Union Budget Explained 2021-2022.

The Story

Healthcare was going to be the centre of attention. Everybody knew that. So when the government introduced a new centrally sponsored scheme, with plans to develop capacities of primary, secondary, and tertiary health care in India, it was reason to celebrate. In fact, the government promised to spend ~₹65,000 crores over the next six years in a bid to kickstart this program. And, they topped it by suggesting that they plan to spend 137% more in the next financial year on health care programs.

To put that into context. The government is expected to spend ~₹94,000 crores this financial year. The year after, they are planning to spend ~₹2,23,000 crores. And that is a lot of money. But as this report from ORF notes, it might not be all that spectacular. The basic contention is this. Yes, the government is allocating more money to the healthcare sector next year. But a good part of it is being apportioned to water and sanitation programs. Which by the way is an admirable goal in itself. However, considering there is a pandemic at large, perhaps we could have done more on the health care front. As it stands, the central government will reserve ~₹35,000 crores for vaccinations and the Finance Commission will grant another ~₹13,000 crores to states in a bid to help them invest in the health care sector. But outside of these special allocations, there isn’t a massive increase here.

Infrastructure

Infrastructure, on the other hand, is poised to receive a substantial boost. Perhaps the most notable announcement was regarding the creation of a DFI — Development Financing Institution. Think of it this way. The government wants to create jobs and it wants to do it in a way that’s sustainable. One possible solution is to incentivize the private sector. Because when they invest in creating large infrastructure projects, it has a ripple effect on the economy. It creates new jobs. It creates productive assets. It creates value in the long run. However, these private entities won’t invest if they are strapped for cash. So in a bid to free them from such banal constraints, the government will set up a new financing institution that will lend long term loans at quite reasonable interest rates (hopefully). Also, the government has promised to set aside ₹20,