New Delhi, Feb 1 (efe-epa).- India on Monday proposed to more than double its healthcare spending in its annual budget for 2021-22 with expectations to revive the economy that has been battered by the coronavirus pandemic.
In her budget speech to the country’s parliament, Finance Minister Nirmala Sitharaman proposed to remove caps on foreign investment in its insurance market and boost infrastructure outlay to get back on track the economy that suffered its worst slowdown due to the pandemic, which has claimed more than 154,000 lives in the country.
Sitharaman projected a fiscal deficit of 6.8 percent of the gross domestic product for the next financial year that begins on Apr.1 and ends on Mar. 31, 2022. She estimated that the current year could end with a deficit of 9.5 percent.
The finance minister proposed to substantially increase its spending in healthcare, whose underfunded infrastructure nearly collapses as a result of the pandemic.
“The investment on health infrastructure in this budget has increased substantially. Progressively, as institutions absorb more, we shall commit more,” the minister said.
She added that the government was taking a holistic approach to health, and was focusing on strengthening preventive, curative, and well-being areas of the health infrastructure.
Sitharaman announced that the total outlay for health, including teh country’s coronavirus vaccination drive for its 1.3 billion people was 2.23 trillion Indian rupees ($30.20 billion), which is more than 2 percent of the total GDP for the next fiscal year.
She underlined that the government was earmarking $4.81 billion for developing more Covid-19 vaccines in the country.
India is producing two vaccines at the moment. One of them the AstraZeneca/Oxford University jab that is locally manufactured at the Serum Institute of India, while the other is produced by Bharat Biotech.
Over 3.5 million people have been vaccinated so far in the first phase of the immunization drive that seeks to inoculate 30 million healthcare and other frontline workers by June this year.
With 10.7 million cases, India has the world’s second-highest number of coronavirus infections after the United States. The country currently spends about 1 percent of its GDP on health, which is among the lowest for any major economy.
The minister underlined that the pandemic’s impact on the economy has resulted in a weak revenue inflow.
“Once the health situation stabilized, and the lockdown was being slowly lifted, the government spending was ramped up so as to revive domestic demand.”
Among the main focuses of the budget were spending on infrastructure and lifting caps on foreign investment in the insurance market.
The minister also proposed to provide funds for the recapitalization of state-run banks to reactivate the economy.
“To further consolidate the financial capacity of PSBs (public sector banks), further recapitalization of 200 billion rupees is proposed.”
The minister said the government was expecting a rapid economic recovery with a growth of 11 percent in 2021-22.
To make it happen, she proposed to invest some 1.1 trillion Indian rupees ($16 billion) in roads and about 1 trillion rupees ($15 billion) for rail infrastructure.
She also revealed that the government would bring the IPO of state-run Life Insurance Corporation “for which I am bringing the requisite amendments in this session (of parliament) itself.” EFE-EPA