By TN Ashok /
New Delhi: The Finance Minister Arun Jaitley today presented the BJP led NDA government’s 2nd full fledged budget providing reliefs to the small tax payer by not raising any new taxes but giving concessions to them including senior citizens but raising revenues through indirect taxes in an effort to have enough funds for development to sustain growth at the 7% plus range of GDP against the decelerated 6.3% GDP growth of last few years.
Presenting the Union budget for 2016-17 , Finance Minister Arun Jaitley told lok sabha today that the budgetary proposals were coming at a time when the international economic scenario was still very challenging. India was still facing the head winds of economic turbulence and volatility being experienced in western nations across the globe.
GDP Projected at 7.6% for 2016-17 – IMF Hails India’s Growth
Emphasis on Infrastructure Development
Benefits to small tax payers, health scheme for poor – Rich taxed – Cigarettes and Cars costlier
Revenue Loss from Direct Tax concessions – Rs 1060 crore & Revenue Gain from Indirect Tax proposals – Rs 20,670 crore – Net Revenue Gain from Taxes Rs 19,610 crore
Jaitley said it was worth noting that in this global scenario of persisting meltdown , the IMF has hailed India as a ‘bright spot’ amidst a slowing global economy. GDP growth has now accelerated to 7.6% compared to the last three years of the previous Government when growth had decelerated to 6.3% .He said this was accomplished despite two consecutive years of monsoon shortfall of 13% compared to normal rainfall in the last three years of the previous Government. He added that the country’s external situation is robust and the Current Account deficit has declined from 18.4% billion US dollars in the first half of last year to 14.4 billion this year.
While cautioning about the risks of further global slowdown and mounting turbulence, he said this complicates the task of economic management for India. He said the financial years 2015-16 and 2016-17 have been and will be extremely challenging for Government expenditure. He said the next financial year will cast an additional burden on account of the recommendations of the 7th Central Pay Commission and the implementation of Defence OROP.
Stating that the Government has to prioritise its expenditure, Jaitley said the Government wants to enhance expenditure in the farm and rural sector, the social sector, the infrastructure sector and provide for recapitalisation of the banks to the tune of some Rs 25,000 crore. Total planned expenditure on projects for development is about Rs 19.78 lakh crore for FY 2016-17, he said. .
The Finance Minister provided relief to the small tax payer and farmers mostly and the revenue loss from direct tax concessions would amount to Rs 1060 crore and gain from some changes in indirect proposals would amount to Rs 20,670 crore thus making the net revenue gain to the government in the 2016-17 budget to about Rs 19,610 crore. He made house rentals paid by the urban middle class less cumbersome for tax payment, buying of houses under rs 50 lakhs easier under taxes, besides making car buying costlier to tackle the menace of pollution by automobiles and cigarettes costlier in keeping with the anti smoking campaign.
Jaitley also announced a new health protection scheme which will provide health cover up to Rs. One lakh per family for economically weak families. For senior citizens of age 60 years and above belonging to this category, an additional top-up package up to Rs. 30,000 will be provided. In order to make quality medicines available at affordable prices, 3000 stores under Prime Minister’s Jan Aushadhi Yojana will be opened during 2016-17. He said that a ‘National Dialysis Services Programme’ will be started to provide dialysis services in all district hospitals.
Other important reforms, the Finance Minister announced included incentivizing gas discovery and exploration by providing calibrated marketing freedom; enactment of a comprehensive law to deal with resolution of financial firms; providing legal framework for dispute resolution in PPP projects and public utility contracts; undertaking important banking sector reforms and public listing of general insurance companies and undertaking significant changes in FDI policy.
The Finance Minister said the agenda for the next year will be to ‘Transform India’ in this direction. He highlighted that the budget proposals are built on this transformative agenda with nine distinct pillars which include: Agriculture and Farmers’ Welfare; Rural Sector; Social Sector including Healthcare; Education, Skills and Job Creation; Infrastructure and Investment; Financial Sector Reforms; Governance and Ease of Doing Business; Fiscal Discipline and Tax Reforms.
Jaitley announced that the Government will reorient its interventions in the farm and non-farm sectors to double the income of the farmers by 2022. He said total allocation for Agriculture and farmers’ Welfare is Rs. 35,984 crore. Stating that the ‘Pradhan Mantri Krishi Sinchai Yojana’ has been strengthened and will be implemented in mission mode, he said 28.5 lakh hectares will be brought under irrigation under this Scheme. He also underlined that the implementation of 89 irrigation projects under AIBP, which have been languishing will be fast tracked.
The Finance Minister announced creation of a dedicated Long Term Irrigation Fund in NABARD with an initial corpus of about Rs. 20,000 crore. To achieve all these, a total provision of Rs. 12,517 crore has been made through budgetary support and market borrowings in 2016-17. He also said, simultaneously a major programme for sustainable management of ground water resources has been prepared with an estimated cost of Rs. 6,000 crore and proposed for multilateral funding. The Minister said at least 5 lakh farm ponds and dug wells in rain fed areas and 10 lakh compost pits for production of organic manure will be taken up by making use of allocations under MGNREGA.
