Budget Analysis

BUDGET 2021-22


  • Healthcare infrastructure budget increased to Rs 2,23,846 crore in BE 2021-22 opposed to BE of Rs 94,452 crore for 2020-2021 resultant increase of 137%;
  • PM AatmaNirbhar Swasth Bharat Yojana launched for Rs 64,180 crore over 6 years, supporting 17,788 rural and 11,024 urban, Health and Wellness Centers;
  • Critical care hospital blocks in 602 districts and 12 central institutions;
  • National Centre for Disease Control proposed to be strengthened in 5 regional branches and 20 metropolitan health surveillance units;
  • Expansions of integrated health information portal to all States/UTs to connect all public health labs;
  • Operationalisation of 17 new strengthening of 33 existing public health units at 32 airports, 11 seaports and 7 land crossings
  • Setting up of 15 health emergency operation centers and 2 mobile hospitals
  • Rollout of Rs 35,000 crore for COVID-19 vaccine


  • Developing primary, secondary and tertiary healthcare systems inclusive of national institutions for a period of 6 years to be used for treatment and detection of emerging diseases in order to strengthen the well being of the population.


  • With liberalization of the Insurance sector some incentives and schemes could have been driven to corporatizing benefits to masses through medical insurance.
  • Mandatory schemes to be subscribed by employers for employee benefits.


  • Enhancement of agricultural credit target to Rs 16.5 lakh crore in FY22
  • Increase in Rural Infrastructure Development Fund from 30,000 crore to Rs 40,000 crore
  • Micro Irrigation Fund with initial fund of Rs5,000 crore has now been doubled under NABARD
  • Operation Green Scheme launched to boost value addition in agriculture and allied products and their exports
  • 1,000 more mandis shall be integrated with e-NAM in order to increase transparency and competitiveness.


  • Increase in payment to farmers, substantially
  • MSP regime to stay at least 1.5 times the cost of production across all commodities.
  • Supports the controversial farm laws.


  • Agriculture being infrastructure heavy, some allocation from Infrastructure thrust can be offered for schemes in Agriculture infrastructure and allied services.

Production Linked Incentive Scheme

  • Government has committed nearly Rs1.97 lakh crore in the next 5 years starting FY 2021-22 towards AatmaNirbhar Bharat-PLI scheme
  • Rs 40,951 crore announced for PLI for electronic manufacturing schemes.

Objective :

To attract global manufacturers, aligned to GoI’s plug and play infrastructural support for companies seeking India.


  • This could have been best supplemented with manufacturing initiatives/ schemes in EVs, quick and immediate employment.


  • Establishment of 7 textile parks over the period of 3 years.
  • Launch of Mega Investment Textiles Parks scheme


  • To make the textile industry globally competitive,
  • Attract large investments
  • Boost employment generation.


  • Capital intensive exercise, spread on a long term without immediate return, low skill tasks not FIs focused;
  • It’s supply heavy activity without confirmation of demand side;
  • A more efficient and quick steer would have been towards infra related projects and  agriculture and allied services.

Rail Infrastructure

  • Introduction of aesthetically designed Vista Dome LHB coach on tourist routes to give a better travel experience to passengers;
  • Allocation of Rs 1,10,055 crore of which 1,07,100 crore allotted for capital expenditure;
  • Introduction of automatic train protection system that eliminates train collision due to human error.


  • To bring down logistic costs for the railway industry
  • Improve and enhance passenger safety and travel experience especially of migrants who were hit immensely during the lockdown


  • The Vista Dome LHB coach tourist initiative is ill timed, while being capital heavy;
  • This could be steered into opening IT enabled logistics and transportation partnerships with, technology based tracking and movements.

Power Infrastructure

  • Power distribution sector scheme with an outlay of Rs 3,05,984 crore over 5 years.
  • Improve on the reforms already made in the last 6 years with addition of 139 Giga Watts of installed capacity connecting more 2.8 crore household and addition of 1.41 lakh circuit km of transmission lines.
  • Give consumers alternatives to choose from more than one power distribution company.


