E-BOOK : Yojana Magazine, March 2015
E-BOOK : Yojana Magazine, March 2015
CONTENTS
BUDGET 2015-16: IMPACT ON GROWTH, EMPLOYMENT AND WELFARE
D K Srivastava ......................................................................................................... 6
UNION BUDGET 2015-16: A GROWTH-ORIENTED BUDGET
N R Bhanumurthy, HK Amar Nath ........................................................................ 10
SPECIAL ARTICLE
TRUE TO THE SPIRIT OF FEDERALISM
Pravakar Sahoo ...................................................................................................... 13
TRANSFORMING INDIA INTO A GLOBAL MANUFACTURING HUB
Amitabh Kant......................................................................................................... 18
ANALYSING ECONOMIC HEALTH
Ashima Goyal ........................................................................................................ 23
RAIL BUDGET: A BOLD PATH WAY FOR PROGRESS
G Srinivasan........................................................................................................... 28
FOCUS
NATIONAL SKILL DEVELOPMENT PROGRAM: THE WAY AHEAD
Swadesh Singh ...................................................................................................... 33
UNION BUDGET: PROCESSES AND PROCEDURES
Ravindra H Dholakia ............................................................................................. 38
UNION BUDGET 2015-16: THRUSTS ...................................................... 43
SHIFTING ACCOUNTABILITY? READING THE BUDGET FROM WOMEN’S PERSPECTIVE
Neetha N ...................................................................................................... 45
UNION BUDGET 2015-16: EDUCATION RESOURCES & PROVISIONS
Ashish Joshi ........................................................................................................... 50
ADDRESSING AGRICULTURAL ISSUES: NOW, A STATE RESPONSIBILITY
Bhuwan Bhaskar .................................................................................................... 54
BUDGET 2015-16: SOCIAL DIMENSION
Manish Govil ......................................................................................................... 58
MACROECONOMIC POLICY REVIVAL IN MINING AND ENVIRONMENT FEDERALISM: GLIMPSES FROM BUDGET 2015-16
Lekha Chakraborty, Sahil Ravgotra ....................................................................... 62
TAxATION AND FISCAL POLICY SPACE IN INDIA
Rohith Jyothish ...................................................................................................... 66
TRENDS AND IMPLICATIONS OF REVENUE DEFICIT AND FISCAL DEFICIT
Amiya Kumar Mohapatra ...................................................................................... 71
DO YOU KNOW? ............................................................................................. 75
OPENING UP INSURANCE TO MORE FOREIGN EqUITY
Dhiraj Nayyar......................................................................................................... 76
GOODS AND SERVICES TAx: STEPS TOWARDS TRANSFORMATIONAL REFORM
R Kavita Rao.......................................................................................................... 78
UNION BUDGET 2015 AND THE VISION OF CLEAN INDIA
Nirupam Hazra..............................................................................................
Focus on Investment and Growth
The much awaited first full budget of the present government finally arrived amidst considerable speculations. However instead of expected popular announcements, the budget proposed a number of small, but effective steps to promote investment and growth. The Finance Minister tried to address some fundamental issues with the aim of achieving long term sustainable growth with GDP above 8 per cent and making India the fastest growing economy in the world.
Consistent with Government’s vision of inclusive growth, the budget recognized the role of people in a country’s development and made an attempt to empower them to better their own lives. The budget laid
foundation for expanding livelihood and investment opportunities on one hand and building social security system on the other.
Increasing tax deduction limit to ₹ 1.5 Lakhs under New Pension Scheme, allowing tax deduction upto ₹ 25,000 on health insurance premium, announcement of Pradhan Mantri Suraksha BimaYojna and Pradhan Mantri Jeevan Jyoti Bima Yojana to cover death risk of ₹ 2 lakh each for a nominal premium are some major
initiatives in this direction. In order to support programmes for Women Security, Advocacy and Awareness, ₹ 1,000 crore have been allocated to the Nirbhaya Fund in the year 2015-16.
