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Budget 2017-18: Civil Services Mentor Magazine: March - 2017

Budget 2017-18

Budget is a socio economic document which is gien under Art 112 of Constitution. The budget is prepared by the budget division in department of economic affairs, Ministry of Finance. Budget making itself is not a one day issue, it passes through various stages. In total Budget goes through following processes. First to come up is Formulation of Budget, then budget would be approved by the legislature, finally the execution and auditing of the Budget ammount takes place. Process of budget making itself takes more than six months. The five year plans are referred to discuss the gross budgetary support from the union government to support the annual plans. The real test of the budget maker is to pass the legislation which fiscally disciplines the government. The fiscal responsibility and Budget management (FRBM) act sets the target of keeping the revenue deficit nil and fiscal deficit below 3%. The process of budget takes final shape in around month of January when the revenue. By convention the union budget is presented on the last day of February in the Lok Sabha. The budget is tabled at the Rajya Sabha only after the finance minister completes its speech in the Lok Sabha. A broad discussion takes place at this stage without any voting. Then the house is adjourned.

Budget continued the path setup in last budget of improving the fiscal discipline and making legislative and tax reforms. This was the first budget presented after the reforms introduced in the budget process. This was the first time when budget was presented on end of Jan month so that it gives ministries full financial year. Also this year budget incuded railway budget in itself and a single budget was presented. Another reform which was introduced this year is merger of plan and non plan expenditure. However government has nicely maintained its fiscal discipline. Along with rural economy government's focus on improving the infrastructure of the country has continued from last year's budget.

Important points of budget are given below :

Inflation brought under control. CPI-based inflation declined from 6% in July 2016 to 3.4% in December, 2016

Economy has moved on a high growth path. India's Current Account Deficit declined from about 1% of GDP last year to 0.3% of GDP in the first half of 2016-17. FDI grew 36% in H1 2016-17 over H1 2015-16, despite 5% reduction in global FDI inflows. Foreign exchange reserves have reached 361 billion US Dollars as on 20th January, 2017

CHALLENGES IN 2017-18

World economy faces considerable uncertainty, in the aftermath of major economic and political developments during the last year.
The US Federal Reserve's , intention to increase policy rates in 2017, may lead to lower capital inflows and higher outflows from the emerging economies
Uncertainty around commodity prices, especially that of crude oil, has implications for the fiscal situation of emerging economies.

ROADMAP & PRIORITIES

Agenda for 2017-18 is : "Transform, Energise and Clean India" - TEC India TEC India seeks to

Transform the quality of governance and quality of life of our people;
Energise various sections of society, especially the youth and the vulnerable, and enable them to unleash their true potential; and
Clean the country from the evils of corruption, black money and non-transparent political funding

Ten distinct themes to foster this broad agenda:

Farmers: committed to double the income in 5 years;

Rural Population : providing employment & basic infrastructure;

Youth : energising them through education, skills and jobs;

The Poor and the Underprivileged : strengthening the systems of social security, health care and affordable housing;

Infrastructure: for efficiency, productivity and quality of life;

Financial Sector : growth & stability by stronger institutions;

Digital Economy : for speed, accountability and transparency;

Public Service : effective governance and efficient service delivery through people's participation;

Prudent Fiscal Management: to ensure optimal deployment of resources and preserve fiscal stability;

Tax Administration: honouring the honest.

