Nuances of The Union Budget 2016-17

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The Union Budget 2016-17 which was announced on Monday has caught the attention of people from all sections of the society. Weeks and months prior to the announcement of the Budget, government gets in close consultation with pressure groups and associations to understand their sentiments and demands.

This year's Budget can be termed as pro-farmer and pro-poor for it has mainly focused on the issues of growing agricultural crisis, and rural economy distress which has already resulted in 57 farmer suicides in Maharashtra in 2016 and 3,228 in 2015. Also, it must be remembered that India continues to be a chiefly agrarian society and lives of farmers, including agricultural labour, cannot be ignored. The government has provided an enhanced outlay of Rs 2.75 lakh crore for social sector, farmer welfare and rural sector - this figure includes about Rs 36000 crore towards farmer welfare programmes. Allocation for MNREGA has increased compared to 2015-16. This is crucial in two ways. One, it will provide work to the farmers in drought-prone areas. Two, it may provide an impetus to MNREGA scheme which was failing to guarantee 100 day work and complete payment of wages. Further, in order to generate more revenue, government has taken many steps.

For the middle-class, the budget brought little to no relief. Keeping the fiscal deficit rate fixed at 3.5% of GDP, Kisan Kalyan Cess (0.5%) has been introduced. This makes the service tax to be levied at 15% (from the previous 14.5%) causing an extra burden for middle-class people. Cost of cars, air travel, cigarettes, dining in hotels and restaurants have increased. An additional surcharge if 1% is introduced for cars priced at over Rs 10 lac. It is clear from the budget that the government wants affordable people to pay more, the super-rich even more. Investment atmosphere is likely to be affected by these. Also, keeping up with its promise, the budget reduced professional tax from 30% to 29% (to be brought down to 25% in four years).

Government has taken many poor-friendly decisions. Free dialysis at District hospitals calls for more physical infrastructure and training of nephrologists, free LPG connection for BPL families, lowers cost of sanitary pads, among others, is a welcome step. Budget for Women and Child welfare has increased from the previous year. An allocation of Rs 20,000 crore in education sector is a step towards Right to Education.

All in all, this year's Budget will force the opposition in the Parliament to strike off the phrase "Suit Boot ki Sarkar" from his limited vocabulary.

Posted by: Utkarsh Singh. in General | Date: 20/04/2016

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