To tap the immense potential of youth population of the country and to enhance their employability, the budget announced a series of initiatives. Several institutes ranging from a senior secondary school within 5 kms of every child to higher institutes of technical and skill education have been proposed to come up in various parts of the country. While ‘Nai Manzil’ aims at integrating education and livelihood for Minority Youth, Micro Units Development Refinance Agency (MUDRA) Bank seeks to refinance Micro-Finance Institutions with Priority to SC/ST youth. Self-Employment and Talent Utilisation (SETU) programme will support all aspects of startup businesses, and self-employment activities, particularly in technology-driven areas. National Skills Mission will consolidate skill initiatives spread across several ministries and allow standardization of procedures and outcomes.
To give a boost to ‘Make in India’ campaign, the budget announced measures to make it simpler and cheaper to set up manufacturing projects. Deferment of GAAR (General Anti Avoidance Rules) with grand fathering provisions, reduction in corporate tax from 30 percent to 25 per cent over the next four years and proposals to rationalization of tax structure sends out a positive message that India is all for stable and predictable tax regime. Implementation of uniform Goods and Service Tax (GST) from April 1, 2016 will weed out tax inefficiencies which exist in the system today and pave the way for GDP growth. Another major focus is on facilitating 'ease of doing business' in India with simplification, rationalization and digitization of processes.
Recognising the need for a robust Infrastructure to support these initiatives, the budget proposed an enhanced outlay of ₹ 70,000 crore for the sector, apart from creating a National Investment Infrastructure Fund (NIIF) with annual inflow of ₹ 20,000 crore, and introduction of tax free infrastructure bonds in rail, road and irrigation sectors.
The budget also sought to ensure flow of funds by tapping dormant resources and directing them into the formal financial system. While Gold Monetisation Scheme, development of sovereign gold bond and introduction of an Indian gold coin will help in translating gold savings into economic investments, proposal to bring about a comprehensive law on black money with provision of 10 yrs imprisonment and 300 per cent penalty will help in leveraging hidden and unaccounted monies. Further proposal to abolish wealth tax and to impose 2 per cent surcharge on super rich with an annual income of more than ₹ 1 crore will add to tax collections.
To meet the budget deficit Finance Minister proposed an increase in the service tax rate from 12.36 to 14.00 per cent which would impact individuals spending. Though unpopular, the move will be rationalized once GST is implemented.
Last but not the least, the budget accepted recommendations of 14th Finance Commission and raised States’ share in total divisible pool of tax revenues from 32 per cent to 42 per cent. This will not only increase the pool of resources available to the states but also raise flexibility to help states design, implement and finance programmes according to their specific needs.
In summary, the budget has taken optimistic steps towards long term welfare of the people and laid a road map for the country to move ahead and make a difference in the life of every Indian. The budget is forward looking with great statement of intent.
Budget 2015-16: Impact on Growth, Employment and Welfare
UDGET 2015 -16 of the central government sets out ambitious short and long term targets relating to growth and welfare. There is a direct link between growth, employment and people’s welfare. Growth creates
employment opportunities, which lead to increased earnings and therefore to improved welfare. In this context, the budget of the central government for 2015-16, can be examined for its impact on employment through
growth as well as through more direct employment-promoting policy initiatives.
Growth and Welfare: Short-term and Long Term Targets
For growth, the target for 2015-16 is achieving an 8 to 8.5 per cent growth. The longer term target is to achieve a double digit growth, the minimum of which would be 10 per cent. On welfare, the budget wishes to achieve
by 2022, that is, by the 75th anniversary of our independence, 13 specific objectives as indicated below:
1. Ensuring housing for all by completing 2 crore houses in urban areas and 4 crore in rural areas;
2. Ensuring that each house has basic facilities of 24-hour power supply, clean drinking water, a toilet, and road connectivity;
3. Making sure that each family has at least one earning member;
4. Substantially reducing poverty;
5. Electrification of all villages;
6. Connecting all habitations by all weather roads;
7. Providing medical services in each village and city;
8. Educating and skilling youth;
9. Increasing agricultural productivity;
10. Ensuring communication connectivity to all villages.
11. Skilling young population and making in India;
12. Encouraging entrepreneurship in India; and
13. Developing India’s Eastern and North Eastern regions.
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Courtesy : Yojna Magazine