HIGHLIGHTS-India unveils budget aimed at boosting pandemic-hit economy

Indian Finance Minister Nirmala Sitharaman on Monday unveiled the budget for fiscal 2021-22, which 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 the next two months from the 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 to expect two or more COVID-19 vaccines soon

* India to launch a new federal health scheme with an 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 a bill for development financial institution with a capital of 200 billion rupees ($2.74 billion)

* To infuse 200 billion rupees ($2.74 billion) for the recapitalization of state-run banks in FY2022 * India to consolidate certain SEBI regulations for Securities Market Code

* To relax FDI cap for the 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 a scheme to incentivize the use of digital payments

* India to incentivize 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 DIVESTMENT

* 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 a policy for the privatization of state-run companies

* To create a new list of companies for divestment * India to introduce a new mechanism for the privatization of loss-running state-run companies

* To monetize 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 the power sector for the 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 monetize infrastructure assets

TRANSPORT * Allocates 1.18 trillion rupees ($16.17 billion) for the ministry of roads and highways

* Allocates 1.1 trillion rupees ($15.07 billion) for railways * Railways to monetize freight corridors

* India to launch new vehicle scrapping policy * Proposes 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 the gig economy, building, and construction workers * Social security benefits to be extended to gig economy workers

($1 = 72.9940 Indian rupees) (Compiled by Alasdair Pal Editing by Euan Rocha)