccines, and allocate more funds if needed
Finance
- India to introduce a bill for development financial institution with a capital of 200 billion rupees
- To infuse 200 billion rupees for the recapitalization of state-run banks in FY2022
- India to consolidate certain SEBI regulations for Securities Market Code
- To relax the FDI cap for the insurance sector to 74% from 49%
- Set up asset reconstruction company to take over toxic assets
- To cut money market requirement to 15% from 25%
- To allocate 15 billion rupees for a scheme to incentivize the use of digital payments
- India to incentivize incorporation of one-person companies

Taxation
- Proposes exemption to senior citizens for filing income tax returns
- Proposes changes in personal income taxes for non-resident Indian
- To set up a dispute resolution panel for small taxpayers
Divestment
- India sets 2021/22 divestment target at 1.75 trillion rupees
- India to divest two public sector banks and one general insurance company
- India to launch IPO of Life Insurance Corporation
- India to announce a policy for the privatization of state-run companies
- To create a new list of companies for divestment
- India to introduce a new mechanism for the privatization of loss-running state-run companies
- To monetize surplus lands of public sector entities
Infrastructure
- To allocate 2.87 trillion rupees for clean water supplies over the next five years
- To allocate 3 trillion rupees for power sector for next five years
- To provide 10 billion rupees to Solar Energy Corporation of India
- Sitharaman says will move to end power distribution company monopolies
- To double ship recycling capacity by 2024
- India to monetize infrastructure assets
Transport
- Allocates 1.18 trillion rupees for the ministry of roads and highways
- Allocates 1.1 trillion rupees for railways
- Railways to monetize freight corridors
- India to launch new vehicle scrapping policy
- Proposes tax holiday for aircraft leasing firms in India
Agriculture
- India allocates an estimated 1.7 trillion rupees for paddy procurement
- Hikes enhanced agriculture credit target to 16.5 trillion Indian rupees in 2020/21
- To include loans for activities in allied sectors in agriculture
- To discontinue small savings fund loans to Food Corporation of India
Labour
- To launch database for the gig economy, building, and construction workers
- Social security benefits to be extended to gig economy workers