Assam’s economy is based on agriculture. Assam’s biggest contribution to the world is Assam Tea, and it plays a vital role. While other states like Punjab, UP, Tamil Nadu, Maharashtra etc. are gradually moving away from their conventional agricultural based economy towards a secondary or service-oriented economy, Assam is still laboriously reliant on the agricultural sector. The economy of Assam is contingent on the primary sector or agriculture, but it faces many difficulties for the upliftment of the economy.
Assam produces both food and cash crops, but Tea is the principal cash crop and well known globally for its idiosyncratic palate. Assam tea industry is gradually sinking due to various problems being faced by it. In fact, low wages, poor infrastructure, poor housing, health issues and lack of avenues for social mobility have been common problems since the inception of tea plantations in the area. There are many tea gardens which have closed down in recent years due to various problems affecting the industry.
Majors Problems
Decline in tea price: Due to various causes, the auction price of the tea has seen a steady decline over the years. According to World Bank, the tea prices declined by almost 44% in real terms. In India, all the profits from the tea gardens were siphoned off and there was no real or proper reinvestment in improving quality of tea.
Less production of tea: There are multiple problems being faced by the tea industry such as finance crisis, power problems, labour problems, poor labour schemes, inadequate communication system, increased revenue tax for tea gardens, increased pollution fee, less transport subsidy etc. All these have altogether put the tea industry in North East India in a hopeless situation, resulting in low production of tea leaves and tea.
Labour demand: Due to low wages and hardship of work, it is tough to find labours, beside the the natives and tea tribes who are solely dependent on the tea industry for their daily income and livelihood. The local labourers have also reduced due to less number of tea labourers for NREGA.
Sick industry: A considerable number of tea gardens have gone sick due to lack of infrastructure, modernization and efficient management.
No proper storage: The problem of storing premium quality tea has always been there. Due to delay in transportation and lack of storage facilities, the processed tea gains moisture from the atmosphere and deteriorates in quality.
Climatic factors: Unfavourable climatic conditions for tea plantations owing to scanty or very heavy rainfall have badly affected the tea industry.
Pest problem: Pest problem is another major issue. Along with the mosquito bug, a disease called the bacterial black spot has also affected many plantations in North East Tea Estates.
Gov’s apathy: There is no any proper strategy on Assam tea industry by the state & as well as central govt. This makes long term growth impossible.
Others factors like lack of proper communication infrastructure for export, limited use of scientific tool, insufficient capital to invest, decline the interest on the agricultural field etc. are also acting as obstacle to the growth of tea industry in Assam.
India is the second largest producer of tea in the world, only after China. Most of the tea produced in India comes from North East India, especially Assam and Tripura. The Assam tea industry accounts for more than 50% of India’s total tea production. There are 848 registered tea estates in Assam.
Assam is the only region other than China which can boast of its own variety of native tea plant, Camellia sinensis assamica. Most of the tea plantations in Assam are situated at a near sea level height. and the whole area is endowed with a plenty of rainfall. The unique tropical climate of Assam imparts a special distinctive malty flavor, with a very strong body and bright color.
Robert Bruce in 1823 discovered tea plants growing wild in upper Brahmaputra Valley. A tea garden was started by the Government in 1833 in the then Lakhimpur district. The commercial circle of London took a keen interest in tea plantations in Assam and a company named as Assam Company was formed in 1839 to take over the holdings of the East India Company’s Administration over the tea gardens in Assam. This was the first company in India to undertake the commercial production of tea. Nazira was headquarters of this company until it was shifted to Calcutta in 1965.
The second important tea company, the Jorhat Tea Company was formed in 1859. To encourage tea plantation, the Government also made liberal provisions for the settlement of the waste land for tea cultivation.
In 1911, world’s first institute dedicated to tea research, the Toklai Research Station was established near Jorhat to carrying on research on cultivation and manufacture of tea. This facility has been very useful in disseminating knowledge for the increase of yield for the industry. The industry faced an acute crisis in 1930s, which was successfully averted by enacting the Indian Tea Control Act,1933, and instituting an International Tea Committee and Indian Tea Licensing Committee.
Marketing of tea has always been a problem for the products of this region, as previously the Tea Auction Centre at Calcutta was the only centre of sale for Assam Tea. The imposition of West Bengal Entry Tax on Assam Tea, transport bottlenecks and many more difficulties involved in arranging the sale at Calcutta Auction centre, necessitated the opening of the Tea Auction Centre in Assam. The Tea Auction Centre at Guwahati was opened on 25th Sept.1970, which started a new era for the tea industry of Assam.
From the very beginning of tea plantation in Assam, the planters have faced great difficulties in securing the necessary labour force. The experiment with immigrant Chinese labour in the early days proved a complete failure due to the high cost of requirement and maintenance and to the difficulties in their management. Local labourers were not available in sufficient number. It thus became necessary to bring labourers from other parts of India in large number to meet the labour demand due to expansion of the tea plantations in Assam. As a result of continuous inflow of immigrant labourers, tea garden communities now forms substantial share of Assam’s population.
In present time, the Assam Tea has a global reputation and commands significant share in the world Tea Market. Assam’s total area under tea cultivation accounts for more than half of the country’s total area under tea. Assam produces about 630- 700 million kg of tea, which is more than half of India’s tea production.
India produced around 1,279 million kg in 2017 and it consumes 70% of the produce. As a result, it has very little amount of surplus tea left for export and thus India ranks fourth in the list of tea exporters. Some of the well-known regional brand varieties India produces are the Assam, Darjeeling, Nilgiri, Dooars, Kangra etc.
North Eastern Development Finance Corporation Limited (NEDFi) in association with Ministry of Development of North Eastern Region (M-DoNER) has launched North East Venture Fund (NEVF), the first dedicated venture capital fund for the North Eastern Region.
The capital commitment to the fund is Rs. 100 crore with an initial contribution of Rs.75 crore consisting of Rs. 45 crore from Ministry of DoNER and Rs. 30 crore from NEDFi. The balance fund of Rs. 25 crore has been committed by Small Industries Development Bank of India (SIDBI) in-principle.
The objective of the Fund is to contribute to the entrepreneurship development of the NER and achieve attractive risk-adjusted returns through long term capital appreciation by way of investments in privately negotiated equity/ equity related investments.
The primary objective of North East Venture Fund (NEVF) would be investment in enterprises focused on Food Processing, Healthcare, Tourism, Aggregation of Services and IT located in the NER and to provide resources for entrepreneurs from the region to expand throughout the country.
It would also invest in areas such as development of new products and services, technological up gradation, expansion or diversification, process improvement and quality improvement with the purpose of creating value for all stakeholders.
Investments will typically be in startups, early stage and growth stage companies with new products and technologies or innovative business models which have the potential to bring superior value proposition to the customers and clients and high growth in earnings and profitability.
Investment Manager will select businesses for investments which have high scalability and can reap dividend by quickly and cost effectively reaching to their target customers.
The Fund will also cover organizations which are in partnership / proprietorship form with the aim to convert them into company form of organization, so that the Fund is able to invest in them.
Each investment will be limited to a minimum of Rs.25 lakh and a maximum of Rs.10 crores.
The investments and implementation of the projects undertaken under NEVF are monitored on continuous basis, through submission of quarterly reports to Securities and Exchange Board of India (SEBI), customized Management Information System (MIS) and Independent Investment Committee meant for the purpose.
North Eastern Development Finance Corporation Ltd (NEDFi)
The I. K. Borthakur Committee Report in 1994 conceptualized the formation of a North-Eastern Development Bank to cater to the needs of NE region.
The North Eastern Development Finance Corporation Ltd (NEDFi) is a Public Limited Company registered under the Companies Act 1956 on 9th August, 1995. The shareholders of the Corporation are IDBI, SBI, LICI, SIDBI, ICICI, IFCI, SUUTI, GIC and its subsidiaries.It initially had an authorized capital of Rs 500 crores and a paid up capital of Rs. 100 crores.
Initially it was placed under the Ministry of Finance, Banking Division for administrative purpose. In 2004, the Ministry of Development of North Eastern Region (DoNER) was formed and the Corporation has been placed under this ministry.
NEDFi has a specific role of both development and financing on behalf of Govt of India in North East comprising of 8 states including Assam.
It fuel industrialisation and nurture entrepreneurial spirit in one of the most industrially backward pockets of the country’s NE region.
NEDFi provides financial assistance to micro, small, medium and large enterprises for setting up industrial, infrastructure and agri-allied projects in the North Eastern Region of India and also Microfinance through MFI/NGOs.
It also offers Consultancy & Advisory services to the state Governments, private sectors and other agencies.
It conduct sector specific and state specific studies under its Techno-Economic Development Fund (TEDF).
It is the designated nodal agency for disbursal of Govt. of India incentives to the industries in the North-East India under North–East Industrial and Investment Promotion Policy 2007 (NEIIPP 2007).
It also does promotional activities like mentoring through Water Hyacinth Craft, NEDFi Convention Center, NEDFi Pavillion etc.
It aimed is for the economic development of the North Eastern Region of India by identifying, financing and nurturing commercially and financially viable projects in the region.
NEDFi has set up the North East Venture Fund (NEVF) for North East Region. The capital commitment to the fund is Rs. 100 crore with an initial contribution of Rs.75 crore consisting of Rs. 45 crore from Ministry of DoNER and Rs. 30 crore from NEDFi. The balance fund of Rs. 25 crore has been committed by Small Industries Development Bank of India (SIDBI) in-principle.
The overall objective of the NEVF is to contribute to the entrepreneurship development of the NER and achieve attractive risk-adjusted returns through long term capital appreciation by way of investments in privately negotiated equity/ equity related investments.
Assam finance minister Himanta Biswa Sarma presented the state budget for the financial year 2019-20 on 6th February, 2019 at the state Legislative Assam assembly. This is the second digital budget of the state.
