Arun Jaitely, Union Finance Minister presented the Annual Financial Statement- ‘Budget’ 2016-17 in Lok Sabha on 29th February, 2016. The main focus was on Agriculture and Rural sector to spur the demands and targeted to double the farmers income by 2022. He cited that he was presenting the Budget amid of global turmoil growing with 3.1% in 2015. 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. It is projected to be 1.4% of GDP at the end of this year. The foreign exchange reserves are at the highest ever level of about 350 billion US dollars.
Finance Minister laid stress on 9 distinct pillars to ‘Transform India’:
(i) Agriculture and Farmers’ Welfare: with focus on doubling farmers’ income in five years;
(ii) Rural Sector: with emphasis on rural employment and infrastructure;
(iii) Social Sector including Healthcare: to cover all under welfare and health services;
(iv) Education, Skills and Job Creation: to make India a knowledge based and productive society;
(v) Infrastructure and Investment: to enhance efficiency and quality of life;
(vi) Financial Sector Reforms: to bring transparency and stability;
(vii) Governance and Ease of Doing Business: to enable the people to realise their full potential;
(viii) Fiscal Discipline: prudent management of Government finances and delivery of benefits to the needy; and
(ix) Tax Reforms: to reduce compliance burden with faith in the citizenry.
In each of these themes, he outlined specific policy measures and initiatives which would have a transformative impact on Indian economy and the lives of people.
According to Budget 2016-17, the Fiscal Deficit target of 3.9% has been achieved without reduction in expenditure outlay at RE stage. The total plan outlay for 2016-17 is Rs.5,50,010 crore and Non- Plan outlay is Rs.,28,050.45 crore. A range of fiscal deficit 2018 onward has been proposed instead targeted fiscal deficit which is set at 3.5% for 2016-17.
Agriculture and Farmer’s Welfare:
- Allocation for Agriculture and Farmers’ welfare is Rs.35,984 crore. It has been targeted to double farmers incomes by 2022.
- ‘Pradhan Mantri Krishi Sinchai Yojana’ to be implemented in mission mode. 28.5 lakh hectares will be brought under irrigation. Rs.2340 for development of Micro irrigation (per drop more crop); Rs.1500 for Integration Watershed Development Programme; Rs.2000 for Accelerated irrigation benefit and flood manag
programme) have allocated.
- Implementation of 89 irrigation projects under AIBP, which are languishing for a long time, will be fast tracked.
- A dedicated Long Term Irrigation Fund will be created in NABARD with an initial corpus of about ` 20,000 crore.
- Programme for sustainable management of ground water resources with an estimated cost of Rs.6,000 crore will be implemented through multilateral funding.
- 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 under MGNREGA.
- Soil Health Card scheme will cover all 14 crore farm holdings by March 2017.
- 2,000 model retail outlets of Fertilizer companies will be provided with soil and seed testing facilities during the next three years.
- Promote organic farming through ‘Parmparagat Krishi Vikas Yojana’ and ‘Organic Value Chain Development in North East Region‘.
- Unified Agricultural Marketing ePlatform to provide a common e-market platform for wholesale markets. It will be launched on 14th April 2016- B.R.Ambedkar’s anniversay. Government also seeks to amend states APMC act to provide single market to farmers.
- Allocation under Pradhan Mantri Gram Sadak Yojana increased to Rs.19,000 crore. Will connect remaining 65,000 eligible habitations by 2019.
- 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.
- Allocation under Prime Minister Fasal Bima Yojana -Rs.5,500 crore.
- Rs.850 crore for four dairying projects – ‘Pashudhan Sanjivani’, ‘Nakul Swasthya Patra’, ‘E-Pashudhan Haat’ and National Genomic Centre for indigenous breeds
- Allocation for rural sector – Rs.87,765 crore.
- Rs.2.87 lakh crore will be given as Grant in Aid to Gram Panchayats and Municipalities as per the recommendations of the 14th Finance Commission. It translates an average of Rs.80 lakhs and Rs.21 crores to each gram panchayats and municipalities council respectively.
