India’s Annual Budget: Focus On Agriculture, Rural Economy, Infrastructure

Road Transport and Highways Minister Nitin Gadkari termed it a “revolutionary” and “historic” budget with much emphasis on infrastructure and said the government has been able to revive the road sector which has been languishing in the “ICU” and now in months to come it will gain much momentum.

The Prime Minister pushed for more and more use of modern technology and equipment along with traditional wisdom of farming to boost the agriculture sector, not only to meet the domestic needs but also cater to the demands from overseas.

Some of the big expectations from the spending plan are that the government will try and boost the rural economy, which has suffered thanks to two consecutive years of less than sufficient rainfall during the monsoon.

Finance Minister Arun Jaitley announced the Union Budget 2016-17 on Monday and he laid out the roadmap to “ensure macro-economic stability and prudent fiscal management”. He announced a total of Rs 19,000 crore allocation for the Pradhan Mantri Gram Sadak Yojana along with Rs 60,000 crore for recharging of ground water reserves.

Rs 38,500 crore has been allocated for MNREGA – the job scheme that was introduced by the earlier UPA Government.

Healthcare has finally taken center stage in the Budget with initiatives like the Health Protection Scheme of Rs 1 lakh to cover unforeseen illness in poor families with an additional Rs 30,000 for senior citizens. Though the stock and bond markets were relieved by the government sticking to fiscal prudence, global rating agency Standard & Poor’s (S&P) said that the budget’s “limited progress” in fiscal consolidation only modestly reduces the vulnerabilities associated with the country’s low per capita income and weak public finances.

Overall, Rs.87,765 crore was being allocated for rural development as a whole.

“Reforms in the economy can not be brought about by changing the slabs and if tax payers stop giving taxes, the country will stop”. He said that to lessen burden on individuals with income not exceeding Rs. 5 lakh, a proposed ceiling of tax rebate under sec 87A from Rs 2000 to Rs 5000 has been announced.

Noted economist Jean Dreze, forwarding this analysis, adds, “The latest budget speech perpetuates a chronic blindness to basic social needs”.

The minister said 62 new Navodaya Vidyalayas will be opened over the next two years in the districts where they don’t now exist. During Budget 2016, the government removed the educational cess, but subsumed it into the excise duty resulting in an increase from 12 to 12.5 percent. Cars will be getting costlier as pollution cess of 1 per cent will be levied on small petrol, CNG and LPG cars.