Assam Budget 2019 is dedicated to each of 3 crore & 30 lakhs population of our state, their happiness health & positivity. Each of the proposals of Assam Budget 2019 is in consonance with philosophy of Sarve Bhavantu Sukhinah, the greater well-being of people of this great State Assam.
Finance Minister Himanta Biswa Sarma started Assam Budget 2019 speech by saying: ‘Itu Bitupon, Dharma Sanatan Aakexe Kirtan, Kore Sdhujon’ Magnificent and sublime is the eternal faith which inspires the noble man to sing to the holy tune!
Sector-Wise Analysis
Social Welfare
Vistarita Atal Amrit Abhiyan, a cashless healthcare scheme for families whose income is Rs.5 lakhs or less. Propose to expand the coverage of AAA.
In 2017, announced Kanaklata Mahila Sabalikaran Yojana with vision of promoting self-help groups. Provided financial support to tune of Rs 184.89 crore to 1.32 Lakh SHGs.
15 Lakh beneficiaries have been paid stipend under Deen Dayal Divyangyan Sahayjya Asoni amounting to Rs138 crore. An outlay sum of Rs200 crore for these initiatives under Assam Budget 2019 is allocated.
Indira Miri Universal Widow Pension Scheme is dedicated to Smt Indira Miri. Allocated Rs136 crore in Assam Budget 2019 to cover 40,000 families under ‘Immediate Family Assistance Scheme’ & an estimated 2.4 Lakh widows under this scheme.
Rs 25,000 immediate assistance to widows below 45 years. – A new scheme under which any woman, upto age of 45 years, who loses her husband, will receive a lump sum amount of Rs 25,000 as Immediate Family Assistance which will support the family tide over the financial vacuum created by the loss of the bread earner
Central Govt is providing Old Age Pension for 7 lakh persons & almost equal number of beneficiaries are being covered by state government. I am allocating 250 crore for the scheme with commitment to provide more funds when new beneficiaries are identified.
Govt also passed the PRANAM Act, 2017 that strongly advised government employees to assure the security of senior citizens and the elderly people do not face abuse and are never deprived of their dignity in their old age.
Govt will give one tola gold (costs around Rs 38,000 as on today) to brides belonging to all such communities of Assam where it is customary to provide gold at the time of wedding. While other parts of India is plagued with the curse of dowry, in Assamese society, this is a voluntary act of assurance from the parents that no matter where she is, their support is always with her. This constitutes a part of the Stree-dhana.”
Earmarking Rs 300 crorefor Arundhati. Benefit under Arundhati can be availed upon formal registration of marriages under Special Marriage (Assam) Rules, 1954 & will reach beneficiaries right in time for the social marriage. It will be limited to only economically weaker sections, whose ann income is below Rs 5 lakh.
New scheme will be launched where rice will be sold at Rs 1/kg; 53 lakh families to benefit.
10 lakh aid will be given to each 108 religious places of all faith that are 100 years old in the state.
Launch of Bhasha Gaurav Achoni scheme for the protection and promotion of tribal languages of the state
Proposal to mitigate 380 arsenic affected habitations and 7 fluoride affected habitations
Near 1100 families have benefited under Compassionate Family Pension Scheme.
Education
Free textbooks to students up-to degree level from present level of Class XII, for children of families having annual income below Rs 2 lakh.
E-bike for students passing class XII state board in first division. The government will also provide free uniform to students of class IX and X.
All college students from tea garden community to get Rs 10,000 monthly stipends.
Rs 200 crores earmarked for Minority Girls Scholarship Scheme in Assam Budget 2019. Minority Girls Scholarship Scheme– A step towards education of girls belonging to minority. The scheme will encourage the girls to continue higher education. This scheme will be launched from Financial Year 2019-20.
A University for Divyangjan to be set up in Boko, Kamrup district under Deen Dayal Divyang Sahayjya Asoni scheme. It is one of the biggest initiatives to aid Divyang persons.
Gyan Deepika – The government will enhance parental income level of Rs. 1 lakh to Rs. 2 lakh for free admission.
CULTURE & TOURISM
Three giant statues of Assam Monarchs- Kumar Bhaskaravarman, Chaolung Siu-ka-Pha and Maharaj Nara-Narayana to be built at the state secretariat as icons of good governance.
Rs 155 crore given for the renovation of Batadrava Than, the sacred birth place of Mahapurusha Srimanta Sankaradeva, at Bordowa, Nagaon.
Rs 25 crore sanctioned for development of tombs of Ahom Kings as tourist attraction.
Rise of domestic tourist footfalls from 57,13,156 to 59,34,791 and from 28,419 to 31,739 in respect of foreign tourists
GOVERNANCE
Village headmen to get smartphones to stay connected with the district administration
SPORTS
One time cash incentive worth Rs 50,000 for a total of 2000 sports and arts personalities for their contribution.
ECONOMY
Construction of a new crude oil pipeline from Paradip Port to Numaligarh Refinery at a cost of Rs. 22,594 crore.
Rs 2200 crore sanctioned for the construction of 6-lane bridge over Brahmaputra river in Guwahati
Proposal to enhance threshold limit for registration under GST for supplier of goods to Rs 40 lakhs.
For MSME sector, annual turnover limit for availing Composition Scheme enhanced to Rs 1.5 crore
Scheme to rehabilitate boatmen who have lost jobs after the India’s two longest bridges were completed over Brahmaputra.
Rs 100 crore earmarked for developmental and employment related activities for indigenous Muslims of the state.
MAJOR ANNOUNCEMENTS
I. Aami Axomiya Initiative
Propose to appoint a Welfare Officer in each of the Tier 1 and Tier 2 cities which has a sizeable Assamese diaspora.
These Welfare Officers will support the distressed during times of medical emergency, provide assistance to young students to adjust to a new city and provide a temporary monetary assistance of immediate nature to those who have lost their jobs.
Further, depending on the availability of land, will also strive to construct Namghars in cities with sizeable Assamese diaspora.
Will also provide immediate logistical and financial assistance in cases of death of Assamese people living outside the State to provide the families of the deceased some succor during this time of grief.
II. Bhasha Gaurav Asoni
Protection and preservation of the rights, language and cultural traditions of the indigenous people of our state.
To ensuring that vernacular languages and dialects are preserved and promoted.
Will promote research of individual tribal languages helping them to develop grammar, publish books in their languages, and also develop dictionaries and encyclopedias in their languages. Various learning centres for the young students can
Earmarked Rs.50 crores in financial year 2019-20 out of the total budgetary commitment of Rs. 100 crore.
III. City Infrastructure Development Fund
In the Budget of 2017-18 a new scheme of City Infra Development Fund (CIDF) was
This scheme is aimed at increasing the Urban Infrastructure by carrying out infrastructure projects in 6 large cities (except Guwahati). Subsequently, the Budget of 2018-19 announced CIDF schemes of middle tier towns, having population of above 40,000.
Expanding CIDF to the 6th Scheduled areas which are the priority areas of this Government and create long felt need for amenities in the three beautiful towns namely Kokrajhar, Diphu and Haflong.
Each town under this scheme will be Rs. 100 crores.
Allocating Rs. 300 crore in the Budget for the year 2019-20 for CIDF.
IV. Incentive to the Technicians and Artists of Mobile Theatres of Assam
Provide a one-time grant of Rs. 50,000 for theatre artists and technicians, who have spent at least 5 years with the industry as a recognition of their efforts and outstanding contribution to this art form.
Earmarked a sum of 5 crore for the same Budget 2019-20.
V. One-Time Financial Assistance to 2000 leading Sports & Cultural Personalities
Hima Das and Ms. Rima Das have not just become household names across the country but have also taken the Assamese pride a notch higher with their outstanding achievements in the field of Sports and Cinema respectively.
To express appreciation to these icons and to encourage others, will give a one-time cash incentive of Rs. 50,000 each to total 2000 Sporting and Art Personalities for their contributions.
VI. Property Tax Amnesty for property owners in Guwahati
Residential and commercial buildings in Guwahati were constructed without complying with the building byelaws of Guwahati Metropolitan Development Authority (GMDA)
Government has decided to introduce a one-time amnesty scheme for property tax payers in Guwahati.
On voluntary declaration of their building violations, a one-time settlement and regularisation of the construction will be done against the payment of the building violation penalties.
VII. Restoration of Batadrava Than
In 1468, Srimanta Sankardev established the very first Kirtanghar of Assam at Batadrava for propagation of the Ek Saran Nam Dharma founded by him to bring together our people, breaking the barriers of caste, race or ethnicity.
He built the ‘Monikut’ together with Kirtanghar or Namghar and the Chari-Hati for accommodation of his disciples. This institution complex, now called as Sri Sri Batadrava Than, was completed in 1509.
The condition of Sri Sri Batadrava Than currently has deteriorated due to lack of proper maintenance.
Even the land belonging to this sacred Than was under encroachment which our Government has freed. It is overdue that this place is renovated and brought back to its original glory!
Propose an amount of Rs. 155 crore over the next 3 years.
VIII. Mobile Phones for Gaon Burahs
Gaon Burahs play a major role in maintaining the peace and brotherhood in rural Assam.
Propose to provide each of the 8000+ Gaon Burahs with smart phones.
Allocated Rs. 4 crore for this initiative in this year’s budget.
IX. Charaideo Maidams
Charaideo Maidams are an intrinsic part of the Assamese culture and an important archaeological asset of the State.
There have been calls for the sight to be listed as UNESCO World Heritage site. Steps will also be taken to promote this site as a major tourist attraction of the State and will initiate the efforts towards listing the site as a UNESCO World Heritage Site.
For the development of this important of this historical site, earmarked Rs.25 crores in this Budget and the Cultural Affairs Department will implement this scheme in consultation with the stakeholders.
X. Package for Integrated Development of Majuli Island (PIDMI)
Majuli is indeed at the heart of the Assam’s cultural heritage.
However, due to the perennial floods in the mighty Brahmaputra, this river island is gradually eroding.
