The CPI inflation has come down to 5.4% from 9 plus, and its a huge relief for the public, said Finance minister Arun Jaitley at Union Budget 2016-17. IPER organised a live session of the same for its MBA and PGDM students.
For those,who don’t understand budget or just interested in the gist, the jottings below might be helpful.
Why Budget ?
Most large public and private organizations, and many smaller ones, prepare budgets in order to manage their finances properly. Governments too create budgets to provide facilities and public services to meet their citizens’ needs that are paid for with public funds. Simply put, every government has certain objectives to fulfill and therefore it prepares a budget. Government budget helps in many ways, such as,
a) Managing Resources
b) Balancing income and wealth
c) Bringing in economic stability
d) Managing Public Enterprises
e) Managing Economic Growth and
f) Reducing regional disparities.
Thus, the budget is the most important economic policy instrument for governments. It reflects a government’s social and economic policy priorities more than any other document, translating policies, political commitments, and goals into decisions on where funds should be spent and how funds should be collected.
A well-functioning budget system is vital to the formulation of sustainable fiscal policy and facilitates economic growth.
Budget 2016-17: Highlights [references/excerpts taken from The Hindu ]
- Tax : Pollution, Infrastructure and agriculture cess to be levied, Excise duty raised from 10 to 15 per cent on tobacco products other than beedis, SUVs, Luxury cars to be more expensive, Limited tax compliance window from Jun 1 – Sep 30 for declaring undisclosed income at 45% incl. surcharge and penalties etc.
- Personal Finance : Existing income tax slabs to remain, Benefits to those living in rented houses, additional exemption of Rs. 50,000 for housing loans up to Rs. 35 lakh, provided cost of house is not above Rs. 50 lakh, service tax exempted for housing construction of houses less than 60 sq. m
- Social : Rs. 38,500 crore for Mahtma Gandhi MGNREGA for 2016-17,Swacch Bharat Abhiyan allocated Rs.9,500 crores, hub to support SC/ST entrepreneurs, LPG connections to be provided under the name of women members of family, grants to gram panchayats and municipalities – a quantum jump of 228%, urban clusters to be set up under Shyama Prasad Mukherji Rurban Mission etc.
- Health : Basic dialysis equipment gets some relief, new health protection scheme for health cover upto 1 lakh per family, Senior citizens will get additional healthcare cover of Rs 30,000 under the new scheme, PM Jan Aushadhi Yojana to be strengthened, 300 generic drug store to be opened etc.
- Education : Scheme to get Rs.500 cr for promoting entrepreneurship among SC/ST,10 public and 10 private educational institutions to be made world-class, Digital repository for all school leaving certificates and diplomas, Rs. 1,700 crore for 1500 multi-skill development centres, Entrepreneurship training to be provided across schools, colleges and massive online courses etc.
- Energy : Rs. 3000 crore earmarked for nuclear power generation, deepwater gas exploration incentivised etc.
- Investments and infrastructure : Rs. 27,000 crore to be spent on roadways, current construction pace is 100 kms/day.
- Agriculture : 28.5 lakh heactares of land will be brought under irrigation,5 lakh acres to be brought under organic farming over a three year period.
- Banking : Banks get a big boost: Rs 25,000 crore towards recapitalisation of public sector banks. Jaitley says: Banking Board Bureau will be operationalised, we stand solidly behind public sector banks,General Insurance companies will be listed in the stock exchange,Govt to increase ATMs, micro-ATMs in post offices in next three years etc.