Union Budget 2016-17
Andalib Akhter / AMN
IN HIS SECOND consecutive budget, Finance Minister Arun Jaitley tried to focus on agriculture, farmers’ welfare, rural employment and development of infrastructure. It also tried to inculcate welfare and health services as well as Making India as a knowledge based and productive society.
Presentinthe Budget in Lok Sabha Finance Minister said that the Government’s agenda was to transform India, with incentives for agriculture and farmers’ welfare, rural employment and development of infrastructure, covering all welfare and health services as well as Making India as a knowledge based and productive society.
Mr. Jaitley said that Government will reorient its intervention in the farm and non-farm sectors to shift focus beyond the country’s food security to farmers’ income security. He said that a total allocation of Rs.35, 984 crore is proposed for this purpose in order to double the income of farmers by 2022. He said that a Unified Agricultural Marketing E-Platform will be dedicated to the nation on the Birthday of Dr. Baba Saheb Ambedkar on 14th April this year to help farmers in accessing markets which is critical for enhancing their income.
The Finance Minister said that Pradhan Mantri Krishi Sichai Yojna will be implemented in Mission Mode in order to bring 28.5 lakh hectares under the scheme. He said that a long term Irrigation Fund will be created in NABARD with an initial Corpus of about Rs.20,000 crore. Mr. Jaitley said that allocation of Rs.19,000 crore is proposed during 2016-17 for implementation of Pradhan Mantri Gram Sadak Yojna. He said that the pace of construction of roads per day under the scheme will be substantially stepped up. The Finance Minister said that special focus has been given to ensure adequate and timely flow of credit to the farmers. He said that all time high of Rs.9 lakh crore is being allocated for agriculture credit. He added that to reduce the burden of loan repayment on farmers, a provision of Rs.15,000 crore has been made towards interest subvention. A provision of Rs.5,500 crore has been made in the budget for Prime Minister Fasal Bima Yojna.
Referring to Rural Sector, the Finance Minister said that an overall Rs.87,765 crore have been allocated for its development. He said, Rupees two lakh 87 thousand crore will be given as grant-in-aid to Gram Panchayat and Municipalities marking a quantum jump of 228 percent compared to the previous five year period. He said that Rs.38,500 crore have been allocated for Mahatma Gandhi National Rural Employment Generation Scheme, MGNREGS. Mr. Jaitley said that Government is committed to achieve 100 percent rural electrification by 1st May 2018. He said that Rs.8,500 crore rupee have been provided for Deen Dayal Upadhyaya Gram Jyoti Yojna and Integrated Power Development Schemes in this regard. Rs.9,000 crore have been provided for Swachh Bharat Mission to improve sanitation and cleanliness especially in rural India. He said, priority allocation from centrally sponsored schemes will be made to reward villages that have become free from open defecation.
The Finance Minister said that spread of digital literacy in rural area is another priority of the government. He said that it is planned to launch a new Digital Literacy Mission Scheme to cover around 6 crore additional rural households within next three years. Referring to Social Sector, the Finance Minister said that unforeseen catastrophic health events push lakhs of households below the poverty line every year. In order to help such families, Mr. Jaitley said that a Health Insurance Scheme is being launched to protect one third of India’s population against hospitalisation expenditure. He said that the scheme will provide health cover upto one lakh rupees per family. For senior citizens belonging to this category, an additional top-up package upto Rs.30,000 will be provided. Mr. Jaitley said that government proposes to start a ‘National Dialysis Services Programme’ under the National Health Mission to provide dialysis services in all district hospitals. He said that to reduce cost, it is proposed to exempt certain parts of dialysis equipment from basic customs duty, excise etc.
Mr. Jaitley said that a new initiative is being taken to ensure that the BPL families are provided with the Cooking Gas connection supported by a government subsidy. Setting aside, Rs. 2,000 crore in this year’s budget, he said, it will benefit about one crore fifty lakh BPL households in 2016-17. He added that the scheme will be continued for at least two more years to cover five crore BPL households. Highlighting the proposals for education, skill development and job creation, the Finance Minister said that next big step after universalisation of primary education would be the focus of the quality of education. He said that 62 new Navodaya Vidyalayas will be opened in the remaining uncovered districts over the next two years. Mr. Jaitley said that an enabling regulatory architecture will be provided to ten public and ten private higher educational institutions to emerge as world class teaching and research institutions.
