Modi’s government reveals pro-poor, farmer-friendly budget for India

The Indian government intends to distribute the benefits of growth among the poorer sections of society, including the vast majority of India’s farmers, he said.

“This may have been done to maintain the fiscal deficit”.

It said while the overall subsidy burden is likely to come down on lower oil subsidies, there is only a mild hike in productive spending (which includes capital spending and revenues grants for creation of capital assets) has been increased only marginally to 2.75 per cent from 2.73 per cent.

But, despite hefty commitments on rural welfare and health, Jaitley managed to stick to his fiscal deficit target of 3.5 per cent of gross domestic product for the 2016/2017 fiscal year that starts on April 1 – a pledge that may open the way for an early interest rate cut by the Reserve Bank of India.

“Despite our disappointment on the tax on cars, I see no reason for the mayhem in the market”, Anand Mahindra, chairman of Mahindra Group said on Twitter.

Jaitley said the government has provided a path breaking crop insurance scheme “Prime Minister Fasal Bima Yojana”, for which Rs 5,500 crore has been allocated for effective implementation in 2016-17.

Accordingly, the budget proposals provided ways to ensure growth while tackling tough economic conditions.

The allocation marks around 10 percent increase over the revised estimate of 2015-16, which was Rs. 2,24,636 crore.

His difficulties have been compounded by the huge payout of Rs 1.02 lakh crore that will become necessary on account of the 7th Pay Commission recommendations for government employees. For development programme, the region has been allocated Rs 98 crore out of the total plan outlay of Rs 1,000 crore. Items like ‘network for defence services (Rs 2,710 crore), atomic energy industry (Rs 2,778 crore), atomic energy research (Rs 3,123 crore), border infrastructure and management (Rs 3,560 crore) that have national security dimensions witnessed reasonable investments. In the secondary education sector, an allocation of Rs 653 crore has been made for the region, while the Rashtriya Madhyamik Shiksha Abhiyan Scheme has been approved with a provision of Rs 350 crore for the region. Announcing measures for moving towards a pensioned society, Finance Minister Arun Jaitley said, “Pension schemes offer financial protection to senior citizens”. Jaitley on Monday said the government will prioritise its expenditure to meet these two liabilities.

Terming the budget as futuristic and one that aims at inclusive growth, Shrikant Shitole, Managing Director, India, Symantec stated, “Enhanced investment in the budget for infrastructure, agriculture, rural and social sectors would support India’s continued journey of inclusive and sustainable growth”.

The Budget also chose to do away with the classification of Plan and non-Plan expenditure from fiscal 2017-18 onwards, synchronising it with the last year of the 12th Five Year Plan.