Finance Minister Nirmala Sitharaman on Friday said transparency and tax stability were the key guiding principle of Budget 2021-22. Contrary to the expectations of a COVID-19 tax, the government has chosen to fund the budget stimulus through higher borrowing rather than increased taxes, she said while addressing members of industry chamber CII.
While the Union Budget 2021-22 provides for enhanced capital expenditure by the government, it also envisages private sector participation in a big way, the finance ministry said in a statement quoting the minister. On the Budget announcement of setting up a Development Finance Institution (DFI), Sitharaman said the government will provide some capital and will also raise funds from the market.
In addition, the DFI Bill will provide legislative space for private DFIs. The government proposes to set up a Rs 20,000 crore DFI with a view to mobilise Rs 111 lakh crore required for funding of the ambitious National Infrastructure Pipeline (NIP).
NIP, a first-of-its-kind initiative to provide world-class infrastructure across the country and improve the quality of life for all citizens, will be crucial for attaining the target of becoming a USD 5 trillion economy by FY 2025. Similarly, she said, the Asset Reconstruction Company (ARC) for the management of non-performing assets (NPAs) will be floated as a holding company by the banks themselves, with support from the government.
Elaborating on the thrust areas, the finance minister said the focus has been on segments with high multipliers, such as infrastructure like power, roads, ports and airports which would facilitate the private sector. Healthcare and agriculture have been the other priorities. The finance minister also promised a 'honest leakage-free implementation' of the Budget proposals.