Key Features of Budget 2015-2016

Key Features of Budget 2015-2016:

After inheriting an economy with sentiments of “doom and gloom” with adverse macroeconomic indicators, nine months have seen at turn around, making India fastest growing large economy in the World with a real GDP growth expected to be 7.4% (New Series).
Macro-economic stability and conditions for sustainable poverty alleviation, job creation and durable double digit economic growth have been achieved.

Three Key achievements:

Financial Inclusion - 12.5 crores families financially mainstreamed in 100 days.
Transparent Coal Block auctions to augment resources of the States.
Swachh Bharat is not only a programme to improve hygiene and cleanliness but has become a movement to regenerate India.
Game changing reforms on the anvil:

STATE OF ECONOMY:

CPI inflation projected at 5% by the end of the year, consequently, easing of monetary policy.
Monetary Policy Framework Agreement with RBI, to keep inflation below 6%.
GDP growth in 2015-16, projected to be between 8 to 8.5%.
Housing for all - 2 crore houses in Urban areas and 4 crore houses in Rural areas.
Basic facility of 24x7 power, clean drinking water, a toilet and road connectivity.
Electrification of the remaining 20,000 villages including off-grid Solar Power- by 2020.
Providing medical services in each village and city.
To strengthen rural economy - increase irrigated area, improve the efficiency of existing irrigation systems, and ensure value addition and reasonable price for farm produce.
To make India, the manufacturing hub of the World through Skill India and the Make in India Programmes.

Fiscal Roadmap:

Government firm on journey to achieve fiscal target of 3% of GDP.
Accordingly, journey for fiscal deficit target of 3% will be achieved in 3 years rather than 2 years. The fiscal deficit targets are 3.9%, 3.5% and 3.0% in FY 2015-16, 2016-17 & 2017-18 respectively.
Need to view public finances from a National perspective and not just the perspective of the Central Government. Aggregate public expenditure of the Governments, as a whole can be expected to rise substantially.
Disinvestment to include both disinvestment in loss making units, and some strategic disinvestment.

Good governance:

Need to cut subsidy leakages, not subsidies themselves. To achieve this, Government committed to the process of rationalizing subsidies.
Direct Transfer of Benefits to be extended further with a view to increase the number of beneficiaries from 1 crore to 10.3 crore.

Agriculture:

‘Paramparagat Krishi Vikas Yojana’ to be fully supported.
‘Pradhanmantri Gram Sinchai Yojana’ to provide ‘Per Drop More Crop’.
Rs.5, 300 crore to support micro-irrigation, watershed development and the ‘Pradhan Mantri Krishi Sinchai Yojana’.
Rs.25,000 crore in 2015-16 to the corpus of Rural Infrastructure Development Fund (RIDF) set up in NABARD; Rs.15,000 crore for Long Term Rural Credit Fund; Rs.45,000 crore for Short Term Co-operative Rural Credit Refinance Fund; and Rs.15,000 crore for Short Term RRB Refinance Fund.
Target of Rs.8.5 lakh crore of agricultural credit during the year 2015-16.
Focus on improving the quality and effectiveness of activities under MGNREGA.
Need to create a National Agriculture Market for the benefit farmers, which will also have the incidental benefit of moderating price rises. Government to work with the States, in NITI, for the creation of a Unified National Agriculture Market.

Funding the Unfunded:

Micro Units Development Refinance Agency (MUDRA) Bank, with a corpus of Rs.20,000 crores, and credit guarantee corpus of Rs.3,000 crores to be created.
MUDRA Bank will be responsible for refinancing all Micro-finance Institutions which are in the business of lending to such small entities of business through a Pradhan Mantri Mudra Yojana.
A Trade Receivables discounting System (TReDS) which will be an electronic platform for facilitating financing of trade receivables of MSMEs to be established.
Postal network with 1,54,000 points of presence spread across villages to be used for increasing access of the people to the formal financial system.
NBFCs registered with RBI and having asset size of Rs.500 crore and above may be considered for notifications as ‘Financial Institution’ in terms of the SARFAESI Act, 2002.

From Jan Dhan to Jan Suraksha:

Pradhan Mantri Suraksha Bima Yojna to cover accidental death risk of Rs.2 Lakh for a premium of just Rs.12 per year.
Atal Pension Yojana to provide a defined pension, depending on the contribution and the period of contribution. Government to contribute 50% of the beneficiaries’ premium limited to Rs.1,000 each year, for five years, in the new accounts opened before 31st December 2015.
Pradhan Mantri Jeevan Jyoti Bima Yojana to cover both natural and accidental death risk of Rs.2 lakh at premium of Rs.330 per year for the age group of 18-50.
A new scheme for providing Physical Aids and Assisted Living Devices for senior citizens, living below the poverty line.
Unclaimed deposits of about Rs.3,000 crores in the PPF, and approximately Rs. 6,000 crores in the EPF corpus. The amounts to be appropriated to a corpus, which will be used to subsidize the premiums on these social security schemes through creation of a Senior Citizen Welfare Fund in the Finance Bill.

GSDUNIA