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Economist at UOB Group Barnabas Gan evaluates the recently announced 2021/22 Union Budget.

Key Quotes

“India announced its Union Budget 2021/22 on 1 Feb 2021. In the speech by Finance Minister Nirmala Sitharaman, the Budget aims to provide opportunities for India economy to see sustainable growth. The Budget is expansionary with a fiscal deficit for FY2021/22 pencilled at INR15.1 trillion (6.8% of GDP; USD206 billion), down from a deficit of INR18.5 trillion (9.5% of GDP; USD252 billion).”

“The Budget highlights six pillars that are important for India’s economic growth and social resilience. They include (1) Health and Wellbeing, (2) Physical & Financial Capital and Infrastructure (3) Inclusive Development for Aspirational India, (4) Reinvigorating Human Capital, (5) Innovation and R&D and (6) Minimum Government, Maximum Governance.”

“The Budget also reflects the firm commitment of the Government to boost economic growth by investing in infrastructure development. This is echoed by the increase in capital expenditure by INR1.4 trillion (+34.5% y/y) over FY2020/21. However, revenue receipts are expected to remain subdued at INR17.9 trillion, below FY2020/21 initial estimates of INR20.2 trillion.”