- Every block under drought and rural distress will be taken up as an intensive Block under the Deen Dayal Antyodaya Mission. It has been allocated Rs.3000 crore, whereas Rs.5500 crore has been allocated to Integrated Power Development Scheme.
- A sum of ` Rs.38,500 crore allocated for MGNREGS with guaranteed 100 days of employment.
- 300 Rurban Clusters will be developed under the Shyama Prasad Mukherjee Rurban Mission.
- 100% village electrification by 1st May, 2018.
- District Level Committees under Chairmanship of senior most Lok Sabha MP from the district for monitoring and implementation of designated Central Sector (100% centrally sponsored) and Centrally Sponsored Schemes(60:40 for states and 90:10 for North-eastern states).
- Priority allocation from Centrally Sponsored Schemes to be made to reward villages that have become free from open defecation. 5000 crore rupees and 9000 crore rupees have allocated to provide safe drinking water in rural areas and for Swachh Bharat Abhiyan for rural sanitation respectively.
- A new Digital Literacy Mission Scheme for rural India to cover around 6 crore additional household within the next 3 years.
- National Land Record Modernisation Programme has been revamped.
- New scheme Rashtriya Gram Swaraj Abhiyan proposed with allocation of Rs.655 crore.
- Rs.9000 crore has been allocated for Swachh Bharat Abhiyan.
- Allocation for social sector including education and health care – Rs.1,51,581 crore.
- Rs.2,000 crore allocated for initial cost of providing LPG connections to BPL families.
- New health protection scheme will provide health cover up to Rs.1 lakh per family. For senior citizens an additional top-up package up to Rs.30,000 will be provided.
- 3,000 Stores under Prime Minister’s Jan Aushadhi Yojana will be opened during 2016-17.
- ‘National Dialysis Services Programme’ to be started under National Health Mission through PPP mode. The equipment of dialysis machine will be exempted from custom duties/CVD and SAD.
- “Stand Up India Scheme” to facilitate at least two projects per bank branch. This will benefit at least 2.5 lakh entrepreneurs.
- National Scheduled Caste and Scheduled Tribe Hub to be set up in partnership with industry associations to encourage SC/ST and women entrepreneurs. Rs.500 crore has been allocated for it and there will be 100% deduction of profits for three years.
- Allocation of Rs.100 crore each for celebrating the Birth Centenary of Pandit Deen Dayal Upadhyay and the 350th Birth Anniversary of Guru Gobind Singh.
- Rs.2791 crore for Post-Matric scholarship for Scheduled Castes.
- Rs.885 crore for Post-Matric scholarship for Other Backward Classes.
- Rs.130 crore for Aids and Appliances for Handicapped.
- Rs.193 crore for Sugamya Bharat Abhiyan.
- Rs.113 crore for various National Institutes for Disabled Persons.
- Rs.19000 crore for National Health Mission.
- Rs.2450 crore for Pradhan Mantri Swasthya Suraksha Yojana.
- Rs.1500 crore for Rashtriya Swasthya Suraksha Yojana.
Education, Employment and Skill Development:
- Rs.22500 crore for Sarva Shiksha Abhiyan to increasing focus on quality education.
- 62 new Navodaya Vidyalayas will be opened.
- Higher Education Financing Agency to be set-up with initial capital base of Rs.1000 crores.
- Rs.9700 crore for National Programme of Mid Day Meals in Schools.
- Rs.3700 crore for Rashtriya Madhyamik Shiksha Abhiyan.
- Rs.5755 crore for Technical Education.
- Rs.2050 crore for University Grants Commission.
- Rs.1300 crore for Rashtriya Uchchtar Shiksha Abhiyan.
- Regulatory architecture to be provided to ten public and ten private institutions to emerge as world-class Teaching and Research Institutions
- Digital Depository for School Leaving Certificates, College Degrees, Academic Awards and Mark sheets to be set-up. It will help the students to safely place their documents online without being misplaced or lost.
- Allocation for skill development – Rs.1804 crore.
