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HomeSouth AsiaThree features of India’s ‘pandemic budget’.

Three features of India’s ‘pandemic budget’.

India’s Finance Minister Nirmala Sitharaman presented much awaited union budget in parliament today Monday 1st February 2021.

India’s GDP had been shrunk due to Covid-19 that increased unemployment that badly effected India’s banking sector that was already in crisis.

The Finance Minister’s budget aims to spend big to push growth.

A big boost was given to healthcare and infrastructure in the Budget.

Currently India’s fiscal deficit (the gap between its revenue and expenditure) is set to rise to 9.5% for the current financial year this number is highest since India opened its markets to the world in 1991.

For the financial year 2021-22 6.8% deficit is being targeted

Here are the 3 main features from India’s ‘pandemic budget’


In this budget the health spending is up by 137%, this is seen as a massive boost to long time under-funded health sector that received only 1.3% of India’s GDP.

According to the Finance Minister the government will increase the fund if required however it was not clear if Government has plans to pay for vaccinating everyone in the country.

Over $8.5bn has been earmarked has been earmarked to upgrade healthcare infrastructure at all levels over a period of 6 years.

The India’s government has already committed $4.8bn to country’s Covid-19 vaccination programme which is said to be the largest drive in the world which will extend to more than 1.3 billion people.


A new Development Finance Institution (DFI) will be set up that will be having a starting capital of $2.7bn which will help to fund large-scale infrastructure projects.

Large scale expenditure on infrastructure will kick-start spending as well as give some relief to banks that is already suffering due to mountain of debt.

 National highway projects as well as infrastructure corridors have been cleared in in states like Kerala, Tamil Nadu, West Bengal and Assam. State elections will be held in these states very soon.

Infrastructure spending was Increased by 35%..


Nirmala Sitharaman announced $23bn disinvestment target for the current year. As the government plans to sell off some of the public sector companies like Air India and debt-laden national carrier.

Two public sector banks as ell as an Insurance company will be privatised.

Foreign investment limits in insurance companies that will allow foreign ownership and control, with safeguards.


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