Will provide a funding of Rs. 150 crore over medium term. Earmarking a sum of Rs. 50 crore for the integrated development of Majuli in this year’s budget.
XI. State Level Mega Skill Development Scheme
The Government plans to provide comprehensive skill training to the youth of the State so that they can obtain gainful employment in different priority sectors.
Earmark Rs. 77 crore for this scheme for the year 2019-20.
XII. Dharmajyoti Scheme
Government of Assam has been providing 50% subsidy to pilgrims who visit various holy places related to Assamese culture and heritage.
To ensure that more people are able to visit these temples government has decided to increase the subsidy for this scheme to 75% from 2019-20 and I am earmarking sufficient budget for this.
XIII. Statues of Kumar Bhaskaravarman, Chaolung Siu-Ka-Pha and Maharaj Nara-Narayana
Assam has seen some legendary rulers during the last millennium, the most prominent and well-known among them are Kumar Bhaskarvarman, most illustrious of the monarchs of the ancient kingdom of Kamarupa, the founder of the Ahom Kingdom – Chaolung Siu-Ka-Pha, and the last ruler of the undivided Koch Kingdom – Maharaj Nara Narayana
it is essential to remember the great rulers of our State and to this effect, govt. have decided to install giant statues of Kumar Bhaskaravarman, Chaolung Siu-Ka-Pha, and Maharaj Nara-Narayana in the Assam Secretariat Complex.
XIV. Initiatives for Preserving Cultural Heritage
Govt announce the following initiatives:
(a) Swargadeo Smriti Khetra at Charaideo in memory of the 42 great swargadeos of the Ahom Dynasty
(b) Siu-ka-pha Chair in Dibrugarh University in the memory of Siu-Ka-Pha, the first Ahom king and founder of the Ahom kingdom
(c) Museum in the name of Motok King Sarbananda Singha who is one of our royal icons.
(d) Will create Samannay Khetra in the name of Sati Radhika in Majuli, Sati Sadhini in Sadia and Bhimbor Deori samannay khetra in Bihpuria
(e) Viswa Mahabir Chilarai Sanskritik Kala Ketra in North Guwahati
(f) Govt will also develop the second capital of Ahom Kingdom – Habung, established by Chaolung Siu-Ka-Pha, as international research destination for Tai-Ahom culture.
XV. Relief package for boatmen, restaurant, etc. affected by the opening of Dhola-Sadia and Bogibeel Bridges
The inauguration of the Dhola-Sadia and Bogibeel Bridges has been a moment of pride and a boon for most of us in the State has also brought misfortune for the boatmen, restaurant owners and others who have lost their income sources.
In order to ensure that they are not left with a source of income our Government has decided to rehabilitate such individuals with an alternate source of income through the enterprise of the Inland Water Transport Department and govt earmarked Rs. 5 crore initially, for this scheme in this year’s budget.
XVI. Incentives for organizing Assamese traditional sports
During the last two years, government has made sincere efforts for the upgradation of sports infrastructure in Assam with our vision of making Guwahati as the ‘Sports Capital of India’.
will devote equal attention towards encouraging our traditional Assamese sports such as Nau Khel, Kaar Khel, Kori Khel, Ghila Khel Maal juj, Haatur, etc. which are extremely popular among our people.
Government has decided to organize a Traditional Sports Festival in Assam in 2019-20, along with taking other initiatives to showcase the richness of our traditional sports.
XVII. Training facility for UPSC/APSC exams for young students
Government focuses in providing training facilities for UPSC & APSC exams for the students of these communities.
Last year, introduced an initiative for providing UPSC/APSC training facilities for the students from the tea tribes and this year, will set up similar facility for the students from the Moran and Motok communities.
XVIII. Formation of new district
Govt have decided to create a separate new district from the existing Dima Hasao district considering its large geography and hilly terrain which makes the access of government services difficult for the citizens.
XIX. Beneficiaries Data Hub for the State of Assam
Announced the setting up of a Beneficiaries Data Hub in the state. This system would be housed within the Finance Department, and would be given better shape with the help of other departments like IT, P&RD, Social Welfare, Health, Education, etc.
XX. Provision of Additional Classrooms, Partition Walls, and Electricity in Elementary Schools
NABARD has approved Rs.438 crores for Financial Year 18-19 for the improvement of the schools and the work will start very soon.
In 2018, Govt conducted the 2nd round of Gunotsav in 33 districts covering nearly 36 Lakh children from Class-II to Class-IX, to assess the qualitative achievement level of learners in terms of scholastic and co-scholastic aspect and infrastructural assessment of the school and remedial measures on the gaps identified and to provide remedial Support thereof.
In continuance of endeavour to bridge the infrastructural gaps in our schools, earmarking a sum of Rs.219 crore for this scheme in budget 2019-20.
XXI. Incentives for ANM and GNM in Rural Areas
The rate of Infant Mortality (IMR) and Maternal Mortality (MMR) has seen a steady decline over the past decade.
From an IMR of 67 of 1000 in 2006, this has come down to 44 (out of every 1000 births) in 2016, while the MMR has come down from 480 deaths (out of every 100000 births) in 2006 to 237 in 2016.
Announcing an allowance of Rs. 1500 per month for every GNM and Rs. 750 per month for every ANM as rural allowance on the lines of a similar allowance already being given to the doctors posted in far flung areas.
XXII. Creation of Development Corporation for Indigenous Muslims
The Indigenous Muslims of Assam – Goria, Moria, Ujani, Deshi, Jola, Poimal, Syed, etc.- have always played an extremely important role in the social and economic progress of the State.
Will establish a Development Corporation for the Indigenous Muslims which will take up various programs aimed at the holistic development of this section of the society, including self-employment activities, provisioning banking linkages etc.
Allocated a sum of Rs. 100 crore for taking up various developmental and employment related activities.
XXIII. Solidarity Fund to Meghalaya for National Games, 2022
Assam hosted the National Games in the year 2007 and extend our support to Meghalaya and wish them the very best for organizing the ‘Best-ever’ National Games.
To this effect, as a goodwill gesture, Assam would like to give a solidarity fund of Rs. 10 crore to the Government of Meghalaya.
XXIV. Developmental Initiatives for Positive Engagement of Society
To actively create various opportunities for positive engagement of youth residing in the Tinsukia – Charaideo – Dibrugarh area.
These districts are mostly inhabited by our indigenous communities such as Moran, Motok, etc. The funds allocated for these schemes will be utilized for initiatives in the fields of sports, skill development, livelihoods and entrepreneurship, and importantly, emotional connect with special outreach programmes such as development of monuments, construction of statues, preservation of historical sites, etc.
Earmarked a sum of Rs. 500 crore for this important scheme and providing a sum of Rs.100 crore in the current budget.
XXV. Special Grants to VIth Schedule Areas
As an indication of commitment to the Bodoland Territorial Council (BTC), promised a sum of Rs. 1000 crore as special grant over a period of three years, Govt have already released funds worth Rs. 600 crores so far.
Started the construction of Kokrajhar Medical College with an outlay of Rs. 382.70 crore.
During this financial year, will take two other important initiatives viz. setting up of a Sports College in Kokrajhar and a Forest School in Chirang.
Will provide funds of Rs. 300 crore to BTC and will provide an additional infrastructure support of Rs.50 crore in BTC area.
In Karbi Anglong, promised a special grant of Rs. 10 crore for each of the 26 constituencies of Autonomous Councils. Shall release the remaining sum of Rs. 160 crore in year 2019-20 thereby fulfilling our commitment.
Almost completed the construction of Diphu Medical College and hope to start the Medical College Hospital in 2019-20.
Announced several projects for developing Dima Hasao into a model district and also taken up preparatory works for setting up a Civil Services Academy for the officers of Assam Civil Services cadres in Umrangso. Would also like to allocate an additional Rs. 10 crore for various development projects under each of the 26 constituencies of Autonomous Councils over a period of three years. Allocated an initial sum of Rs. 87 crore in the current budget for these schemes.
XXVI. Employee Welfare Measures
Some of the employee benefit related initiatives launched and the outcomes of those:
(a) In Budget 2017-18, implemented the 7th Pay commission awards for all the
government employees. All arrears on account of this have also been paid in the last financial year.
(b) Bidyalakshmi Scheme which was announced in 2017-18, banks have so far disbursed educational loans of over Rs. 30 crores benefitting hundreds of young students.
(c) Under the Apun Ghar scheme which was announced in the Budget 2016-17, loans for 19,261 new homes of the employees amounting to Rs. 2288 crores have been sanctioned.
(d) Under the Compassionate Family Pension scheme announced in the budget 2017-18, ensured sustained income to the family of the deceased employee by providing full pay of the deceased employee to the family.
Announce some additional schemes for the welfare of government employees:
(a) Extending Apun Ghar interest subvention on all the home loans taken prior to the launch of Apun Ghar scheme.
(b) A Cashless Health Assurance scheme for government employees will be rolled out from this year which will also enable them treatment across leading hospitals in India.
(c) Under the National Pension System (NPS), the mandatory contribution by the Government for its employees covered under NPS Tier-I account will be increased from 10% to 14% in line with the decision of Government of India.
(d) The Gyan Deepika scheme announced in this budget, students who have taken higher education loans from the banks will receive a one-time grant of Rs. 50,000.
(e) Under the Aapunar Apun Ghar scheme announced in this budget, providing home loan subsidy to all the citizens of Assam who opt for loans under this scheme. Thus, any Government employee who does not wish to avail loan under Apun Ghar scheme can opt for the benefits under the Aapunar Apun Ghar scheme.
XXVII. Assamese as a subject in schools
Presently, there is no compulsion on the part of a student to study Assamese language while pursuing education in Assam.
Propose that in Class IX and X, a student has to take Assamese subject as Modern Indian Language (MIL) or as Elective subject except in Sixth Schedule areas and Barak Valley.
FISCAL SCENARIO
Fiscal deficit rises to 2 per cent in 2017-18 from 2.4 per cent in 2016-17, primarily due to the implementation of the recommendation of the 7th Pay Commission.
