Expert Views: India unveils budget in wake of COVID-19 slump, proposes doubling healthcare spending

(Reuters) – Unveiling an annual budget on Monday aimed at reviving an economy that plunged into deepest recorded slump amid the COVID-19 pandemic, Finance Minister Nirmala Sitharaman proposed doubling healthcare spending to 2.2 trillion Indian rupees ($30.20 billion).

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The government will launch a new federal health scheme with an outlay of around 641 billion Indian rupees ($8.80 billion) over the next six years, she told parliament kicking off her budget speech.

India, which has the world’s second highest coronavirus caseload after the United States, and currently spends about 1% of gross domestic product on health, among the lowest for any major economy.

Here are some reactions from Indian businesses, economists and analysts:

RAJOSIK BANERJEE, PARTNER AND HEAD, FINANCIAL RISK MANAGEMENT, KPMG, MUMBAI

“To address concerns around asset quality, credit loss and liquidity stress, this budget has been proactive to infuse additional capital of 200 billion rupees to PSU banks for providing continued credit access to wholesale and retail borrowers, and therefore push growth agenda.”

RUPA REGE NITSURE, GROUP CHIEF ECONOMIST, L&T FINANCIAL HOLDINGS, MUMBAI

“A strong capex push of 5.54 trillion rupees ($75.76 billion) is growth positive. This, combined with the enhanced spending on the health sector, will go a long way in supporting economic recovery. However, the actual revenue generation, both via tax and non-tax receipts during FY22 will be instrumental in the management of fiscal situation.”

SUJAN HAJRA, CHIEF ECONOMIST, ANAND RATHI SECURITIES, MUMBAI

“The indications are that the government is going to do more to promote growth rather than maintaining fiscal discipline. This is a welcome move as it will have a positive impact on growth. Also, we are seeing a lot of measures on conditions of doing business which was required. The intent for reforms is also strong.”

($1 = 73.1290 Indian rupees)

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