The 2017 Union Budget of India was presented before the
parliament by Mr.Arun Jaitley on 1st Feb, 2017. The optimism of Mr.
Jaitley was evident from his opening speech, backed by the key features of the
Rs.21.47 trillion INR budget. The agenda
set was “TEC – Transform, Energise & Clean India”. Prior to this, we have
seen the Modi government bringing two major reforms that set the tone for the
budget session – Demontetisation & Goods & Services Tax (GST). In the
last fiscal year, GST has been a major factor in building people’s expectations
about the forthcoming budget along with tax slabs, job creation,
recapitalization of bonds, etc. Apart from this, it’s imperative to study the
schemes/initiatives launched by Mr.Narendra Modi in the last 2 years and the
impact that they have been able to create. This will be a major factor in
carving out our expectatios from the budget to be presented on 1st
Feb, 2018 – the last budget of the 2014-19 Modi government.
Major Schemes/ Initiatives:-
Before we delve deep into the various schemes launched so far
and gauge their progress, let’s scrutinize the total budget size and the
expenditures under each header (Fig. 2). It is evident that this government had
allocated close to 44% of the entire budget to the various schemes, a rise from
40.5% in 2015-16. A glance at Fig. 3 would give us an estimate of the amount of
rupee outflow under “Subsidies & Schemes” which is roughly one-third of the
entire government expenditure.
Now that the financials are established, the stage is set for
analyzing the on-ground performance of the initiatives.
Pradhan Mantri Fasal Bima Yojana: This scheme was launched to ensure
continuity in farming by providing insurance coverage to farmers in case of
failure of the notified crop due to calamities, pests or diseases. This scheme
is facing some problems since its inception:
1. Unable to cover majority of farmers
due to huge loan amounts of farmers who are currently availing this scheme.
This defeats the purpose as the non-loanee farmers are in greater need of
coverage due to their huge lease rents and high costs of cultivation.
2. The farmers are not being notified
before the premiums are deducted. The private insurance companies haven’t been
able to perform any better than their government counterparts and almost 58% of
the Rs.17,184 cr allocated has been use to fill their coffers.
This year’s budget is likely to increase the allocation to
Rs.13,000 cr. This will ensure that the farmers get full coverage at the
expense of a nominal premium.
Pradhan Mantri Gram Sadak Yojana: This scheme
was launched to provide all-weather access to unconnected habitations. The
target to achieve this has been forwarded by 3 years to 2019. But there are
some problems which need to be addressed:
government hasn’t spent even 26% of the allocated fund and 60% of works that
have been declared complete have incomplete drainage works. The ones which are
complete aren’t sustainable in nature due to their sub-standard quality
coordination and planning among departments is questionable. Roads that were
supposed to be constructed under this scheme were already in place by some
other department under a different scheme. This calls for better monitoring by
budget is likely to see a spending of approx. Rs. 1,00,000 crore on new roads
in LWE areas. Also, an additional Rs.11,000 cr will be allocated to roads in
LWE through in PMGSY.
Pradhan Mantri Mudra Yojana: This scheme
was set up to provide funding to non-corporate, non-farm sector income
generating activities of micro and small enterprises of credit limit less than
recent times, it has come under purview due to:
1. MUDRA banks
are already having a number of able competitors – the refinancing agencies.
These agencies have not been able to provide money to the small businesses. So,
focus should have been on restricting these agencies instead of creating a new
2. Conflict of
interest arising out of financing micro and small businesses while setting down
policies for financing and regulating them at the same time
government can do away with Mudra bank and instead, create small banks to
finance small businesses. Since the MFIs have now come under both the RBI as
well as Mudra, so that creates a fresh set of problems. This year’s budget will
see a special focus on improvement of infrastructure and subsidies for the
agriculture and the manufacturing sectors.
Gandhi National Rural Employment Guarantee Act): This scheme is aimed at guaranteeing the “right to work”.
This will enhance livelihood security in rural areas by providing a minimum of
140 days if wage employment to unskilled laborers. A corpus of Rs.48000 cr was
aloocated to this scheme in FY 2017.
Delays in payment and the number of
working days being only 40% of what was promised earlier; differently abled
people are still unemployed
Government has been unable to
demand and to stop corruption which reflects
the lack of proper accountability mechanisms Also, fakes job cards and
muster rolls are prevalent and the Gram Panchayat, not the Disctrict Administration, Is taking
Labour movement is mitigated and
the poor is suffering from inflation and durable assets are rarely created.
Non-uniform allocation of work:
richer sates like Tamil Nadu, AP getting more work but more demand exists in
Skill India & MNREGA cannot
Finance Minister Arun Jaitley may increase allocation for
MNREGA by a fourth to nearly Rs 60,000 crore for the financial year 2018-19, as
a part of the NDA government’s larger plan to focus specifically on the
country’s rural sector, amid concerns over rising agrarian crisis.
Awaas Yojana – Gramin: It is a social welfare flagship programme which intends to provide
housing for the rural poor in India. The target set by the government is to
complete 1 crore new houses by 31st March, 2019 and half of these
are to be completed by 31st March, 2018. In order to do so, the
expectations from the government are as follows:
Single-window clearances to prevent procedural hindrances
Merging with the real estate sector