Budget of estimated Rs. 99418.91 crore, but no additional tax.
Revenue account Rs 79742.26 crore
Capital account Rs 19676.65 crore
Assam will cross Rs 70,000 crore in expenditure, a new mark in the state. The revenue earning has increased by 20 per cent.
Breakup of Revenue Receipt for the year 2019-20 –
During the financial year 2019-20, the revenue of the State is estimated at Rs.294981.13 Crore, out of which Rs.98339.05 Crore is from the Consolidated Fund, Rs.100.00 Crore is from the Contingency Fund and Rs. 194855.42 Crore from the Public Account.
Breakup of Expenditure for the year 2019-20 –
Out of the total estimated expenditure of Rs.294374.33 Crore during 2019-20, out of which Rs.99418.91 Crore is from the Consolidated Fund, Rs.100.00 Crore is from the Contingency Fund and Rs.194855.42 Crore from the Public Account.
Glossary of Terms
Consolidated Fund
All revenues received by the Government including tax and non-tax revenues, loans raised and repayment of loans given (including the interest thereon) form the Consolidated Fund. All expenditure and disbursements of the Government, including release of loans and repayments of loans taken (and the interest thereon), are met from this fund.
Contingency Fund
A reserve fund set aside for possible unforeseen expenditure and established under Article 267(2) of the Constitution. It is an imprest placed at the disposal of the Governor.
Public Account
All public moneys received, other than those credited to the Consolidated Fund, are accounted for under the Public Account. In respect of such receipts, Government acts as a banker or trustee. The Public Account comprises of repayable like Small Savings and Provident Funds, Reserve Fund, Deposits and Advances, Suspense and Miscellaneous transaction (adjusting entries pending booking to fi nal heads of account), Remitances between accounting entitiees, and Cash Balance.
Deficit
Refers to the gap between Revenue and Expenditure. The kind of defi cit, how the defi cit is fi nanced, and applica on of funds are important indicators of prudence in Financial Management.
Revenue Deficit/ Surplus
Refers to the gap between Revenue Receipts and Revenue Expenditure. Revenue Expenditure is required to maintain the existing establishment of Government and ideally, should be fully met from Revenue Receipts.
Types of Receipts
Tax Revenue
Comprises taxes collected and retained by the State and State’s share of Union taxes under Article 280(3) of the Constitution.
Non-Tax Revenue
Includes interest receipts, dividends, profits etc.
Grants-in-Aid
Essentially, a form of Central Assistance to the State Government from the Union Government. Includes ‘External Grant Assistance’ and ‘Aid Material and Equipment’ received from foreign governments and channelized through the Union Government. In turn, the State Governments also give Grants-in-aid to institutions like 6th Schedule Councils, Panchayati Raj Institutions, Autonomous Bodies etc.
Capital Receipts
These are loans raised by the Government from the public (these are termed as market loans), borrowings by the Government from the Reserve Bank of India and other parties through the sale of Treasury Bills, the loans received from foreign Governments and bodies, disinvestment receipts and recoveries of loans from State and Union Territory Governments and other parties.
Expenditure is classified as Revenue Expenditure and Capital Expenditure.
Revenue Expenditure
Revenue Expenditure is an amount to meet the day-to-day running of the Government departments and for rendering of various services, making interest payments on debt, meeting subsidies, etc.
Capital Expenditure
Capital Expenditure is an amount to create permanent assets, or to enhance the utility of such assets, or to reduce permanent liabilities. Examples of capital expenditure are acquisition of assets like land, buildings, machinery, equipment, investments in shares, etc.
Finance Minister Piyush Goyal on 1st February, 2019, presented the interim Union Budget in Lok Sabha. The Budget is notable for its roadmap for 2030 focusing on 10 dimensions which are key growth drivers of the Indian economy.
Highlights and important points of the Interim Budget 2019
- Income Tax & other Personal Taxes -
Individual taxpayers with annual income up to Rs. 5 lakh rupees to get full tax rebate. For others, the tax rate remains unchanged.
Individuals with gross income up to 6.5 lakh rupees will not need to pay any tax if they make investments of Rs.1.5 Lakh in instruments prescribed eligible for tax savings under Section 80C.
Standard tax deduction for salaried persons raised from Rs. 40,000 rupees to 50,000.
TDS threshold on rental income raised from Rs. 1.8 lakh to Rs. 2.4 lakh. Around 3 crore middle-class taxpayers will get tax exemption due to this measure.
Benefit of rollover of capital tax gains to be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains up to 2 crore rupees; can be exercised once in a lifetime.
Benefits under Sec 80(i) BA being extended for one more year, for all housing projects approved till end of 2019-2020.
Group of Ministers examining how prospective house buyers can benefit under GST.
Within almost two years, almost all assessment and verification of IT returns will be done electronically by an anonymized tax system without any intervention by tax officials.
- Business Taxes -
Businesses with less than Rs. 5 crore annual turnover, comprising over 90% of GST payers, will be allowed to return quarterly returns.
2 % interest subvention on loan of 1 crore for GST registered MSME units.
- GST Implications -
In January 2019, GST collections have crossed Rs. 1 lakh crore.
GST has been continuously reduced, resulting in relief of Rs. 80,000 crore to consumers; most items of daily use for poor and middle class are now in the 0%-5% tax bracket.
GST is the biggest taxation reform implemented since Independence; through tax consolidation, India became one common market; inter-state movements became faster through e-way bills, improving Ease of Doing Business.
- Tax Collection -
Direct tax collections from 6.38 lakh crore rupees in 2013-14 to almost 12 lakh crore rupees; tax base up from Rs 3.79 crore to Rs 6.85 crore.
54% returns have been accepted without any scrutiny.
- Business Scenario -
Cost of data and voice calls in India is now possibly the lowest in the world.
Mobile and mobile part manufacturing companies have increased from 2 to 268.
Single window clearance for filmmaking to be made available to Indian filmmakers.
Anti-camcording provision to be introduced to Cinematography Act to combat film privacy.
Digitization of Export and Import transaction.
India is the second largest start up hub of the world.
- North East India -
Allocation for North Eastern region proposed to be increased to Rs 58,166 crore in this year a rise of over 21% from the previous year.
Government will introduce container cargo movement to the Northeast by improving the navigation capacity of the Brahmaputra River.
The budget allocation of Rs. 580 crore for various schemes of the North Eastern Council
931 crore under Central Pool of Resources for Northeast and Sikkim
674 crore under other subsidy payable including for North Eastern Region
1,700 crore for refund of Central and Integrated GST to Industrial Units in Northeastern region and Himalayan states.
Arunachal Pradesh has come on the air map recently and Meghalaya, Tripura and Mizoram have come on India’s rail map for the first time.
Many Projects stuck for decades like the Bogibeel rail-cum-road bridge have been completed.
- Agriculture & Allied sector -
Increased allocation for Rashtriya Gokul Mission to Rs. 750 crore in current year.
Two per cent interest subvention to farmers pursuing animal husbandry and fisheries.
Under Pradhan Mantri Kisan Samman Nidhi, 6000 per year for each farmer, in three installments, to be transferred directly to farmers’ bank accounts, for farmers with less than 2 hectares land holding. This initiative is likely to benefit 12 crore small and marginal farmers, at an estimated cost of Rs 75,000 crore.
Government announced setting up of Rashtriya Kamdhenu Aayog to enhance productivity of cows.
- Mining and Core Industry sector -
Urgent action needed to increase hydrocarbon production to decrease imports; change in bidding procedure and exploration procedure being implemented.
- Banking and Financial Sector -
The 4R approach has been implemented to ensure clean banking –
Recognition
Resolution
Recapitalisation
Reform
The government spent Rs 2.6 lakh crore in the recapitalisation of the public sector banks and recovered Rs 3 lakh crore so far, through the Insolvency and Bankruptcy Code procedures. The Bank of India, Bank of Maharashtra and the Oriental Bank of Commerce are out of the PCA framework.
56 lakh loans worth Rs 7.23 lakh crore have been sanctioned under Mudra scheme.
- Technology Sector -
Mobile Date consumption has increased by 50% in the country in the last five years. More than 3 lakh service centres are employing over 12 lakh today under the Digital India push.
National Program on Artificial Intelligence is up next with centres of excellence to give the push. The aim is to empower the MSME sector.
- Infrastructure Sector -
Sagarmala Project, a strategic and customer-oriented initiative to modernize India’s Ports, will be scaled up.
On realty sector, RERA and Benami Properties Act helped bring transparency in the sector.
Promise of electricity for all households by March 2019.
Digital villages are the next big scheme with an aim of 1,00,000 lakh such villages in the next five years.
India has achieved 98 percent rural sanitation coverage.
- Railway Sector -
Planned expenditure of Rs. 1,58,658 crore.
The operating ratio, a measure of Indian Railways financial health, improved and further improvement is being eyed. The operating ratio for the current fiscal year has improved to 96.2%.
Trains sets like Train 18, now Vande Bharat Express, will offer world-class travel experience to passengers in the coming years.
Vande Bharat Express was pitched as the indigenous technology leap that will ensure speed, service and safety in rail travel.
An outlay of Rs 64,587 crore for Indian Railways.
- Defense Sector -
Defense Budget gets mega boost, which is set for Rs. 3 lakh crore.
- Social Welfare -
Pradhan Mantri Shram Yogi Mandhan, to provide assured monthly pension of 3000 rupees per month, with contribution of 100 rupees per month, for workers in unorganised sector after 60 years of age. This will benefit 10 crore workers in unorganized sector, may become the world’s biggest pension scheme for unorganized sector in five years.
500 crore to be set aside for the above scheme, which is to be implemented from this year.
Massive announcement for work sector wish increase in gratuity limit from Rs 10 lakh to Rs 30 lakh.
Rs 60,000 crore has also been set aside for
Rs 19,000 crore has been allocated for Pradhan Mantri Gram Sadak Yojana.
Allocation for National Education Scheme is 38578 crore.
