The Union Budget 2016-17 was very impressive as farmers and poor are considered but middle class have been totally ignored. It seems that Finance Minister Arun Jaitley unveiled it for farmers and the poor announcing a string of farm measures, rural aid and health programmes in a strategy shift aimed at boosting the ruling BJP’s prospects in crucial state elections to be held soon. Jaitley also made major announcement that he would help more than two crore taxpayers. Moreover, till date it is the perception that Modi government is pro-corporate government and is doing nothing for poor people, farmers and villages. This budget might prove that perception as illusion. The Sensex traded choppily through his speech sinking at one point by 660 points before paring some losses. Jaitley said the government would stick to the roadmap for fiscal consolidation and fixed next year’s fiscal deficit target at 3.5 per cent of the GDP. There is worry on how the government will fund the big social sector spends announced. Jaitley pledged to “spend prudently and wisely for the people, especially for the poor and downtrodden.”
Modi’s landslide election victory in 2014 raised hopes that he would draw a line under India’s socialist past, cut welfare and reduce the government’s role in business. In its first two years in power, his government splurged on roads and railways at the expense of welfare programmes in the hope of creating economic stimulus. Modi’s gamble was that infrastructure investment would yield dividends for the poor and the rural community. Four in 10 Indians rely directly on farming for their livelihoods, the government estimates.
The minister has announced a 228 per cent jump in funds for rural transformation, allocating Rs. 38,500 crores for MNREGA, a rural employment scheme that was a flagship of the previous Congress-led UPA government. Jaitley said if the money was spent, it would be the highest ever spent on MNREGA. Among major announcements was one for LPG connections for poor women, which he said would benefit 1.5 crore households this year. He raised the deduction limit for those with total income of less than Rs. 5 lakh from 2000 to 5000. He has also announced relief for taxpayers who do not own a house and don’t get house rent allowance from employers.
Jaitley described Asia’s third-largest economy as a bright spot in a gloomy landscape and reiterated a forecast that it would grow by 7.6 per cent in the fiscal year that is drawing to a close. However, he said the government wanted to ensure that the benefits of growth were more widely shared among India’s 1.3 billion people.
The spending package for the 2016/17 fiscal year from April 1 marks a radical shift from Prime Minister Narendra Modi’s initial focus on investing in infrastructure in a bid to kick-start private-sector investment that remains weak.
Jaitley described his three priorities as: Strengthening India’s firewalls by ensuring macroeconomic stability and prudent fiscal management; driving growth through domestic demand; and reforms to boost economic opportunity.
Key areas of policy focus would be farming, social reforms, infrastructure and recapitalizing India’s banking system.
Rising rural distress after back-to-back droughts and a recent heavy election defeat in a largely agricultural state have upset that calculus. It has also left Modi’s ‘nationalist’ ruling party open to attacks by the opposition, who use a Hindi phrase to deride Modi for leading a “suit, boot ki sarkar” that only works in the interest of the rich.
Jaitley’s reeled off a list of $16 billion in measures targeted at the countryside, including spending on a job creation scheme, farmers’ welfare and building of rural roads.
This budget targeted a total of $130 billion in credit to farmers. In a move that capitalises on the current demographic advantages, the Finance Ministry has proposed a cash purse of Rs. 1,700 crore to for its plan to impart skill training to one crore youth over the next three years. 1,500 multi-skill training centres will be set up under the Pradhan Mantri Kaushal Yojana of the Skill Development and Entrepreneurship Ministry. A proposal to link the national career service to state employment exchanges to improve employment avenues is also in the works.
The National Skill Development Mission has already trained 76 lakh youth, the Minister said, while presenting the general budget in the Parliament.
Aiming to double farmers’ income by 2022, Finance Minister Arun Jaitley on Monday announced an allocation of nearly Rs. 36,000 crore for the farm sector while raising the agri-credit target to Rs. 9 trillion for the next fiscal.
He also allocated Rs. 15,000 crore for interest subvention on the farm credit, Rs. 5,500 crore for the new crop insurance scheme and Rs. 500 crore to boost pulses output. Jaitley also said that a unified agricultural market will be launched on 14 April and soil health cards will be provided to all 14 crore farmers by March 2017.
To reduce the burden of loan repayment on farmers, a provision of Rs. 15,000 crore has been made in the budgetary estimate of 2016-17 towards interest subvention. 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. Stating that irrigation is critical for increasing the agricultural production and productivity, he said, “The Pradhan Mantri Krishi Sichai Yojana has been strengthened and implemented in mission mode. 28.5 lakh hectares will be brought under irrigation in this scheme. A dedicated long-term irrigation fund will be created in NABARD with an initial corpus of Rs. 20,000 crore to build irrigation facilities. The finance minister also lauded the 75 lakh middle class and lower-middle class families that gave up their LPG subsidy on a request from the prime minister. In another green measure, the government said that it will not provide printed copies of the Union budget. Over all, this budget can save BJP’s face for upcoming elections but working class feels cheated.
(Any suggestions, comments or dispute with regards to this article send us on [email protected])