New Delhi (Reuters): Indian Finance Minister Nirmala Sitharaman on Monday unveiled the budget for fiscal 2021-22, that aims to shore up an economy badly-hit by the novel coronavirus pandemic.

The economy is projected to contract 7.7% in the current fiscal year, although the government forecasts growth of 11% for the coming fiscal year, after a massive COVID-19 vaccination drive and a rebound in consumer demand and investments.

These are the initial highlights from Sitharaman’s fiscal 2021-22 budget speech:

DEFICIT

• 2020/21 fiscal deficit seen at 9.5% of GDP
• 2021/22 fiscal deficit seen at 6.8% of GDP
• 2025/26 fiscal deficit target set at 4.5% of GDP

EXPENDITURE

• 2020/21 revised expenditure 4.39 trillion rupees ($60.14 billion)
• 2020/21 capital expenditure estimated at 5.54 trillion rupees ($75.90 billion)
• 2021/22 gross expenditure seen at 34.83 trillion rupees ($477.16 billion) in 2021/22
• To provide more than 2 trillion rupees ($27.40 billion)for states and autonomous bodies

BORROWING

• India says will need 800 billion rupees ($10.96 billion) in next two months from bond market
• 2021/22 gross market borrowing seen at 12 trillion rupees ($164.40 billion)

HEALTHCARE

• India to allocate 2.2 trillion rupees ($30.20 billion) for healthcare in 2021/22
• Sitharaman says expect two or more COVID-19 vaccines soon
• India to launch new federal health scheme with outlay of around 641 billion rupees ($8.80 billion) over the next six years
• To allocate 350 billion rupees ($4.81 billion) for COVID-19 vaccines, and allocate more funds if needed.

FINANCE

• India to introduce bill for development financial institution with capital of 200 billion rupees ($2.74 billion)
• To infuse 200 billion rupees ($2.74 billion) for recapitalization of state-run banks in FY2022
• India to consolidate certain SEBI regulations for Securities Market Code
• To relax FDI cap for insurance sector to 74% from 49%
• Set up asset reconstruction company to take over toxic assets
• To cut money market requirement to 15% from 25%
• To allocate 15 billion rupees ($205.50 million) for scheme to incentivise use of digital payments
• India to incentivise incorporation of one-person companies

TAXATION

• Proposes exemption to senior citizens for filing income tax returns
• Proposes changes in personal income taxes for non-resident Indian
• To set up dispute resolution panel for small taxpayers
• India sets 2021/22 divestment target at 1.75 trillion rupees ($23.97 billion)
• India to divest two public sector banks and one general insurance company
• India to launch IPO of Life Insurance Corporation
• India to announce policy for privatisation of state-run companies
• To create new list of companies for divestment
• India to introduce new mechanism for privatisation of loss-running state-run companies
• To monetise surplus lands of public sector entities

INFRASTRUCTURE

• To allocate 2.87 trillion rupees ($39.40 billion) for clean water supplies over the next five years
• To allocate 3 trillion rupees ($41.10 billion) for power sector for next five years
• To provide 10 billion rupees ($137.01 million)to Solar Energy Corporation of India
• Sitharaman says will move to end power distribution company monopolies
• To double ship recycling capacity by 2024
• India to monetise infrastructure assets

TRANSPORT

• Allocates 1.18 trillion rupees ($16.17 billion) for ministry of roads and highways
• Allocates 1.1 trillion rupees ($15.07 billion) for railways
• Railways to monetise freight corridors
• India to launch new vehicle scrapping policyProposes tax holiday for aircraft leasing firms in India

AGRICULTURE

• India allocates an estimated 1.7 trillion rupees ($23.29 billion) for paddy procurement
• Hikes enhanced agriculture credit target to 16.5 trillion indian rupees ($226.05 billion) in 2020/21
• To include loans for activities in allied sectors in agriculture
• To discontinue small savings fund loans to Food Corporation of India

LABOUR

To launch database for gig economy, building and construction workers

• Social security benefits to be extended to gig economy workers
• ($1 = 72.9940 Indian rupees)