76,800 crore for SC/ST/OBC welfare schemes.
Committee under NITI Aayog to be set up to identify and denotify nomadic and semi-nomadic communities; Welfare Development Board to be set up under Ministry of Social Justice and Empowerment for welfare of these hard-to-reach communities and for tailored strategic interventions.
- Women and Child Development -
Rs 29,000 crore has been set aside for the Women and Child Development (WCD) Ministry for the next fiscal, a 20 % increase over the 2018-2019 financial year with the Centre’s programmes of maternity benefit and child protection services.
The allocation for the Pradhan Mantri Matru Vandana Yojana (PMMVY), a maternity benefit programme, was more than doubled to Rs 2,500 crore from Rs 1,200 crore. The programme provides Rs 6,000 each to pregnant women and lactating mothers.
The Child Protection Services programme under the Integrated Child Development Services was increased to Rs 1,500 crore from Rs 925 crore.
The government has already provided 6 crore free LPG connection. Government aims to complete the promise of 8 crore Free LPG connections by next year.
- Growth of Indian Economy -
India is poised to become a 5 trillion dollar economy in the next five years and will become a 10 trillion dollar economy in the next eight years.
Inflation is a hidden and unfair tax; from 10.1% during 2009-14, inflation in December 2018 was just 1%.
- Fiscal Scenario -
Fiscal deficit has been bought down to 3.4%
CAD (Current Account Deficit) likely to be 5% of GDP this year.
Total expenditure target for FY20 is at 27,84,200 crore a rise of 13.3%
Capital expenditure target is at Rs 3.36 lakh crore.
In 2018-19, dividend from RBI, PSU Banks is Rs 74,100 crore. For the current financial year, target for the same has been pegged at Rs 82,900 crore.
Revenue Deficit target has been pegged at 2 percent of the GDP.
Gilt repayment is pegged at Rs 2.36 lakh crore.
Net market borrowing has been pegged at Rs 4.73 lakh crore, while the gross market borrowing for the financial year has been pegged at Rs 7.1 lakh crore.
Dividend from PSU units has been pegged at Rs 53,160 crore.
Divestment target for Financial year 2020 has been pegged at Rs 90,000 crore.
What is Interim Budget & Vote-on-account?
Interim Budget: An interim budget is akin to a full budget but made by the government during the last year of its term, before the election. It has complete set of accounts, including both expenditure and receipts, but may not have any major policy proposals.
The interim Budget will seek the Parliament’s nod for meeting the expenditure for the first six months of new fiscal 2019-20 and a full-fledged Budget will be presented in Parliament once the new Central government is formed after the general elections.
It is not mandatory to present an interim budget in an election year, but the convention is to present an interim budget and get the fund required for spending.
Vote on Account: Vote on Account is a grant in advance to enable the government to carry on until the voting of demands for grants and the passing of the Appropriation Bill and Finance Bill.
Generally, the Vote on Account is taken for two months only and thus the sum of the grant would be equivalent to one-sixth of the estimated total expenditure for the entire year.
Vote on Account deals only with the expenditure side of the government’s budget.
Vote on Account cannot alter direct taxes and is treated as a formal matter and passed by the Lok Sabha without discussion.
The provisions of Vote on Account are given in the Article 116 of the Constitution.
Purpose of Budget/vote-on-account/interim budget
Article 266 of the Constitution of India mandates that parliamentary approval is required to draw money from the Consolidated Fund of India.
Budget: Glossary of Terms
Consolidated Fund
All revenues received by the Government including tax and non-tax revenues, loans raised and repayment of loans given (including the interest thereon) form the Consolidated Fund. All expenditure and disbursements of the Government, including release of loans and repayments of loans taken (and the interest thereon), are met from this fund.
Contingency Fund
A reserve fund set aside for possible unforeseen expenditure and established under Article 267(2) of the Constitution. It is an imprest placed at the disposal of the Governor.
Public Account
All public moneys received, other than those credited to the Consolidated Fund, are accounted for under the Public Account. In respect of such receipts, Government acts as a banker or trustee. The Public Account comprises of repayable like Small Savings and Provident Funds, Reserve Fund, Deposits and Advances, Suspense and Miscellaneous transaction (adjusting entries pending booking to fi nal heads of account), Remittances between accounting entities, and Cash Balance.
Deficit
It is the gap between Revenue and Expenditure. The kind of deficit, how the deficit is financed, and application of funds are important indicators of prudence in Financial Management.
Fiscal Deficit
When the government’s non-borrowed receipts fall short of its entire expenditure, it has to borrow money form the public to meet the shortfall. The excess of total expenditure over total non-borrowed receipts is called the fiscal deficit.
Primary Deficit
The primary deficit is the fiscal deficit minus interest payments. It tells how much of the Government’s borrowings are going towards meeting expenses other than interest payments.
Revenue Deficit/ Surplus
It is the gap between Revenue Receipts and Revenue Expenditure. Revenue Expenditure is required to maintain the existing establishment of Government and ideally, should be fully met from Revenue Receipts.
Direct and Indirect Taxes
Direct taxes are the one that fall directly on individuals and corporations. Eg. Income tax, corporate tax etc. Indirect taxes are imposed on goods and services. They are paid by consumers when they buy goods and services. These include excise duty, customs duty etc.
Fiscal policy
It is the government actions with respect to aggregate levels of revenue and spending. Fiscal policy is implemented though the budget and is the primary means by which the government can influence the economy.
Capital Budget
The Capital Budget consists of capital receipts and payments. It includes investments in shares, loans and advances granted by the central Government to State Governments, Government companies, corporations and other parties
Revenue Budget
The revenue budget consists of revenue receipts of the Government and it expenditure. Revenue receipts are divided into tax and non-tax revenue.
Tax revenues constitute taxes like income tax, corporate tax, excise, customs, service and other duties that the Government levies.
Non-tax revenue sources include interest on loans, dividend on investments.
Budget Estimates Amount of money allocated in the Budget to any ministry or scheme for the coming financial year.
Guillotine
Parliament, unfortunately, has very limited time for scrutinizing the expenditure demands of all the Ministries. So, once the prescribed period for the discussion on Demands for Grants is over, the Speaker of Lok Sabha puts all the outstanding Demands for Grants, Whether discussed or not, to the vote of the House.
The Department of Economic Affairs, Finance Ministry of India presents the Economic Survey in the parliament every year, just before the Union Budget. It is prepared under the guidance of the Chief Economic Adviser, Finance Ministry.
It is the ministry’s view on the annual economic development of the country. A flagship annual document of the Ministry of Finance, Government of India. Economic Survey reviews the developments in the Indian economy over the previous 12 months, summarizes the performance on major development programs, and highlights the policy initiatives of the government and the prospects of the economy in the short to medium term.
Chief Economic Adviser
The Chief Economic Adviser (CEA) is the economic advisor to the Government of India and the ex-officio cadre controlling authority of the Indian Economic Service. He/She is under the direct charge of the Minister of Finance.
J J Anjaria was the first CEA of India, from 1956-61.
Arvind Subramanian is the current CEA of India.
10 New Economic Facts on Indian Economy
Large increase in registered indirect and direct taxpayers – A 50 percent increase in unique indirect taxpayers under the GST compared with the pre-GST system. Increase in individual income tax filers as well and a large increase in voluntary registrations.
Formal non-agricultural payroll is much greater than believed – India’s formal sector, especially formal non-farm payroll, is substantially greater than believed. This has increased the formal sector payroll share to 53% from the earlier 31% of the non-agricultural work force.
States’ prosperity is correlated with their international and inter-state trade – States that export more internationally, and trade more with other states, tend to be richer. But the correlation is stronger between prosperity and international trade. States that export internationally and trade with other states were found to be richer.
5 States of Maharashtra, Gujarat, Karnataka, Tamil Nadu and Telangana account for 70% of India’s exports.
India’s internal trade is about 60% of the GDP.
India’s firm export structure is substantially more egalitarian than in other large countries Top 1 percent of Indian firms account for 38 percent of exports; in all other countries, they account for a substantially greater share (72, 68, 67, and 55 percent of exports in Brazil, Germany, Mexico, and USA respectively). And this is true for the top 5 percent, 10 percent, and so on. This is indicative of a better contribution from the smaller firms than in other countries.
The clothing incentive package boosted exports of readymade garments – The Rebate of State Levies (ROSL) was announced in 2016, under which, the Centre gives garment exporters refunds against all the levies they shell out at the state level.
The relief was offered under the duty drawback scheme as part of the package for the garments industry in the GST regime.
The incentive package boosted exports of ready-made garments by about 16%.
Indian society exhibits strong son “Meta” Preference – The survey highlighted that Indian society still exhibited a strong desire for a male child.
It pointed out that most parents continued to have children until they get number of sons.
This kind of fertility-stop-ping rule leads to skewed sex ratios but in different directions: skewed in favor of males if it is the last child, but in favor of females if it is not the last.
There is substantial avoidable litigation in the tax arena which government action could reduce – There is substantial avoidable litigation in the tax arena which government action could reduce.
The tax department’s petition rate is high, but its success rate in litigation is low and declining (well below 30%).
A smaller share of total pending cases accounted for a larger share of the money value at stake (due to the tax dispute). E.g. 2% of pending cases – 56% of the value at stake
66% of cases (each less than Rs 10 lakh) – 1.8% of the value at stake
To re-ignite growth, raising investment is more important than raising saving – It was highlighted that growth in savings did not bring economic growth.
But the growth in investment did bring a substantial growth to the economy.
The survey thus emphasizes that raising investment was more important than raising savings.
Own direct tax collections by Indian states and local governments are significantly lower than those of their counterparts in other federal countries
Indian states and other local governments empowered for tax collection realise lesser collection than their actual potential.
The footprint of climate change is evident and extreme weather adversely impacts agricultural yields
The impact of weather is felt only with extreme temperature increases and rainfall deficiencies
This impact is twice as large in unirrigated areas as in irrigated ones.
