I n the context of the current economic environment, the Finance Minister has delivered a path-breaking Budget 2021-22. Of the various announcements made in the Budget, we would like to commend her for the decisive push towards strengthening healthcare and infrastructure.

Taking a holistic approach to health, the government has focussed on strengthening three areas - Preventive, Curative, and Wellbeing. The renewed impetus on improving the health infrastructure of the country through Atmanirbhar Swasth Bharat Yojana, nutrition schemes, clean water supply and air, and vaccines, has witnessed a significant rise in the Budget outlay from ₹94,452 crore last year to ₹2,23,846 crore this year. This will bolster the ongoing National Health Mission and enable the transformation of public healthcare, as we know it.

A welcome move

The main aim of the outlay is to develop capacities of primary, secondary and tertiary healthcare systems. Doubling of funds allocated to healthcare is not just welcome but is the need of the hour. By making healthcare as one of the key pillars of the Budget, the government has showcased its intention to build capabilities in India to become a stronger, healthier and a more resilient society.

It is now essential that India strengthens and solidifies its position as an innovation hub in healthcare. There is a need to foster a climate that encourages scientific enquiry, drug discovery and innovation of therapies.

On infrastructure, measures announced by the government for deployment of funds towards building new highways, freight corridors, and ports is commendable. We see the government’s plan for setting up a Development Finance Institution (DFI) for long-term lending as an important step in the right direction. The ambitious target of ₹5 lakh crore in the next three years will support infrastructure projects and free up the bank and NBFC capital. The DFI will be crucial to fulfill the government’s national infrastructure pipeline.

The decisions to privatise two public sector banks in addition to IDBI Bank, a general insurance company and list LIC on the bourses are bold steps towards consolidating and modernising Indian banking and insurance sectors. This privatisation drive will generate the much-needed capital for the government and also expedite long-pending reforms in the banking and insurance sectors. At a time when public sector banks are steadily losing market share to private banks, privatising the weaker PSBs could revitalise them and augment credit flow within the economy.

Some other announcements that deserve mention include the creation of an Asset Reconstruction Company (ARC) to acquire, manage and turn around bad debts of banks. This will help unlock capital and inspire investor faith for those beleaguered sectors. It is critical to speed up a resolution to the legacy issues related to bad debt and bankruptcy in the system. This will ease sectoral limits, bring down lending rates of banks and also act as a counter-balance to rising rates due to higher government borrowing. The strengthening of the NCLT framework through an e-court system and debt resolution will expedite resolution and attract investor interest. Progressive measures such as these help in fortifying the economy from future shocks.

The government’s continued focus towards Micro Small and Medium Enterprises (MSMEs) was evident in this year’s Budget. The FM’s pledge of ₹15,700 crore to support the sector, coupled with balancing custom duties to aid demand will fuel the spirit of entrepreneurs, enabling the creation of markets and jobs which form the backbone of our economy.

In our view, the Finance Minister has laid out a path not just for recovery of the economy but for a strong and secure future of the country. We will now eagerly wait for the actual implementation of these ideas.

The writer is Chairman, Piramal Group

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