- 1500 Multi Skill Training Institutes to be set-up.
- National Board for Skill Development Certification to be setup in partnership with the industry and academia
- Entrepreneurship Education and Training through Massive Open Online Courses.
- GoI will pay contribution of 8.33% for of all new employees enrolling in EPFO for the first three years of their employment with salary 15000/month or less. Budget provision of Rs.1000 crore for this scheme.
- Deduction under Section 80JJAA of the Income Tax Act will be available to all assesses who are subject to statutory audit under the Act
- 100 Model Career Centres to operational by the end of 2016-17 under National Career Service.
Model Shops and Establishments Bill to be circulated to States.
Infrastructure and Industrial Sector:
- Total investment in the road sector, including PMGSY allocation, would be Rs.97,000 crore during 2016-17.
- India’s highest ever kilometres of new highways were awarded in 2015. To approve nearly 10,000 kms of National Highways in 2016-17.
- Allocation of Rs.55,000 crore in the Budget for Roads. Additional Rs.15,000 crore to be raised by NHAI through bonds.
- Total outlay for infrastructure – Rs.2,21,246 crore.
- Amendments to be made in Motor Vehicles Act to open up the road transport sector in the passenger segment
- Action plan for revival of unserved and underserved airports to be drawn up in partnership with State Governments.
- To provide calibrated marketing freedom in order to incentivise gas production from deep-water, ultra deep-water and high pressure-high temperature areas.
- Comprehensive plan, spanning next 15 to 20 years, to augment the investment in nuclear power generation to be drawn up.
- Steps to re-vitalise PPPs:(1)Public Utility (Resolution of Disputes) Bill will be introduced during 2016-17. (2)Guidelines for renegotiation of PPP Concession Agreements will be
issued. (3)New credit rating system for infrastructure projects to be introduced
- 100% FDI to be allowed through FIPB route in marketing of food products produced and manufactured in India.
- A new policy for management of Government investment in Public Sector Enterprises, including disinvestment and strategic sale approved.
Financial Sector Reforms:
- The government also proposed to amend RBI act, 1934 for setting up of a Monetary Policy Committee through Financial Bill 2016. It will set the benchmark interest rate of the central bank and set inflation targets.
- A Financial Data Management Centre to be set up.
- RBI to facilitate retail participation in Government securities.
- New derivative products will be developed by SEBI in the Commodity Derivatives market.
- Amendments in the SARFAESI Act 2002 to enable the sponsor of an ARC to hold up to 100% stake in the ARC and permit non institutional investors to invest in Securitization Receipts.
- Comprehensive Central Legislation to be bought to deal with the menace of illicit deposit taking schemes.
- Increasing members and benches of the Securities Appellate Tribunal.
- Allocation of Rs.25,000 crore towards recapitalisation of Public Sector Banks.
- Target of amount sanctioned under Pradhan Mantri Mudra Yojana increased to Rs.1,80,000 crore.
- General Insurance Companies owned by the Government to be listed in the stock exchanges.
- Aadhar will get legal backing from the government. It will be necessary to have Aadhar card to get subsidy or any other benefits from the government funds.
- A Task Force has been constituted for rationalising of human resources in various Ministries.
- Introduce DBT on pilot basis for fertilizer in a few districts across the country, with a view to improving the quality of service delivery to farmers.
- Automation facilities will be provided in 3 lakh fair price shops by March 2017.
- Amendments in Companies Act, 2013 to improve enabling environment for start-ups.
- Price Stabilisation Fund with a corpus of Rs.900 crore to help maintain stable prices of Pulses.
- “Ek Bharat Shreshtha Bharat” programme will be launched to link States and Districts in an annual programme that connects people through exchanges in areas of language, trade, culture, travel and tourism.
- Expansion in the scope of e-assessments to all assessees in 7 mega cities in the coming years.
- Interest at the rate of 9% p.a against normal rate of 6% p.a for delay in giving effect to Appellate order beyond ninety days.
- ‘e-Sahyog’ to be expanded to reduce compliance cost, especially for small taxpayers.