Economic Growth
Projections – The survey forecasts real GDP growth to reach 6.75% this fiscal. It is projected to rise to 7 – 7.5% in 2018-19. This could re-instate India as the world’s fastest growing major economy.
The Gross Value Added (GVA) at constant basic prices is expected to grow at 6.1 % in 2017-18, as against the 6.6% in 2016-17. Agriculture, industry and services sectors are expected to grow at 2.1, 4.4 and 8.3 percentages respectively in 2017-18.
Factors – The growth projections were based on the various reform measures undertaken in the recent years.
It includes GST, resolution of the Twin Balance Sheet (TBS) problem through IBC, recapitalization package for PSBs.
Also, with liberalization of FDI and export uplift from the global recovery, the economy began to accelerate in the second half.
Comparative performance – India’s average GDP growth during last 3 years is around 4 percentage points higher than the global growth. India’s growth averaged to 7.3% in 2014-15 to 2017-18 period. Lower inflation, improved current account balance and reduction in the fiscal deficit to GDP ratio are notable factors behind.
Way Ahead – The agenda for the next year to ensure a favourable growth trend
stabilizing the GST
completing the TBS actions
reducing unviable banks and allowing greater private sector participation
privatizing Air India
staving off threats to macro-economic stability
Areas of policy focus:
Employment – for the young and burgeoning workforce, especially women
Education – creating an educated and healthy labour force
Agriculture – raising farm productivity and strengthening agricultural resilience
Inflation
The Consumer Price Index (CPI) based headline inflation averaged to 3.3% during 2017-18. Many states have also witnessed a sharp fall in CPI inflation during 2017-18.
This is notably the lowest in the last six financial years. It has been below 4% for twelve straight months, from November, 2016 to October, 2017.
The CPI food inflation averaged around 1% during April-December in the current financial year. This has been possible due to Good agricultural production coupled with regular price monitoring by the Government. However, the recent rise in food inflation is mainly due to factors driving prices of vegetables and fruits.
Factors – The decline in inflation was broad-based across major commodity groups except Housing and Fuel & Light. In rural areas food was the main driver of CPI inflation and in urban areas, housing sector contributed the most.
Monetary Management
Monetary policy during 2017-18 was conducted under the revised statutory framework that provided for the MPC. The Monetary Policy Committee (MPC) decided to reduce the policy Repo Rate by 25 basis points to 6%, in August. Monetary policy has remained steady during 2017-18 with only one policy rate cut made in August.
Liquidity – Post the demonetisation in November 2016, the re-monetisation process began from November, 2017. This set in a favourable base effect. Resultantly, the Y-o-Y growth of both Currency in Circulation and M0 turned sharply positive.
Tax Collections
The growth in direct tax collections of the Centre was at 13.7% during April-November 2017. The indirect taxes growth rate was 18.3% during the same period. The States’ share in taxes grew by 25.2%. This is much higher than the growth in net tax revenue (to Centre) at 12.6% and of gross tax revenue at 16.5 %.
There was a slow pace in non-tax revenue but the robust progress in disinvestment compensated for this.
There is a 50% increase in the number of indirect tax payers.
Banking Sector
Banking sector performance, the PSBs in particular, continued to be subdued in the current financial year. The new Insolvency and Bankruptcy Code mechanism is being used actively to resolve the NPA problem of the banking sector.
Non Food Credit (NFC) grew at 8.85% in November 2017 as compared to 4.75% in November 2016.
Bank credit lending to Services and Personal Loans (PL) segments continues to be the major contributor to overall NFC growth.
The NBFC sector, as a whole, accounted for 17% of bank assets and 0.26% of bank deposits as on Sep 30, 2017.
External Sector
The global economy is expected to accelerate from 3.2% in 2016 to 3.6% in 2017 and 3.7% in 2018. It reflects an upward revision of the earlier projections by IMF.
India’s balance of payments situation continued to be favourable in the first half of 2017-18 as since 2013-14. This is despite some rise in the Current Account Deficit (CAD) in the first quarter (Q1). India’s CAD stood at US $7.2 billion in Q2 of 2017-18, i.e. 1.2% of the GDP.
India’s trade deficit (on custom basis) had widened. It stood at US$ 74.5 billion in the first half of 2017-18. This is against a declining trend in CAD observed since 2014-15.
Engineering goods, and petroleum crude and products registered a good export growth. Chemicals & related products and textiles & allied products witnessed a moderate growth. Negative growth was recorded by the gems and jewellery.
Future Prospects for India’s External Sector in coming year look bright. The world trade is projected to grow at 4.2 % and 4% in 2017 and 2018 respectively, as against 2.4% in2016. The trade of major partner countries is improving, and India’s export growth is also picking up.
However, rise in oil prices is emphasized as a huge challenge in the coming period, posing a downside risk to trade. This could also lead to higher inflow of remittances which have already started picking up.
Supportive policies like the GST, logistics and trade facilitation policies could help balance the risks.
Foreign Direct Investment
FDI equity inflows registered a 0.8% growth in total during 2017-18 (April-October) and FDI Equity Inflows to the Services sector grew by 15%, mainly due to higher FDI in two sectors i.e. Telecommunications and Computer Software and Hardware.
25 sectors also including services activities and covering 100 areas of FDI policy have undergone reforms recently. At present, more than 90% of FDI inflows are through automatic route.
Trade Policy
Two important developments on the trade policy front during the year relate to:
mid-term review of Foreign Trade Policy (FTP)
multilateral negotiations of WTO in December 2017
Foreign Exchange Reserves – India’s foreign exchange reserves crossed over US$ 409.4 billion on end-December 2017. India is 6th largest foreign exchange reserve holder among all countries of the world.
Industrial Sector
Index of Industrial Production (IIP) (base year 2011-12) indicates industrial output increase of 3.2 % (April-Nov 2017-18). This was a composite effect of robust growth in electricity generation and moderate growth in both mining and manufacturing sectors.
Core Industries – The 8 Core Infrastructure Supportive Industries had a cumulative growth of 3.9%(Apr-Nov 2017-18). They eight core industries are:
Coal
Crude Oil
Natural Gas
Petroleum Refinery Products
Fertilizers
Steel
Cement
Electricity
The production growth of Coal, Natural Gas, Refinery Products, Steel, Cement and Electricity was positive during this period. While the production of crude oil and fertilizers fell marginally.
Reforms – These include the GST, IBC, and announcement of bank recapitalization. Make in India programme, Start-up India and Intellectual Rights Policy to boost industrial growth are also the reasons. Notable sectoral initiatives include anti-dumping duty, Minimum Import Price (MIP) on a number of items for the steel sector and Pradhan Mantri Mudra Yojana for the MSMEs.
Performance indicators
India jumped 30 places to enter the top 100 for the first time in the World Bank’s Ease of Doing Business Report, 2018. It leaped 53 and 33 spots in the taxation and insolvency indices, respectively.
International ratings agency Moody’s upgraded India’s sovereign bond rating for first time in more than a decade.
Services Sector
The services sector continued to be the key driver of India’s economic growth. It has a share of nearly 55% in India’s Gross Value Added (GVA) and contributed almost 72.5 % of GVA growth in 2017-18.
Some of the notable areas include Tourism, Information Technology-Business Process Management, Real Estate, R&D, and Space.
India’s services sector registered an export growth of 5.7% in 2016-17. It remained the 8th largest exporter in commercial services in 2016 and has 3.4% of global share. This is double the share of India’s merchandise exports in the world which is 1.7%.
Enhanced global uncertainty, protectionism and stricter migration rules would be key challenges in shaping future services exports.
In the State-wise comparison of the performance of the Service sector in India. Out of the 32, in 15 states and UTs, the Services Sector is the dominant sector. It has contributed more than half of the Gross State Value Added (GSVA).
Services GSVA share ranges from over 80% in the case of Delhi and Chandigarh to around 31% in Sikkim. Services GSVA growth ranges from 14.5% as in Bihar to 7% in UP.
Infrastructure
The Global Infrastructure Outlook forecasts around US$ 4.5 trillion worth of investments for India till 2040 to develop infrastructure essential for both economic growth and community wellbeing.
India certainly lags behind many emerging economies in terms of providing qualitative transportation related infrastructure. Addressing this is essential to provide better access and thereby enhancing economic activities.
The umbrella programme ‘BharatmalaPariyojana’ aims to achieve optimal resource allocation for holistic highway development. Government has taken steps for streamlining of land acquisition and environment clearances to expedite delayed projects.
Railways showed an increase of over 5% in revenue- earning freight traffic carrying during 2017-18 (upto Sep 2017). The pace of commissioning Broad Gauge (BG) lines and completion of electrification have been accelerated.
Over 400 kms of metro rail systems are operational across the country. And another 680 kms (appx.) are under construction in various cities across India.
Ports – The port-led development along Indian coast line is undertaken under Sagarmala Programme. Almost 289 Projects worth over Rs. 2 Lakh Crore are under various stages of implementation and development. The cargo traffic handled at Major Ports has shown a marginal increase in the last year, valuing to around 500 million tonnes.
Telecommunication – Programmes like ‘Bharat Net’ and ‘Digital India’ could convert India into a digital economy.
Civil Aviation – Domestic airlines has showed a growth rate of 16% (in terms of increase in passenger carrying) in 2017-18 (April – Sep 2017) over the previous year period. Initiatives like liberalization of air services, airport development and regional connectivity through scheme like UDAN are being taken up.
Power – All-India installed power generation capacity has reached well over 3.3 lakh MW till Nov, 2017. The Ujjawal DISCOM Assurance Yojana (UDAY) has focused on enhancing the financial health of DIStribution COMpanies. It has reduced their interest burden, cost of power and aggregated technical and commercial losses. Electrification in 15,183 villages has been completed. Saubhagya (Pradhan Mantri Sahaj Bijli HarGhar Yojana), was launched in September 2017.
