Indian FM presents digital Budget for 2021/22 | Daily News

Indian FM presents digital Budget for 2021/22

Indian Finance Minister Nirmala Sitharaman presented the first digital Budget on February 1. The budget for the Fiscal Year 2021/22 coincides with India’s V-shaped economic recovery overcoming the hurdles posed by COVID-19.

India is slated to be the fastest-growing economy in the next two years with its real GDP estimated to attain a new record of 11.5% growth in the Fiscal Year 2021/22 and 6.8% in the Fiscal Year 2022/23. India has also set a USD 5 trillion target for its economy in the Fiscal Year 2024/25. With a strong rebound expected in the second half of the Fiscal Year 2020/21(October 2020 to March 2021), the Indian economy is well on course towards realising these figures.

Strong performance of the economy translated into increased attractiveness among investors. FPI inflows reached an all-time monthly high of USD 9.8 billion in November, 2020. Forex reserves also stood at a record high of USD 586 billion, which is sufficient to cover India’s import bill for 18 months. Performance of stock market indices have been robust and capitalisation to GDP ratio crossed 100% after more than 10 years.

India’s sterling bounce back is attributable to the Government's disciplined and mature policy response to COVID which was guided by four principles: strategy of containment, fiscal, financial, and long-term structural reforms. These were coupled with other measures such as cushioning vulnerable sections of the society during lockdown and boosting consumption and investment while unlocking.

Total outlay for the Fiscal Year 2021/22 Budget is close to USD 500 billion. India’s agricultural sector, which witnessed 3.4% growth in agriculture during the first half of Fiscal Year 2020/21, contrary to the global economic downturn, got a big boost in the budget. Agriculture credit target has been increased to USD 226 billion and various farmer friendly initiatives are being envisaged, in continuation of the progressive reforms that have already been carried out.

These steps are aligned with the goal of doubling farmer’s income by 2022. The Budget gave further impetus to foreign investment by introducing several investor friendly measures such as increasing the FDI cap in the insurance sector from 49% to 74%.

Finance Minister outlined the vision for a self-reliant India (AatmaNirbhar Bharat) in the budget. This blueprint consists of various elements such as strengthening infrastructure, providing opportunities for youth, offering education for all, empowering women among others.

The Budget stood on six key pillars namely health and well-being; physical and financial capital, and infrastructure; inclusive development; reinvigoration of human capital; innovation and R&D; and minimum Government and maximum Governance.

Under these, manufacturing has been further incentivised, and startups are being given focused attention. Ambitious targets have also been set in the field of space expeditions.