Budget 2021 Highlights: Top 10 Takeaways
Nirmala Sitharaman, India’s finance minister, center, Anurag Thakur, India’s finance and corporate affairs minister, left, and other members of the finance ministry leave the North Block on Monday, Feb. 1, 2021. (Photographer: T. Narayan/Bloomberg)

Budget 2021 Highlights: Top 10 Takeaways

In a two-hour long (or short) speech, Finance Minister Nirmala Sitharaman announced a higher capital expenditure for this fiscal and next, focused on infrastructure building. As expected, the health sector also received additional money. She surprised bond markets with a fiscal deficit number of 9.5% for FY21 and a very long, slow glide path towards lowering it.

The 10-year yield spiked to above 6% from a pre-speech 5.89%. But the biggest reaction came in from the equity markets, after the speech was over. A 3.5% rally on the Sensex, Nifty 50 and 6% jump in Nifty Bank. Maybe, Dalal Street is cheering lack of negative surprises from the finance minister.

Top 10 Budget Highlights

  1. Equity markets rally 3.5% on budget speech with no negatives.
  2. Long, slow fiscal glide path: deficit to reduce from 9.5% in FY21 to 4.5% by FY26
  3. 137% increase in health spend.
  4. Big infra push via 34.5% higher capital budget at Rs 5.54 lakh crore; infra monetisation via InVITs.
  5. Gross expenditure up 13% at Rs 35 lakh crore for FY21; same expenditure number for FY22.
  6. DFI @ Rs 20,000 crore capitalisation + Bad Bank (no amount provided yet) + PSU bank recap @ Rs 20,000 crore.
  7. Divestment target at Rs 1.75 lakh crore: 2 PSU banks + one general insurance company + LIC IPO + Air India + BPCL + SPV for PSU land sale.
  8. 7 mega textile parks to be set up over three years; FDI in insurance raised from 49% to 74%.
  9. Yet another power discom rescue scheme @ Rs 3 lakh crore over five years.
  10. Proposal to consolidate SEBI Act, Depositories Act, SCRA Act, Government Securities Act into one.

Watch | Key takeaways from Budget 2021 with Ira Dugal.

Follow real-time analysis from BQ’s top editors Menaka Doshi, Ira Dugal, Sajeet Manghat and Niraj Shah here.

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