Logistics – The Indian logistics industry has grown at a compound annual growth rate (CAGR) of 7.8% during the last five years. The logistics sector provides employment to more than 22 million people.
World Bank’s 2016 Logistics Performance Index India improved to 35th rank in 2016 from 54th in 2014.
Housing – India’s housing policies have been mostly focused on building more homes and on home ownership.
Agriculture
Feminisation
The trend of ‘feminisation’ of agriculture sector i.e. increasing number of women in multiple roles as cultivators, entrepreneurs, and labourers. This is a consequence of growing rural to urban migration by men.
Women make presence at all levels of the agricultural value chain. Rural women are responsible for the integrated management and use of diverse natural resources to meet the daily household needs.
Importantly, the entitlements of women farmers will be the key to improve agriculture productivity.
Measures to ensure mainstreaming of women in agriculture sector:
earmarking at least 30% of the budget allocation for women beneficiaries in all ongoing schemes and initiatives
initiating women centric activities to ensure benefits of various beneficiary-oriented programs/schemes reach them
focusing on women self-help groups to connect them to micro-credit, ensuring representation in decision-making bodies
declaring 15th October of every year as Women Farmer’s Day, acknowledging the role of women in agriculture
Women farmers’ enhanced access to resources like land, seeds, water, credit, markets, technology and training is a necessity.
India needs an ‘inclusive transformative agricultural policy’ aimed at gender-specific intervention.
Mechanisation
Indian Farmers were adapting to farm mechanization at a faster rate in comparison to recent past. In 1960-61, about 93% farm power was coming from animate sources, which has reduced to about 10%in 2014-15.
Indian tractor industries have emerged as the largest in the world. They account for about 1/3rd of total global tractor production.
According to the World Bank estimates, half of the Indian population would be urban by the year 2050. It is estimated that the percentage of agricultural workers in total work force be around 25% by 2050.
Intensive involvement of labour in different farm operations makes the cost of production of many crops quite high.
All these call for a more enhanced level of farm mechanization in India. This also significantly reduce the cost of operation.
Land Holdings Consolidation
There is predominance of small operational holding in Indian Agriculture. The survey thus stresses the need for land holdings consolidation. This is especially essential for reaping the full benefits of agricultural mechanization.
Interest Subvention
A sum of around Rs.20,ooo crore has been approved in 2017-18 to meet various obligations arising from interest subvention.
This includes those provided to the farmers on short term crop loans and also loans on post-harvest storages.
The crop insurance under Pradhan Mantri Fasal Bima Yojana (PMFBY) is being linked to availing of crop loans.
Market Reforms
e-NAN – The electronic National Agriculture Market (e-NAM) was launched by Government on April, 2016. It aims at integrating the dispersed APMCs (Agricultural Produce Market Committee) through an electronic platform. It enables price discovery in a competitive manner to offer remunerative prices to farmers for their produce.
Farmers’ Income
Economic Survey emphasizes the Government’s goal to double farmers’ income by 2022, using programs like Soil Health Card, Input Management, Per Drop More Crop in Pradhan Mantri Krishi Sinchai Yojana (PMKSY), PMFBY, e-Nam, etc.
Innovation
Agricultural R&D is important for sustaining agricultural productivity growth in the long-term. The compound annual growth rate of expenditure has been 4.2% over the years. New Varieties/hybrids tolerant to biotic and abiotic stresses were released for cultivation in different agro-ecologies of the country. These have been developed for Cereals, Pulses, Oilseeds, commercial crops and Forage crops (for use as feed for animals).
Social Expenditure
The Expenditure on Social services by the Centre and States as a proportion of GDP stands at 6.6% in 2017-18 (BE). Components-based expenditure on social services in relation to GDP in 2017-18 (BE):
Education – 2.7%
Health – 1.4%
Others – 2.6%
Significance – Priority to social infrastructure are stated as essentials to inclusive and sustainable growth. Bridging the gender gaps in education, skill development, employment earnings, reducing social inequalities find mention in the survey.
Education
There is substantial improvement in the enrolment and completion rates of education in both primary and elementary school. There is also an increased percentage of schools which comply with Student Classroom Ratio (SCR) and Pupil Teacher Ratio (PTR) at the all India level. However, there are inter-state variations in adherence to SCR and PTR norms.
Gender Parity Index (GPI) at the primary and secondary levels of school has shown improvement.
RTE Act, 2009 is an initiative towards the goal of universalization of elementary education. Recent programmes like Beti Padhao, Beti Bachao are started to address gender bias in access to education.
Labour Reforms
The Survey mentions the technology enabled transformative initiatives such as:
Shram Suvidha Portal (facilitate reporting of Inspections, and submission of Returns)
Ease of Compliance (to maintain registers under various Labour Laws/Rules)
Universal Account Number
National Career Service portal (linking all employment exchanges)
These aim at reducing complexity in compliance and bringing transparency and accountability in labour laws enforcement.
Maternity Benefit (Amendment) Act, 2017, offers women entitlement to enhanced maternity leave for a period of 6 months.
India's gender gap in labour force
Mahila E-Haat is launched to provide e-marketing to products made/manufactured/sold by women entrepreneurs/SHGs/NGOs.
The legislative reforms in Labour sector include rationalizing 38 Central Labour Acts into 4 labour codes. They are the Codes on Wages, Safety and Working Conditions, Industrial Relations, Social Security and Welfare.
India’s gender gap in labour force participation rate is more than 50 percentage points, which is relatively high among many developing countries.
Women workers are the most disadvantaged in the labour market as they (a) constitute a very high proportion among the low skilled informal worker category, and (b) engaged in low-productivity and low paying work.
The lower participation of women in economic activities adversely affects the growth potential of the economy.
As per the ‘Women in Politics’ 2017 report:
Lok Sabha – 11.8% women MPs
Rajya Sabha – 11% women MPs
only 9% of MLAs across the country are women.
About 4.6 crore households were provided employment under the Mahatma Gandhi National Rural Employment Guarantee Act, out of this, 54% were generated by women.
Nai Roshni (leadership development programme for benefiting the women belonging to minority communities) is operational. Mahila Shakti Kendra scheme has been launched for leadership development and to address women’s issues at village levels.
Health
The National Health Policy 2017 recommends increasing State sector health spending to more than 8% of the States’ Government Budget by 2020. Strengthening health delivery systems and achieving universal health coverage are the objectives.
Government healthcare providers accounted for about 23% of the Current Health Expenditure (CHE). This reflects the prominence of private hospitals and clinics among health care providers.
Out of Pocket Expenditure (OoPE) is around 62% in total health expenditure. The higher levels of Out of Pocket Expenditure (OoPE) on health adversely impact the poorer sections and widen then inequalities. Lack of affordable diagnostic facilities consumes a significant part OoPE.
Average prices of diagnostic tests widely vary across cities, despite government’s efforts to regulate prices of Drugs and Diagnostics.
The concept of Disability Adjusted Life Years (DALYs) helps analyse the disease burden and associated risk factors. It is the sum of years of potential life lost due to premature mortality and the years of productive life lost due to disability.
There has been significant improvement in the health status of individuals in India. Evidently, life expectancy at birth has increased by 10 years during the period from 1990 to 2015. States with higher life expectancy are reflecting lower DALYs rates i.e. lower incidence of diseases and vice-versa.
Malnutrition still remains the most important risk factor, despite the drop in rate from 1990. Integrated Child Development Services, Pradhan Mantri Matru Vandana Yojana, National Nutrition Mission are efforts at addressing this.
The contribution of air pollution to disease burden is high in India with levels of exposure remaining among the highest in the world. Pradhan Mantri Ujjwala Yojana is a measure in this regard.
The other key risk factors include dietary risks, high blood pressure and diabetes etc. These is a shift in disease burden from Communicable Diseases to Non-Communicable Diseases over last two decades.
Sanitation
Sanitation coverage in rural India is stated to have increased from 39% in 2014 to 76% in January, 2018. It is mainly attributed to Swachh Bharat Mission (SBM) (Gramin) launched in 2014.
ODF – The number of persons defecating in open in rural areas has significantly declined, creating positive health and economic impact. So far, 296 districts and around 3 lakh villages all over India have been declared Open Defecation Free (ODF).
8 states (Sikkim, Himachal Pradesh, Kerala, Haryana, Uttarakhand, Chhattisgarh, Arunachal Pradesh, Gujarat) are declared ODF completely. 2 Union Territories (Daman & Diu and Chandigarh) also join this category.
The NSSO and Quality Council of India’s surveys reported more than 90% of individuals, who have access to toilets, using them.
UNICEF report, ‘The Financial and Economic Impact of SBM in India’, estimated that a household in an ODF village saves Rs 50,000/- a year.
Fiscal Federalism
Concerns
Difference in fiscal empowerment between urban and rural local government
The Survey highlights the low level of tax collections by the Rural Local Governments in India. RLGs received about 95% of their revenues from the devolved funds from the Centre/State. RLGs in India generate only about 6% of revenues from own resources compared to 40% in Brazil and Germany.
On the other hand, the urban local governments generate 44% of their total revenue from own sources. ULGs also collect 18% of total revenues from direct taxes, much closer to International norms.
Less Direct Taxes collection Direct Taxes account for only about 35% in India as against 70% in Europe. Indian States generate only about 6% of their revenue from direct taxes as against 19% and 44% in Brazil and Germany respectively. Moreover, unlike in other countries, reliance on direct taxes in India seems to be declining.
Causes
State Governments have not devolved enough taxation powers to the Panchayats. Even in cases where more powers are devolved, land revenue collection remained low. This is due to low base values applied to properties and also low rates of taxes levied.
Other reasons are (a) unwillingness to tax by the state, possibly due to close proximity between the state and the citizens, (b) unwillingness by abled citizens to pay because of dissatisfaction with the quality of services, and (c) Centre and States govt unwilling to their devolution powers to control lower levels of government.
Suggestions
The Survey emphasized the importance of fiscal decentralization. Fiscal decentralization is grounded on the idea that spending and tax decisions must reflect local preferences as far as possible. This is essential to address the issue of low tier governments remaining stuck in a ‘low equilibrium trap’depending largely on outside resources.
