"We have the mandate of 'sab ka saath, sab ka vikaas'. We have taken up the challenge. Not wise to expect too much of a Government in office for 45 days," said Arun Jaitley while presenting the Union Budget in Lok Sabha.
The Narendra Modi Government made its priority on healthcare, education, roads, infrastructure, FDI, removal of retrospective taxes, approval of Goods and Service taxes(GST), welfare of women and girl child, farmers, Kashmiri migrants, backward classes, senior citizens.
High growth, low inflation target:
Targeting high growth and low inflation, Modi Government admitted that bitter pills is necessary to resuscitate the ailing economy. If the Government is able to curb inflation and achieve the target of high growth with prudent fiscal policies, India has the potential to become vibrant and competitive economy.
FDI in Defence, Insurance
In a bid to bring much-awaited relief to capital-starved private insurance sector, the Modi Government also proposed Foreign Direct Investment(FDI) to 49 per cent from 26 per cent.
"The insurance sector is investment starved. Several segments of insurance sector need expansion. The composite cap of the insurance sector is proposed to be increased to 49 per cent from the current level of 26 per cent with full management and control through the FIPB route," Jaitley said.
49 percent FDI would help insurance firms to get much needed capital from overseas partners.
In a parallel move, the Government allocated Rs 2.29 lakh crore for the Defence Ministry in the Budget, marking an increase of around 12.5 per cent from the last fiscal as it raised the FDI limit in the Defence sector up to 49 per cent. Raising FDI in Defence is a positive move, as it will strengthen our Defence with modernization of armed forces. The Modi Government also allocated sum of 1000 crore to do away with the anomalies with One Rank One Pension scheme.
The Government with a massive mandate made clearly education as the top priority and indicated setting up of several IITs and IIMs in several states. The Government even proposed to ease norms for education loans.
Mentioning the economic challenges facing the Modi Government, Finance Minister Arun Jaitley emphasized on fiscal prudence with a need to generate more resources. Keeping in mind the high rate of people below poverty line in India, Jaitley targetted several anti-poverty programmes and focused on minimum Government with maximum governance.
Focusing on infrastructure development the Modi Government proposed 100 small cities and allocated Rs 7060 crores for the same. Jaitley also proposed National Housing Banking programme and set aside Rs. 8000 crore for this programme. To improve medical infrastructure, the Government proposed to set up 4 more AIIMs in Andhra Pradesh, West Bengal, Maharashtra and Purvanchal. Rs 500 crore was allocated for digital India program for broadband connectivity at village level and Rs 100 crore was allocated for metro project in Lucknow. Expansion of prestigious institutions like IITs and IIMs were also in the offing . New airports was also proposed to be developed through PPP mode in tier-II and tier-III cities. Govt sets aside Rs 2,250 crore to improve weather infrastructure.
Rs 7060 crores allocated for 100 small cities in the Budget
Tourism: Government announced Rs 100 crore for development of Archaeological sites with Gaya to be developed as world class tourist spot. Rs 200 crore was allocated for preserving heritage characters of cities like Mathura and Agra in order to boost tourism.
GST in the offing
The Finance Minister brought an end to retrospective taxation and cited of arriving on a final solution on introduction of Goods and Services Tax(GST). The much debated GST is expected to streamline tax administration and result in higher tax collection for centre and States.
Income Tax exemption:
There was no change in income tax rate but personal income tax exemption limit raised from Rs 2 lakh to Rs 2.50 lakh bringing much relief to the common man.
Kisan Vikas Patras to make a return:
At a time when the country is facing unavoidable challenge of drought like condition due to poor monsoon, the Modi budget emphasised on the need for agricultural development. The Budget proposed to set up agri-infrastructure fund at a cost of Rs 100 crore. Government sets aside Rs 200 cr for setting up of agriculture university in AP and Rajasthan, and horticulture university in Haryana, Telangana.
'Beti Bachao, Beti Padhao' scheme;
In order to check the increasing crime against women and girl child in the country the Budget proposed Beti Bachao, Beti Padhao' scheme. The special scheme will encourage girl child education and safety of women for which 100 crore was allocated. The move of gender main-streaming as compulsory in School curriculum is a welcome move. India still lacks child education, specially girl child in States like Haryana, Rajasthan and only education in direction can prove fruitful. The budget also proposed Crisis Management Center for women at Delhi for which funds will be provided from Nirbhaya fund(proposed by the predecessors)
'Jal Marg Vikas' project on river Ganga :
Cleaning Ganga was one of priority for the Modi Government who got an emphatic victory from his Varanasi constituency. NRI fund for conservation of river Ganga to be set up. Rs 50 crore set aside for modernisation of Ghats in places like Varanasi and Patna. Rs 100 crore was allocated for river ghat development . Government sets aside Rs 100 for inter-linking of rivers. 1,620-km Ganga inland waterway development from Haridwar to Haldia to be completed in 6 years at a cost of Rs 4,200 crore.
What Budget has for North-East India:
In a first of this kind, Govt announced 24x7 channel "Arun Prabha" for NE region. Rs 100 crore set aside for development of organic farming in north east region. Also Budget proposed to set up sports university in Manipur. North-East has always been segregated in the past from the mainstream but certain proposals for the North-East development is good modinomics.
400 crore in total was allocated for the sports development. Rs 100 crore set aside for training on sportspersons for the Asiad Games. Rs 200 crore upgrading indoor and outdoor stadium in
Jammu and Kashmir.
The Government though tried to do away with populist measures, but was not able to reach a clarity on fiscal deficit. Admitting low GDP growth & large subsidy burden with a target of 4.1% fiscal burden a daunting task, the Government focused in reducing deficit to 3.6 per cent.
"I have decided to accept this challenge - one fails when one stops trying," Jaitley said. He said the budget deficit would be reduced to 3.6 per cent in the following two fiscal years. With the deficit already approaching half of the annual target just three months into the fiscal year, they expected him to raise the borrowing target to 4.4 per cent for the current fiscal year, which ends in March 2015.
What is there in the budget for the common man:
The common man and the poor got much relief with exemption of customs duty on certain products. Some of the goods which got cheaper are LED/LCD TVs below 19 inch, footwear, soaps, E-books, laptops, tablets, LED lights, HIV/AIDS drugs and diagnostic kits. However, at the same time tax rates were raised on Cigarettes and tobacco products to lessen their consumption.
The proposals and promises in the Budget are words, words and words, but need of the hour is action which can only help to revive the economy. The Budget can be justified only if the Government delivers with unwavering resolve.