Some of the imprtant initiatives for specific sectors are given below;

FARMERS

Target for agricultural credit in 2017-18 has been fixed at a record level of 10 lakh crores
Farmers will also benefit from 60 days' interest waiver announced on 31 Dec 2016
To ensure flow of credit to small farmers, Government to support NABARD for computerisation and integration of all 63,000 functional Primary Agriculture Credit Societies with the Core Banking System of District Central Cooperative Banks.
Coverage under Fasal Bima Yojana scheme will be increased from 30% of cropped area in 2016-17 to 40% in 2017-18 and 50% in 2018-19 for which a
budget provision of ` 9000 crore has been made Coverage of National Agricultural Market (e-NAM) to be expanded from markets to 585 APMCs. Assistance up to ` 75 lakhs will be provided to every e-NAM
A model law on contract farming to be prepared and circulated among the States for adoption

RURAL POPULATION

Aim to bring one crore households out of poverty and to make 50,000 Gram Panchayats poverty free by 2019, the 150th birth anniversary of Gandhiji
Against target of 5 lakh farm ponds under MGNREGA, 10 lakh farm ponds would be completed by March 2017. During 2017-18, another 5 lakh farm ponds will be taken up
MGNREGA allocation to be the highest ever at ` 48,000 crores in 2017-18.
Government has taken up the task of connecting habitations with more than 100 persons in left wing extremism affected Blocks under PMGSY.
All such habitations are expected to be covered by 2019 and the allocation for PMGSY, including the State's Share is ` 27,000 crores in 2017-18.
Allocation for Pradhan Mantri Awaas Yojana - Gramin increased from ` 15,000 crores in BE 2016-17 to ` 23,000 crores in 2017-18 with a target to complete 1 crore houses by 2019 for the houseless and those living in kutcha houses.
A programme of "human resource reforms for results" will be launched during 2017-18 for human resources development in Panchayati Raj Institutions

YOUTH

Innovation Fund for Secondary Education proposed to encourage local innovation for ensuring universal access, gender parity and quality
improvement to be introduced in 3479 educationally backward districts. SWAYAM platform, leveraging IT, to be launched with at least 350 online courses. This would enable students to virtually attend courses taught by the best faculty
Skill Acquisition and Knowledge Awareness for Livelihood Promotion programme (SANKALP) to be launched at a cost of ` 4000 crores. SANKALP will provide market relevant training to 3.5 crore youth
Next phase of Skill Strengthening for Industrial Value Enhancement (STRIVE) will also be launched in 2017-18 at a cost of ` 2,200 crores

THE POOR AND THE UNDERPRIVILEGED

Under Maternity Benefit Scheme ` 6,000 each will be transferred directly to the bank accounts of pregnant women who undergo institutional delivery and vaccinate their children
National Housing Bank will refinance individual housing loans of about ` 20,000 crore in 2017-18
Government has prepared an action plan to eliminate Kala-Azar and Filariasis by 2017, Leprosy by 2018, Measles by 2020 and Tuberculosis by 2025 is also targeted
Action plan has been prepared to reduce IMR from 39 in 2014 to 28 by 2019 and MMR from 167 in 2011-13 to 100 by 2018-2020
To foster a conducive labour environment, legislative reforms will be undertaken to simplify, rationalise and amalgamate the existing labour laws into 4 Codes on (i) wages; (ii) industrial relations; (iii) social security and welfare; and (iv) safety and working conditions.

INFRASTRUCTURE

For transportation sector as a whole, including rail, roads, shipping, provision of ` 2,41,387 crores has been made in 2017-18.
For 2017-18, the total capital and development expenditure of Railways has been pegged at ` 1,31,000 crores. This includes ` 55,000 crores provided by the Government
For passenger safety, a Rashtriya Rail Sanraksha Kosh will be created with a corpus of ` 1 lakh crores over a period of 5 years
Unmanned level crossings on Broad Gauge lines will be eliminated by 2020
'Coach Mitra', a single window interface, to register all coach related complaints and requirements to be launched
By the end of 2017-18, high speed broadband connectivity on optical fibre will be available in more than 1,50,000 gram panchayats, under BharatNet.
A DigiGaon initiative will be launched to provide tele-medicine, education and skills through digital technology
Proposed to set up strategic crude oil reserves at 2 more locations, namely, Chandikhole in Odisha and Bikaner in Rajasthan. This will take our strategic reserve capacity to 15.33 MMT
Second phase of Solar Park development to be taken up for additional 20,000 MW capacity.