There have been few sweeping reforms in the past two years that the government has been promising.
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Jaitley on Monday in the Indian Parliament listed $16 billion in government measures targeted at rural India, including spending on a job creation scheme, farmers’ welfare and building of rural roads.
Many think it will soften or delay its ambitious target to cut the fiscal deficit to 3.5 per cent of GDP in 2016-2017.
House rent deduction slab has also been raised from Rs 20,000 to Rs 60,000.
Jaitley announced a capital injection of just $3.6 billion into public sector banks in the coming fiscal year – a fraction of total needs that his economic adviser, Arvind Subramanian, estimated at $26 billion in his pre-budget report.
“Recapitalization of banks also to be done during next fiscal year”, he said, as much concern have emerged over the quantum of exposure of Indian scheduled banks in terms of gross non-productive assets, re-cast loans and write-offs, which amounts to Rs.9.5 lakh crore.
“I have weighed the policy options and decided that prudence lies in adhering to fiscal deficit targets”, he said.
The allocation for the scheme for the Benefit of North Eastern Area, has been revised to Rs 144.98 crore this year as compared to Rs 150.23 crore last year.
These 89 projects required Rs 17,000 crore next year and Rs 86,500 crore next five years.
This announcement shows that the government is really looking forward to uplift and support Dalit and women entrepreneurs.
In this regard, he said, the government appreciated the 75 lakh middle class and lower middle class families for willingly giving up cooking gas subsidy. “It will also provide employment for rural youth in the supply chain of cooking gas”.
He outlined what he called the government’s “nine pillars” of a “transformative agenda” for the economy.
“The implementation of the Pay Commission recommendations and the “One Rank One Pay” scheme will put additional burden on expenditure”, it added.
Allocation of Pradhanmatri Gram Sadak Yojna to be increased to 19,000 crore. Jaitley announced a spend of Rs 850 crores to develop a National Centre for Indigenous breeds to enhance the dairy sector.
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Finance Minister leaves for Rashtrapati Bhavan. “This is a befitting tribute to Pandit Deendayal Upadhyaya in his birth centenary year”.