  • End monopoly DISCOMS in the power sector and offer choice to the consumer
  • Improve various financial structures in relation to power including prepaid smart metering, feeder separation and upgradation of systems

Ports, Shipping and Waterways

  • Transition from self operational services to private partner model for all major ports of the country
  • Allocation of Rs 2,000 crore for all major ports on Public Private Partnership mode
  • Promotion of merchant ships through subsidy support to Indian shipping companies in global tenders floated by Ministries and CPSEs
  • Allocation of Rs 1624 for a period of 5 years for the promotional purpose


  • To provide greater training facilities
  • Enhance employment rates for Indian seafarers
  • Enhance Indian companies share in global shipping

Securities Market Code

  • Consolidation of provisions of SEBI ACT,1992, Depositories Act, 1996, Securities Contract Regulations Act, 1956 and Government Securities Act, 2007 into one single Securities Market Code.
  • Development of FINTECH Hubs at GIFT-IFSC.

This will support operations of capital markets, facilitate legal interpretations, aid in ease of business.


  • FDI limit in insurance hiked from 49% to 74%
  • Majority of Directors on the Board and key management person shall be Indian residents  with at least 50% of directors being independent directors and specified percentage of profits being retained as general reserve


  • Increase in capital inflow in insurance companies considering the sector is still underdeveloped
  • Enhance expansions and growth of insurance companies in the country.

Some schemes and incentives steering this to medical insurance making it mandatory for employers to offer the benefit to employees.

There will have to be some creative ways of motivating subscription of insurance policies.


  • Unfit private vehicles beyond 20 years shall be scrapped on a voluntary basis
  • Commercial vehicles older than 15 years shall undergo fitness test


  • Boost in automobile sector for both commercial and private vehicles
  • Automobiles shares surged after the announcement.

Specific schemes for EVs could have benefitted the economy, start up community.

Migrant Workers and Labourers

  • Launch of One Nation One Ration Card scheme across 32 states and UTs reaching 69 crore beneficiaries leading to a total of 86% beneficiaries covered.
  • Remaining 4 states and UTs shall be integrated in the coming months
  • Proposal to conclude and implement the four labour codes


  • Social security benefits extended to gig workers and platform workers
  • Women will be allowed to work in all categories and also in the night shifts with adequate protection
  • Compliance burden on employers will be reduced with single registration and licensing
  • Benefits of online returns

Scheduled Castes and Scheduled Tribes Welfare

  • 750 Eklavya model residential schools in tribal areas with increase in unit cost of each school from Rs 20 crore to Rs 38 crore
  • Central assistance enhanced to Rs 35,219 crore for 6 years to benefit 4 crore SC Students
  • Reduce margin money requirement from 25% to 15% and to include loans for activities allied to agriculture.

Disinvestment and Strategic Sale

Strategic disinvestment remain on cards. BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam limited among others would be completed in 2021-22. Other than IDBI Bank, Government proposes to take up the privatization of two Public Sector Banks and one General Insurance company in the year 2021-22.

In 2021-22, Government would also bring the IPO of LIC for which the requisite amendments will be made in this Session itself.

In a very important announcement, the Finance Minister said that in the AtmaNirbhar Package, she had announced to come out with a policy of strategic disinvestment of public sector enterprises and said that the Government approves it. The policy provides a clear roadmap for disinvestment in all non-strategic and strategic sectors. Government has kept four areas that are strategic where bare minimum CPSEs will be maintained and rest privatized. In the non-strategic sectors, CPSEs will be privatised, otherwise shall be closed. She said that to fast forward the disinvestment policy, NITI Aayog will work out on the next list of Central Public Sector companies that would be taken up for strategic disinvestment. Government has estimated Rs. 1,75,000 crore as receipts from disinvestment in BE 2020-21

Fiscal Deficit

India’s fiscal deficit is set to jump to 9.5 % of GDP in 2020-21. Higher than 3.5% of GDP that was projected in the budget estimates.

The government plans to borrow another Rs 80,000 crore to fund the deficit this year. Gross market borrowings for next year has been pegged at Rs 12 lakh crore. A new roadmap for fiscal consolidation has been announced in the budget.

Pension Scheme

The government has given relief measures for senior citizens by removing the need to file income tax returns for those aged over 75 years.

It has also announced a halving of the time frame for reopening of income-tax assessment cases from 6 years to 3 years. For reopening of serious tax evasion cases up to 10 years, the government has put in a monetary limit of cases involving over Rs 50 lakh in a year.

This is expected to reduce instances of tax harassment of income taxpayers.

Research support – Aman Ahmed

This budget analysis is only for information purposes. Nothing contained herein is, purports to be, or is intended as legal advice and you should seek legal advice before you act on any information or view expressed herein. Endeavoured to accurately reflect the subject matter of this alert, without any representation or warranty, express or implied, in any manner whatsoever in connection with the contents of this. This isn’t an attempt to solicit business in any manner. The views are personal.

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