Following the 14th Finance Commission award, the devolution to States is budgeted for Rs. 5,23,958 crore. Overall transfers to States are estimated at Rs. 9,19,842 crore.
In what came as a surprise after Prime Minster Narendra Modi’s remarks about the MGNREGS in Parliament on Friday, the budget raised the allocation for the UPA government’s flagship scheme. The overall rural development budget is estimated at Rs. 77,526 crore.
The Finance Minister listed five major challenges the Indian economy is facing — agricultural income under stress, weak private sector investments in infrastructure, slump in manufacturing and a resource crunch in view of higher devolution in taxes to States. In addition, he said, there was the challenge of maintaining fiscal discipline.
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Proposing rationalisation of subsidies, Mr. Jaitley said: “Well-intentioned schemes introduced in the past, have often been ill-targeted, riddled with leakages and delivered with inefficiency… The same is true of subsidies…Subsidies are needed for the poor and those less well off.”
Mr. Jaitley also spelt out 13 targets – similar to the UPA Government’s Bharat Nirman flagship scheme — to be met by the 75th year of Indian independence, 2022, which he called the ‘AmrutMahotsav.’ These include 2 crore houses in urban areas and 4 crore houses in rural areas each with 24-hour power supply, clean drinking water, a toilet, and connected to a road. Also included are access for at least one member per household to the means for livelihood and substantial reduction of poverty.
The budget proposed a universal social security net, which could benefit the over 80 crore Indians below 35 years of age. “A large proportion of India’s population is without insurance of any kind — health, accident or life. Worryingly, as our young population ages, it is also going to be pension-less,” Mr. Jaitley said, proposing the universal social security system for all Indians, especially the poor and the under-privileged comprising three separate schemes.
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A controversial proposal, however, was the creation of a Senior Citizen Welfare Fund, in the Finance Bill, for appropriation of unclaimed deposits of about Rs. 3,000 crore in the Public Provident Fund, and approximately Rs. 6,000 crore in the Employees Provident Fund corpus.
The budget proposed a new comprehensive law providing for a jail term of up to 10 years for hiding foreign assets and a 300 per cent penalty on undisclosed income and assets abroad, to intensify the government’s battle against black money.