[Exclusive] Budget 2021 to prioritise infrastructure, healthcare

[Exclusive] Budget 2021 to prioritise infrastructure, healthcare  |  Photo Credit: IANS

New Delhi: The Modi government's next union budget is set to focus on infrastructure thrust in a bid to accelerate the economy and higher healthcare spends to fight covid-19. ET Now learns that the Finance Ministry may loosen its purse strings by as much 20% for infrastructure and 50% for healthcare to fight the aftermath of the coronavirus, a government source said. 

“Funds won’t be a constraint for infrastructure and healthcare. We will look to significantly spend in these areas to spur economic activity and provide for a vaccine”, the source added. 

The Finance ministry has kickstarted the budget-making process and will soon invite stakeholder consultation as well. ET Now learns that the Modi government’s infrastructure commitment will be sustained for the next two years keeping in mind the upcoming G20 meet in 2022 that India will host and the 75th year of independence. 

The Finance ministry has already identified Rs 1.5 lakh crore National Infrastructure Pipeline. We are regularly monitoring the projects and are asking states, infrastructure ministries to now open up tenders after the covid-19 related pause, the source added. 

Sources suggest that new projects for rail, road, housing, shipping, port, airports have been identified as a part of the Infrastructure Pipeline and states like Andhra Pradesh, Maharashtra, Gujarat, Tamil Nadu, UP have been asked to expedite work. The Finance Ministry is also monitoring the Capex of CPSEs as well. 

The government budgeted for Rs 1.70 lakh crore for transport infrastructure in Budget 2020-21. 

“We have an ambitious plan to invest 1.5 trillion dollars under the National Infrastructure Pipeline. A pioneering multi-modal connectivity infrastructure master plan is being finalized. India has embarked on a massive infrastructure building spree of highways, railways, metros, water-ways, airports across the country. We are building millions of affordable houses for the Neo-middle class. We want investments not just in big cities but smaller cities and towns too,” the prime minister Narendra Modi said speaking to global fund managers last week. 

Besides Infrastructure, the upcoming budget may also double the health sector outlay with funds being earmarked for vaccine procurement, ramping up healthcare facilities, wellness centres. The move may be in line with the 15th Finance Commission also pitching for grants to enhance per capita spending on healthcare in its report. In 2020-21, India’s Healthcare Outlay stood at Rs 69,000 cr

India’s economy contracted by 23.9% in Q1 after the covid-19 induced lockdown. The Modi government’s Atmanirbhar Bharat package and demand-related measures have provided support for the poor in terms of free food, cash transfers, MSMEs yet the Finance ministry expects the year to end only with a near-zero GDP this year.