Union budget was announced on 1st February 2017 and the country held its breath wishing for miraculous solutions to their problems. Did it disappoint or deliver? Let’s find out.
After facing demonetization, some expected the waves to get higher and hit closer to home while others thought that the water would now become safer to dive in. There were several rumours about the budget bringing about necessary changes to relieve people belonging to middle and lower middle class of the country. What the layman anticipated was that it would act like an ointment to the open wounds that earlier decisions by the government had given them.
The Finance Minister, Mr Arun Jaitley called his budget, “one for the poor” and indicated that the cash crunch in the market is taking its last breath and won’t be around as we enter the next financial year in April of 2017.
Relief and Rescue
Rural India was struck by lightning in November when the government scraped almost 86% of the currency in circulation. In a cash economy like ours, many people saw their savings erode as lenders put the burden of the change on already laden rural Indians.
This budget has tried to offer respite to rural India from their fixes by emphasizing on various sectors. It is too early to say if it would turn out to be a temporary cheer or a lasting smile.
Highlights of Union Budget 2017
Cliché wrapped up in glam
We are as strong as our weakest link and therefore a lot of emphasis has been put in order to strengthen the backbone of India that is its rural areas.
The total allocation and allied sector is INR 1, 87,223 crore, a whopping 24% more than that of last year. With the objective of restoring rural India to its former glory, this budget has a lot to offer to the Kisan but here are five things you just cannot miss.
- Targeted agriculture credit in 2017-18 has been fixed at INR 10 lakh crore.
- Allocation to Fasal Bima Yojna has been raised to INR 13,240 crore (last year- 5500) and coverage has been increased to 60%.
- Almost all of 648 Krishi Vigyan Kendras to ensure presence of mini-soil testing labs
- Long term irrigation fund raised to INR 40,000 crore
- Dairy Processing infra fund increased to INR 8,000 crore
- A promise to double farm income in the next 5 years
The ease of transportation- Ab Rural India door nahi
In order to promote trade from rural areas, it was a necessity to create ways to make it easier on the industries, of course giving them tax benefits is one way. However, the real deal is creating a way that makes communication easier.
- INR 19,000 crore allocated for construction of roads under PMGSY
- 3,500 km railway lines contracted for 2017-18.
Living as we know it
If we record increase in GDP but not Human Development Index, our growth speaks really less of our country as a whole and therefore it is deemed extremely important to help the rural population live in clean surrounding. The same goes hand in hand with fighting poverty and encouraging employment through government schemes and initiatives. This budget has promised just that.
- Sanitation coverage to be increased up to 60%
- Allocation of INR 48,000 crore to MGNREGA with participation of women up to 55%.
- Building 1 crore houses by the year 2019 to provide shelter to the homeless
- Achieve a 100% electrification rate in villages by 2018
- Establishing Mahila Shakti Kendra to promote female employment
The Corporate Angle
Strong reaction and general disappointment apart, the citizens are reacting reasonable well to the budget. If we take an approach to focus on the positives, few sectors have gained an upper hand.
Increase in disposable income is expected, which would in turn mean more consumers for brands that sell need oriented products. Especially, daily use items such as soaps and other sanitary items would probably benefit from this budget.
A coupled impact of increase in housing, dairy, infrastructure, railways etc. would aid the manufacturing units in India. Also, the reduction in corporate tax rate for small industries will further forward the agenda for consolidating the medium and small industries of India,
Technology and Media
With more disposable income comes more needs, mobile and internet would form part of the same. The dreams of digital India and current government’s efforts to achieve it has proved beneficial to this sector.
Insurance and Finance
The Insurance sector has welcomed the move to increase coverage under PMFBY while banks and micro-finance institutes seem excited about the high targets. The implementation will be seen as a challenge but the allocation under the union budget is sure to boost both the sectors.