Union Budget 2016 aimed at the rural population. The Govt had no choice after 2 failed monsoons, have been causing acute rural distress. It will still be called a political budget saying that that rural India is where the power lies, so the budget is targeted there. Bud rural India is where the crux of our country lies. There is a clear and much-needed emphasis on infrastructure. The biggest disappointment till now has been a lack of willingness to unleash risky and high-impact reforms. But the intent seems to be good and ambitious, but as again, it’s the delivery and execution that will matter. Let’s have a snapshot of the budget speech.
Economic Survey 2015 -16: Prices are lowering, inflation is falling.
Budget – 2016 -17 Inlay and outlay.
Increased Fiscal Prudence:
Co-operative federalism: More power to the states
Min Govt – Max Governance: Companies can now incorporate in a day through amendment of Companies Act. Incentive for ease of doing business. New law for targeted delivery of financial & subsidies etc. using Aadhar framework will be enacted. Reforming passenger traffic by abolishing permit raj will vastly improve urban transport & solve related issues.
Push to social sector: Govt to provide health insurance of up to Rs.1 lakh per family. 300 generic drug stores to be opened
Stress on the Rural Sector. Interests of farmers, poor and vulnerable have been given due consideration. The aim to double the farmer’s income in 5 years is a revolutionary step. Quantum jump of 228% in grants to gram panchayats and urban local bodies in accordance with FFC recommendations.100% rural electrification to be achieved and whole nation targeted to be lit up by 2018 May.
100% rural electrification to be achieved and whole nation targeted to be lit up by 2018 May.
Towards transforming villages to transform life.
Infrastructure: Massive increase in public spending on infrastructure; an increase of 22.5% over the previous year. Rs 55,000 crore allocated for roads and highways; total investment in road sector would be Rs 97,000 core. Including Railways, the total outlay in 2016-17 is planned to be transportation development is 228,000 Crores.
Education, Skills & Job Creation: National Skill Development Mission has imparted training to 76 lakh youth. 1500 Multi-skill training institutes to be set up. Stress on better skills, more opportunities, more jobs.
Taxation: Nothing much for salaried middle class. But they should be happy if their tax money is spent efficiently and for creating assets for the nation.Limit of deduction of rent paid increased from 24,000 p.a. to Rs 60,000 p. a.
NoTax on profits for STARTUPS for 3 years will encourage business mentality & will support them to focus on their business.
Amnesty for tax-evaders on payment of 45% flat on declared income. Blood boils hearing this but the curse of previous Govt. we have to carry keeping in mind that it will bring money outside the system into the system.
Then a “cess” for everything is utterly annoying.
Initiatives for better delivery of public services and enhancing efficiency and quality of life:
Steps towards strengthening the lackluster financial sector: The biggest reform in this sector would be if they fulfill what they promised -> “Govt is willing to go below 51% in PSU banks”.
At the outset, this looks like a budget targeted to the poor and is absolutely not a ‘suit-boot sarkar’s” budget. It has always been Mr. Modi philosophy to be centered around building small, rural, entrepreneurial India to power the economic engine. The biggest achievement of this Modi govt is the adherence to a “rule-based policy decision making” without giving space to crony-capitalism! Hope they stick to it.