On February 29, 2016 Union Finance Minister, Arun Jaitley, presented his third Union Budget in the Lok Sabha. The Union Budget is focussed towards the rural India where in spite of high urbanisation in the country, because of high shift of population from rural to urban India ,still today is the habitat of 68 percent of the country’s population and 49 percent of the country’s workforce is dependent on agriculture. Thus the budget aims to leap forward the whole country with an expected growth rate of 7 to 7.75 percent GDP growth in Financial year 2016-2017.Here is a glimpse of some of the sectors of Indian economy and how it is going to be affected by the Union Budget 2016.
The Union Budget, 2016 is rural India centric and the pivot of the union budget is the rural populace including the welfare of farmers. The two boldest steps announced in the Union Budget, 2016 are firstly, the goal of doubling the farmer’s income by 2022 and secondly, to electrify all villages by 2018.The total allocation for rural sector is Rs.87, 765 crores and allocation for agriculture and farmer’s welfare is 35,984 crores. At a time when still in the year,2016 ,when India’s agriculture is still a gamble on the monsoon ,our Honourable Finance Minister, Arun Jaitley’s budget initiative is expected to help farmers by investments in irrigation, agri-markets and dairies. About 28, 5 lakh hectares of land is to be brought under irrigation under ‘Pradhan Mantri Krishi Sinchai Yojana’ .Further for higher agricultural production Rs 85,000 crore fertiliser subsidy is mooted in the budget. Moreover for agricultural procurement, food grains has been decentralised with online procurement by Food Corporation of India. To boast rural infrastructure an annual allocation of Rs 19,000 crore has been earmarked in 2016-2017 and together with state’s share goes up to Rs 27,999 crore. A record amount of Rs 38, 5000 crore will be spent on MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) programmes. By March 2017 it is proposed in Union Budget to provide Soil Health Card Scheme to cover all 14 crore farm holdings. The Union Government proposes to promote through this Budget ‘Paramparagat Krishi Vikas Yojana’ and ‘Organic Value Chain Development in the North East Region’. For crop insurance in case of crop failure, allocation under Prime Minister Fasal Bima Yojana is Rs 5,500 crore. In addition to this Rs 850 crores has been earmarked four dairying projects –‘Pasudhan Sanjivini’, ’Nakul Swasthya Patra’,E-Pasudhan Haat’ and ‘National Genomic Centre for indigenous breeds. All in all allocation for rural sector is Rs 87,765 crore.
The Union Budget, 2016 may be termed as taxing the rich to feed the poor and the needy. In this regard, twenty million tax-payers earning up to Rs 5 lakh a year will get basic tax exemption of Rs 3 lakh as the relief under Section 87A has been increase from Rs 2000 to Rs 2500.The house rent exemption was raised from Rs 24,000 top Rs 60,000.The budget has also reintroduced a Rs 50,000 additional deduction for home loan interest under section 80EE for first time property buyers. The additional deduction will be available only if the value of the real estate is up to Rs 50 lakh and the home loan amount is up to Rs 35 lakh.
On the other hand the super-rich were hit twice. The super-rich tax payers who are earning over Rs 1 crore a year will have to pay surcharge of 15 percent which is up from previous years 12 percent. Secondly dividend income of over Rs 10lakh will face tax of 10 percent in addition to the dividend distribution tax. They too will have to pay 1 percent tax for certain luxury goods. Krishi Kalyan Cess @ 0.5% on all taxable services w.e.f June 1, 2016 will be levied.
Allocation for social sector including education and health care is Rs 1, 51,581 crore.62 new Navodaya Vidyalayas will be opened in the country. The stress of this Union Budget is to uplift the quality of education through Sarva Siksha Abhiyan. The Government through this budget proposes to provide architecture to 10 private and 10 public institutions, so that, they emerge as world-class Teaching and Research institutions. Higher Education Financing Agency to be set up with initial corpus base of Rs 1000crores.
New health protection scheme will provide health cover up to Rs 1lakh per family. For senior citizens an additional top-up package up to Rs 30,000 will be provided. The Government through PPP mode proposes to start ‘National Dialysis Services Programme’ under National Health Mission.
The Union Budget has allocated Rs 1804 crore for skill development and in order to do this 1500 Multi Skill Training Institutes are to be set up .The Government of India in partnership with industry and the academia proposes to set up National Board for Skill Development Certification.
In the field of job creation 100 Model Career Centres are to be operated by the end of 2016-2017 under National Career Services. Further the Government of India proposes to circulate The Model Shops and Establishment Bill to states .Government will pay contribution of 8.33%for all new employees enrolling in EPFO for the first three years of their Employment and for this an allocation of Rs 1000 crore has been earmarked.
In the social sector, an allocation of Rs 2000 crore has been allocated for L.P.G connections to BPL families. ’Stand Up India’ scheme to facilitate at least two projects per bank branch which is going to benefit 2.5 lakh entrepreneurs. Moreover under ’Stand Up India Scheme ‘,to promote entrepreneurship among SC and ST and women, Finance Minister, Arun Jaitley provided in the Union Budget Rs 500 crore ,which will facilitate 2 such projects per bank branch one for each category of entrepreneur.
Total outlay for infrastructure is Rs 2, 21,246 crore. Total investment in the road sector ,including PMGSY allocation would be Rs 97,000 crore during 2016-17.To boast infrastructure nearly 1000 km of National Highways is to be constructed in 2016-17.Allocation of Rs 5,500 crore is to be raised through bonds by National Highway Authority of India. Unserved and underserved airports are to be revived in partnership with the State Governments The Government of India proposes 100 % FDI through FIPB route in marketing of food produced and manufactured in India.
Many changes are proposed to be introduced in the Banking Sector. Government Stake in IDBI Bank to be brought below 51%. FDI through automatic route will be permitted at 49% in the insurance sector and pension sector and up to 100% in the asset reconstruction companies. For banking recapitalisation Rs 25,000 crore has been set aside which is below than expected. Amount sanctioned under Pradhan Mantri Mudra Yojana has been increase to Rs 18, 0,000 crore. The Government of India proposes to stable the prices of pulses through a price stabilisation fund of Rs 900 crore. Ek Bharat Shrestha Bharat programme will be launched to link states and districts in an annual programme that consists through exchanges in the areas of culture, tourism, language, trade, travel .etc. The Government of India Proposes to exempt service tax on general insurance provided under ‘Nirbhaya’ Health Insurance Scheme launched by National Trust for persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disability. The Government proposes to set up 11 new branches of Customs, Excise and Service Tax Appellate Tribunal (CESTAT).The NDA Government in order to unearth black money, unveiled a new scheme under which those with undisclosed income and assets in India can come clean by paying a tax of 45% which includes tax at 30%, a surcharge of 7.5% plus a penalty of 7.5%.
In conclusion it can be said that the Union Budget of 2016-17 is a progressive budget presented by the NDA government .At the same time the budget will prove as a road-map to the progress of the nation provided we are able to implement the proposals and promises present in it with utmost sincerity. In a nutshell, it can be said that all depends on how sincerely we try to implement the Budget proposals so that benefits trickle down to the poor and the needy sections of the society to bring happiness to the faces of all the people in the country.
- JNANDEEP BORA