Budget 2021 Highlights: Top 10 Takeaways

In a two-hour long (or short) speech, Finance Minister Nirmala Sitharaman announced a higher capital expenditure for this fiscal and next, focused on infrastructure building. As expected, the health sector also received additional money. She surprised bond markets with a fiscal deficit number of 9.5% for FY21 and a very long, slow glide path towards lowering it.

The 10-year yield spiked to above 6% from a pre-speech 5.89%. But the biggest reaction came in from the equity markets, after the speech was over. A 3.5% rally on the Sensex, Nifty 50 and 6% jump in Nifty Bank. Maybe, Dalal Street is cheering lack of negative surprises from the finance minister.

Top 10 Budget Highlights

1. Equity markets rally 3.5% on budget speech with no negatives.

2. Long, slow fiscal glide path: deficit to reduce from 9.5% in FY21 to 4.5% by FY26

3. 137% increase in health spend.

4. Big infra push via 34.5% higher capital budget at Rs 5.54 lakh crore; infra monetisation via InVITs.

5. Gross expenditure up 13% at Rs 35 lakh crore for FY21; same expenditure number for FY22.

6. DFI @ Rs 20,000 crore capitalisation + Bad Bank (no amount provided yet) + PSU bank recap @ Rs 20,000 crore.

7. Divestment target at Rs 1.75 lakh crore: 2 PSU banks + one general insurance company + LIC IPO + Air India + BPCL + SPV for PSU land sale.

8. 7 mega textile parks to be set up over three years; FDI in insurance raised from 49% to 74%.

9. Yet another power discom rescue scheme @ Rs 3 lakh crore over five years.

10. Proposal to consolidate SEBI Act, Depositories Act, SCRA Act, Government Securities Act into one.