Hello Readers! 

The year 2020 is about to end and soon we will enter the year 2021, with new hopes, new wishes and new goals to be accomplished. The year 2020, proved to be a tragic year for the whole world, due to the COVID-19 Pandemic spread.

With the world’s second-highest cases, despite a complete lockdown for around 4-5 months early on in the pandemic, the economy of India was hit badly. India's economy is expected to contract nearly 10% in the 2020/21 financial year.

Well, our honorable Finance Minister, Smt. Nirmala Sitharaman, told the Reuters Global Investment Outlook Summit, 2021, that “India's economy will return to growth in 2021/22 and higher spending in the budget due in February will lay the foundations for even stronger growth in the next four to five years”.

This statement of the finance minister clearly shows that the coming Union Budget 2021, is going to be a booster for India’s economy. The finance minister further adds that year 2021-22 will be a very big, good traction year for achieving a really good rate of growth that itself is going to be a launching pad for 4-5 years of growing at a good speed.

It is to be kept in mind that in the Union Budget 2021, the Corona vaccine will have an important place and a good spend. It is been predicted that The Union Budget 2020-21 is likely to make a one-time provision for the procurement, storage, transportation, and distribution of COVID-19 vaccines, and filling certain gaps in India’s public healthcare system which the pandemic has exposed.

As per the sources, the Union Budget 2021, could provision around Rs 80,000 crore for CORONA Vaccine. This fund will be just from the center, with states and the private sector also budgeting their own expenditure as India prepares for a vaccination drive that could be the largest in the world.

In the context of this provision of funds for Coronavirus vaccine, the source said that “While the private sector has a big role to play, and India’s pharmaceutical manufacturing capacity is second to none, the central and state governments will do the heavy lifting procurement onwards. We have to prepare a mechanism to ensure last-mile delivery of the vaccines”.

The leading developers of corona vaccine- Pfizer Inc, AstraZeneca, and Bharat Biotech have already applied the emergency authorization in India.

The central government has asked the state government to identify those who are at a high risk of getting infected, these persons will be vaccinated on a priority basis. The person who is likely to be on this priority list will be frontline healthcare and essential workers, and elderly people.

Expenditure To Be Increased For Public Healthcare!  

On the recommendations of the 15^th Finance Commission (15th FC), India’s combined public health expenditure might be increased to 2.5 percent of gross domestic product by 2023-24. As a percentage of GDP, this is nearly double of 1.26 percent health outlay by central and state governments in 2019-20, as per an assessment by Niti Aayog.

India ranks 184th out of 191 nations in terms of healthcare spending as a percentage of GDP, as per the World Health Organization. That means besides preparing a vaccination distribution program, it is also necessary to fill in the gaps in our public healthcare system, which was exposed by the pandemic.

Finance Minister Nirmala Sitharaman is expected to present the Union Budget on February 1, 2021. With the announcement of Union Budget 2021, it will be interesting to watch, how the government is structuring its budget to combat the fiscal deficit the Indian economy suffered in the year 2020.

For any kind of query you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.

Happy Investing!

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