He said that an initial capital of Rupees one thousand crore would be allocated to set up a Higher Education Financing Agency. He also said that Rs.17 thousand crore has been set aside for setting up of 1,500 Multi Skill Training Institutes in the country. Mr. Jaitley said that government proposes to further scale up Pradhan Mantri Kaushal Vikas Yojna to impart skills to one crore youth over the next three years. He said that to incentivize creation of new jobs in the formal sector, the Central Government will pay Employees Pension Contribution of 8.33 percent for all new employees enrolling in EPFO for the first three years of their employment. He said that the scheme will be applicable to those with salary upto Rs.15,000 per month. He said that a provision of Rupees one thousand core has been made for this scheme.
Describing infrastructure and investment as an important pillar of the budget theme ‘Transform India’, the Finance Minister said that the total outlay for infrastructure during 2016-17 would be Rs. 2 lakh 21 thousand to 2 hundred 46 crore. He said, Rs.55 thousand crore allocation is proposed for roads and highways. He said that it will be topped up by additional 15,000 crore to be raised by NHAI through bonds. Mr. Jaitley said that with the capital expenditure of the railways, the total outlay on roads and railways will be Rupees two lakh 18 thousand crore in 2016-17. Mr. Jaitley said that making passenger traffic on roads more efficient, the abolition of permit raj will be the government’s medium term goal. He said that the government will enact necessary amendments in the Motor Vehicles Act and open up the road transport sector in the passenger segment.
Referring to development of major ports, the Finance Minister said that it is proposed to develop new Greenfield ports both in the eastern and western coasts. He said that Rs 800 crore has been provided to expedite the work on these initiatives including the national waterways. In the power sector, Government is drawing up a comprehensive plan to augment the investment in nuclear power generation spanning over next 15 to 20 years. The Finance Minister said that the budgetary allocation of Rs.3,000 crore per annum together with public sector investments will be leveraged for this purpose. He said that to augment infrastructure spending further the government will permit raising of additional finances through bonds to the extent of Rs.31 thousand 300 crore by NHAI, PFC, REC, IREDA, NABARD and Inland Water Authority.
He announced new initiatives to reinvigorate the Public Private Partnership in the development of infrastructure. These include introducing a Public Utility (Resolution of Disputes) Bill during the next financial year, guidelines for renegotiation of PPP Concession Agreements and a new credit rating system for infrastructure projects. Announcing further reforms in FDI policy, the Finance Minister said the duty drawback scheme has been widened and deepened to include more products and countries. He said, 100 percent FDI will be allowed through FIPB route in marketing of food products produced and manufactured in India. He said, this will benefit farmers, give impetus to food processing industry and create vast employment opportunity.
Describing a vibrant financial sector of critical importance to the growth of economy, the Finance Minister announced a number of initiatives in this regard. He said that a comprehensive Code on Resolution of Financial Firms will be introduced as a Bill in Parliament during 2016-17. He said, the Code will provide a specialized resolution mechanism to deal with bankruptcy situations in banks, insurance companies and financial sector entities. He also proposed necessary amendments in the SARFAESI Act 2002 to tackle problem of stressed assets in the banking sector through Asset Reconstruction Companies. He said that a Financial Data Management Centre under the aegis of Financial Stability Development Council will be set up to facilitate integrated data aggregation and analysis in the financial sector. The Finance Minister also proposed to amend the SEBI Act 1992 in the coming year to provide for more members and benches of the Securities Appellate Tribunal.
Stressing the importance of a strong and well functioning banking system for strong financial sector, Mr. Jaitley said that the country is confronted with the problem of stressed assets in the public sector banks which he described as a legacy of the past. The Finance Minister proposed an allocation of Rs.25 thousand crore in the budget for recapitalization of public sector banks. He said that the bank board bureau will be operational during the coming year and the roadmap for consolidation of public sector banks will be spelt out. He said that the debt recovery will be strengthened with focus on improving the existing infrastructure and speedy disposal of cases. To provide better access to financial services, especially rural areas, the Finance Minister said that massive nationwide rollout of ATMs and Micro ATMs in post Offices would be undertaken in the next three years.