Union Budget 2021 India: Even as we battle to emerge from the long shadow cast by the pandemic, this Budget was an opportunity to provide emphasis on those sectors, which are the foundation of a future-ready economy — education, health and infrastructure.
By Suneeta Reddy,
Indian Union Budget 2021-22: This Budget, the third one presented by finance minister Nirmala Sitharaman, came against the backdrop of a never-before seen economic crisis, created by a health crisis.
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Even as we battle to emerge from the long shadow cast by the pandemic, this Budget was an opportunity to provide emphasis on those sectors, which are the foundation of a future-ready economy — education, health and infrastructure. These sectors could create real depth in our economy in terms of investment multiplier effects, incremental jobs, and improvement in individual percapita income, and the budget did deliver on these fronts.
The FM announced a 137% increase in the budgetary allocation for healthcare, which is a significant step towards achieving the allocations recommended by the 15th Finance Commission. More than Rs 64,000 crore will be spent on healthcare infrastructure over the next 5 years. Most importantly, Rs 35,000 crore was allocated for the Covid-19 vaccine, which I estimate can cover over 80 crore Indians at currently known costs. As a member of the sector, I welcome these allocations and the initiatives announced by the FM for health, and commit that the private healthcare sector will be a strong partner of the government in building world-class health infrastructure and delivering high-quality outcomes.
Infrastructure also got significant focus in the budget. The coverage was broad-based, across road, rail, shipping, power and more. The government is looking at a lending portfolio of more than Rs 5,00,000 crore in 3 years, which will mean rapid expansion in infrastructure projects. Education and skilling also got due emphasis, with allocation for schools, and for broad-basing of skilling programmes.
The Budget, in my eyes, is a signal that the government has begun the journey towards building a resilient and diversified economy.
As we move ahead, on the lines of the production-linked incentive for manufacturing, an investment-linked incentive for private investment in these core sectors will help. We can strongly incentivise private investment in the greater good, and strengthen focus on sectors which are “must-have”, rather than “nice-to-have”. Also, specific incentives to nurture and shape the healthcare sector in the next decade will be welcome. Healthcare is an important component of the services sector, which contributes 55% to GDP.
Also, while InvITs / REITs are good, alternate structures, for bringing in long-term capital into the country, we look forward to further reforms in this space which will support their extensive us. For instance, in healthcare, GST on rent is a deterrent for using these structures effectively.
Private healthcare also needs support to remain an attractive destination for foreign direct investment. While these will stay on our wish-list, we believe that digital health, innovation and FDI will help in moving from the incremental growth in healthcare to creating the next dimension of healthcare that will move closer to our citizens, with a focus on well-being and building a healthy India for the next generation.
The author is managing director, Apollo Hospitals Group