The Finance Minister said the agenda for the next year will be to ‘Transform India’ in this direction. He highlighted that the budget proposals are built on this transformative agenda with nine distinct pillars which include: Agriculture and Farmers’ Welfare; Rural Sector; Social Sector including Healthcare; Education, Skills and Job Creation; Infrastructure and Investment; Financial Sector Reforms; Governance and Ease of Doing Business; Fiscal Discipline and Tax Reforms.
Jaitley announced that the Government will reorient its interventions in the farm and non-farm sectors to double the income of the farmers by 2022. He said total allocation for Agriculture and farmers’ Welfare is Rs. 35,984 crore. Stating that the ‘Pradhan Mantri Krishi Sinchai Yojana’ has been strengthened and will be implemented in mission mode, he said 28.5 lakh hectares will be brought under irrigation under this Scheme. He also underlined that the implementation of 89 irrigation projects under AIBP, which have been languishing will be fast tracked.
The Finance Minister announced creation of a dedicated Long Term Irrigation Fund in NABARD with an initial corpus of about Rs. 20,000 crore. To achieve all these, a total provision of Rs. 12,517 crore has been made through budgetary support and market borrowings in 2016-17. He also said, simultaneously a major programme for sustainable management of ground water resources has been prepared with an estimated cost of Rs. 6,000 crore and proposed for multilateral funding. The Minister said at least 5 lakh farm ponds and dug wells in rain fed areas and 10 lakh compost pits for production of organic manure will be taken up by making use of allocations under MGNREGA.
The Finance Minister said that the Government will undertake three major schemes to help the weaker sections. He said the Pradhan Mantri Fasal Bima Yojana has already been announced. The farmer will pay a nominal amount of insurance premium and get the highest ever compensation in the event of any loss suffered. Jaitley announced a health insurance scheme which will protect one-third of India’s population against hospitalization expenditure. He also announced that the Government is launching a new initiative to ensure that the BPL families are provided with a cooking gas connection, supported by a Government subsidy.
Jaitley said the Government will undertake significant reforms such as the enactment of a law to ensure that all Government benefits are conferred upon persons who deserve it, by giving a statutory backing to the AADHAR platform. He added that significant changes will be brought in the legislative framework relating to the transport sector so as to free it from constraints and restrictions.
Jaitley said the Soil Health Card Scheme will cover all 14 crore farm holdings by March 2017. He said 2,000 model retail outlets of fertilizer companies will be provided with soil and seed testing facilities during the next three years.
The Finance Minister announced that the allocation under Pradhan Mantri Gram Sadak Yojana has been increased to Rs. 19,000 crore and it will connect remaining 65,000 eligible habitations by 2019.
In the budget special focus has been given to ensure adequate and timely flow of credit to the farmers. Against the target of Rs. 8.5 lakh crore in 2015-16, the target for agricultural credit in 2016-17 will be an all-time high of Rs. 9 lakh crore. To reduce the burden of loan repayment on farmers, a provision of Rs. 15,000 crore has been made in the BE 2016-17 towards interest subvention.
The Finance Minister informed that for effective implementation of Prime Minister Fasal Bima Yojana, Rs. 5,500 crore have been provided in the Budget 2016-17. He said to make dairying more remunerative to the farmers, four new projects will be taken up: First the ‘Pashudhan Sanjivani’, an animal wellness programme and provision of Animal Health Cards (‘Nakul Swasthya Patra’); Second , an Advanced breeding technology; Third, Creation of ‘E-Pashudhan Haat’, an e market portal for connecting breeders and farmers; and Fourth, a National Genomic Centre for indigenous breeds. These projects will be implemented at a cost of Rs. 850 crores over the next few years.
On rural sector, Jaitley announced that a sum of Rs. 2.87 lakh crore will be given as Grant in Aid to Gram Panchayats and Municipalities. It will translate to an average assistance of over Rs. 80 lakh per Gram Panchayat and over Rs. 21 crore per Urban Local Body.
the FM said every block under drought and rural distress will be taken up as an intensive Block under the Deen Dayal Antyodaya Mission. He announced allocation of Rs. 38,500 crore for MGNREGS. He said 300 Rurban Clusters will be developed under the Shyama Prasad Mukherjee Rurban Mission. He declared that the Government is committed to 100% village electrification by 1st May, 2018. Regarding Swachh Bharat Mission, Sh. Jaitley said Rs. 9,000 crore has been provided for it. He said a new Digital Literacy Mission Scheme for rural India will cover around 6 crore additional households within the next 3 years.
In order to develop governance capabilities of Panchayati Raj Institutions on the Sustainable Development Goals, the Minister announced a new scheme namely ‘Rashtriya Gram Swaraj Abhiyan”, for which Rs. 655 crore is being set apart. For rural development as a whole, Rs. 87,765 crore have been allocated.
The Finance Minister announced a massive mission to provide LPG connection in the name of women members of poor households for which Rs. 2000 crore have been earmarked. This will benefit about 1 crore 50 lakh households below the poverty line in 2016-17. The Scheme will be continued for at least two more years to cover a total of 5 crore BPL households.