Financial Savings And Investment
India witnessed an unprecedented climb to historic high levels of investment and saving rates in the mid-2000s.
The ratio of domestic saving to GDP fell from the peak 38.3% in 2007 to about 29% in 2016.
The current slowdown where both investment and saving have slumped is the first in India’s history. India’s current investment/saving slowdown episode has been lengthy compared to other cases and it still continues. The cumulative fall over 2007 and 2016 has been milder for investment than saving. However, India’s investment slowdown is unusual.
There is a clear shift visible towards market instruments, largely driven by demonetization. Investment slowdowns are more detrimental to growth than savings slowdown. So, given the changing trend in savings side through recent measures, the need now is to focus more on investment revival.
The policy conclusion is urgent prioritization of investment revival to arrest the more lasting growth impacts.
Science & Technology
In 2013, India ranked 6th in the world in scientific publications and its ranking has been increasing as well. The growth of annual publications between 2009 and 2014 was almost 14%. This growth increased India’s share in global publications from 3.1 % in 2009 to 4.4 % in 2014. Broadly, the publication trends reveal that India is gradually improving its performance.
The Nature Index that assesses counts of high-quality research outputs ranked India at 13 in 2017.
According to the WIPO, India has the world’s 7th largest Patent Filing Office. However, India produces fewer patents per capita. One major challenge in India has been the domestic patent system. While India’s patent applications and grants have grown rapidly in foreign jurisdictions, the same is not true at home.
Sustainable Development
India’s urban population is projected to grow to about 600 million by 2031. The survey thus suggests Urban Local Bodies to generate resources through varied financial instruments like municipal bonds, PPPs and credit risk guarantees, to deliver on varied basic services.
Climate Change
India’s commitment to environment and response to the threat of climate change in accordance with the principles of equity and Common but Differentiated Responsibilities. Also, with the “Paris Pledge” to reduce the emission intensity of GDP by 33-35% over 2005 levels by the year 2030.
Renewable energy
Access to sustainable, modern and affordable energy is the basis of achieving Sustainable Development Goals. The increasing share of renewables has tripled in the last 10 years. As on 30th November 2017, the share of renewable energy sources was 18% in the total installed capacity of electricity in the country.
International Solar Alliance (ISA) entered into force in December, 2017.
Union Budget is the annual report of the Government’s finances in which revenues from all sources and outlays for all activities are consolidated. It also contains estimates of the Govt’s accounts for the next fiscal year.
On 1st February 2018, Union Finance Minister Arun Jaitley presented the Union Budget 2018, his 5th and the last full budget of this NDA government. This budget was also special because it is the first budget after big-ticket economic reforms like the Goods and Services Tax (GST), Demonetisation, Dynamic Fuel Pricing etc.
Major Highlights
Fiscal Situation
Fiscal deficit is 3.5% of GDP at Rs 5.95 lakh crore in 2017-18.
Excess revenue collected from personal income tax amounts to 90,000 cr.
Fiscal deficit target for next fiscal: 3.3%.
Rs 21.57 lakh crores transferred as net GST to states as against projection of Rs 21.47 lakh crores.
India’s growth story
Indian economy is on course to achieve high growth of 8%. Economy to grow at 7.2-7.5% in second half of 2018-19.
India grew at an average of 7.5% in the first three years since 2014. It is now a $2.5 trillion economy and the seventh largest in the world.
Government moves to remove stamp duty from financial transactions.
41% more returns were filed this year, which shows that more people have joined the tax net. Tax payer base has risen from 6.47 crore in 2014-15 to 8.27 crore in 2016-17.
Sector-wise Analysis
Personal Tax
Personal Income Tax: No change
Relief to salaried tax: Standard deduction increased for transport and medical reimbursement to Rs 40,000 from Rs 15,000. However conveyance expenses to get benefit of Rs 19,200 under transport allowance will stant discontinued.
Long term capital gains (LTCG) over Rs. 1 lakh to be taxed at the rate of 10%.
Health and education cess increased to 4% from current level of 3%.
For Senior citizens
Rs 50,000 additional benefit to senior citizens for investment in mediclaim.
For senior citizens, no TDS on FD, Post Office interest upto Rs. 50,000.
For senior citizen, limit for investment in LIC schemes doubled to Rs. 15 lakh.
Corporate Tax
100% tax exemption for the first five years to companies registered as farmer producer companies with a turnover of Rs. 100 crore and above.
Custom Duty/Cess
Proposal to increase the health and education cess to 4%.
Imported electronics, including phones and TVs, will now get more expensive as government proposes to increase custom duty on mobiles from 15% to 20% and on some other mobile parts to 15%, and some parts of TVs to 15%.
Customs duty on raw cashew cut form 5% to 2.5%.
Telecom
Government proposes to set up 5 lakh wifi-hotspots that will provide internet to five crore rural citizens in 2018-19.
Government provided Rs10,000 crore for creation and augmentation of telecom infrastructure in 2018-19.
Department of Telecom will support the setting up of indigenous 5G centre at IIT Madras.
Textile
Rs 7,148 crore allocated for textile sector
MSME Sector
Target of Rs. 3 lakh crore for lending under PM MUDRA Yojana.
Reduced corporate rate of 25% to firms with 250 cr turnover.
Banking
Recapitalisation will pave the way for public banks to lend an additional Rs 5 lakh crore.
Startups
VCFs, angel investors to get new measures for growth and new tax rules to increase funding of startups.
Railways
Rs 1,48,528 crore is the capital expenditure for the Indian Railways for 2018-19… All trains to be progressively provided with WiFi, CCTV and other state-of-the-art amenities.
All railways stations with more than 25,000 footfalls to have escalators.
12,000 wagons, 5160 coaches and 700 locomotives being procured. This is significant achievement of physical targets by Railways.
Focus will be on safety, maintenance of railway tracks, increase in use of technology and fog safety devices.
Redevelopment of 600 major railway stations has been taken up; Mumbai transport system is being expanded; suburban network of 160 km planned for Bengaluru.
Foundation stone of the bullet train was laid in September 2017. An institute is coming up in Vadodara to train the manpower required for the high speed railway projects.
3600-km of rail track renewal targeted in coming year.
All trains to increasingly have WiFi & CCTVs.
600 railway stations to be redeveloped.
150 km additional suburban railway network at the cost of Rs. 40,000 cr.
Agriculture
Credit for agriculture sector to increase from 10 lakh crore to 11 lakh crore
Agri-Market Development Fund with a corpus of Rs 2000 crore to be set up for developing agricultural markets.
1290 crore allocation for bamboo sector.
Operation Green allocation Rs. 500 crore for promoting farmer produce organisations.
Grameen Agricultural Market (GRAM) will provide farmers a means to sell directly to buyers.
The focus is on low-cost farming, higher MSP. Emphasis is on generating farm and non-farm employment for farmers.
The Minimum Support Price (MSP) of all crops shall be increased to at least 1.5 times that of the production cost.
The government will ensure payment of full MSP even if farmers sell below MSP.
10,000 cr for fishery development fund and animal husbandry fund.
Kisan credit card to be extended to fisheries, animal husbandry farmers.
100% tax deduction for farmer production firms with 100 crore turnover.
APMCs will be linked with ENAM. 22,000 Gramin agricultural markets will be developed.
Health
Ayushman Bharat program – About 10 crore poor and vulnerable families will be targeted under healthcare protection scheme, which will offer up to Rs 5 lakh per family. This will be the world largest government-aided programme.
As per the national health policy 2017, health and wellness centres will be launched. Around 1.5 lakh centres will provide free essential drugs, maternal and child services. The finance ministry allocated Rs1200 crore for this flagship programme.
Rs 1,200 crore for the flagship programme in health wellness centres.
TB patients will get Rs 500 per month for nutritional support.
600 crore for nutritional support to all TB patients.
Infrastructure
To spend 14.34 trillion Indian rupees ($225.50 billion) on rural infrastructure.
NHAI would transfer the road projects into special purpose vehicles to use innovative structures such as infrastructure trusts for fund mobilisation.
Government to use select InvITs for infrastructure funding.
System of toll payment by cash being replaced by electronic payments.
Smart City mission: 99 cities selected with outlay of Rs. 2.04 lakh crore.
5 lakh WiFi spots for benefit of 5 crore rural citizens.
10 tourist cities to be developed into iconic tourist destinations.
Connecting India– Road/Air
Bharatmala project approved for better road connectivity at Rs 5.35 lakh crore.
UDAN will connect 56 unserved airports in India.
Airports Authority of India now has 124 airports; this will be expanded by 5 times. Aim of 1 billion trips a year.
Airport capacity to be hiked to handle 1 billion trips per year.
Education
1 lakh crore over 4 years for initiative for infra in education.
At least 24 new government medical colleges and hospitals will be set up by upgrading existing district hospitals.
Goal of one medical college per every three Parliamentary constituencies.
1,000 best B.Tech students to be made PM research fellows — to do PhDs in IITs and IISc. They will spend few hours every week teaching in technical institutions.
Eighteen new schools of planning and architecure will be set up.
Proposal of Railway University in Vodadara.
Eklavya schools for tribal children.
Government to launch ‘Revitalising Infrastructure and Systems in Education by 2022.
Integrated B.Ed programme to be initiated for teachers, to improve quality of teachers.
Technology will be the biggest driver in improving education. To work with states to provide more resources to improve quality of education.
Moving from blackboard to digital board.
Skill Development & Training
Training for 50 lakh youth by 2020.
Science & Tech
National program to direct efforts in Artificial Intelligence.
Women
76% of MUDRA loans for women.
Contribution of 8.33% to EPF for new women employees by the govt for three years while the employer’s contribution will continue to be at 12%.
Government proposes to increase the target of providing free LPG connections to 8 crore to poor women.
8 crore rural women to get free gas connection through Ujjwala yojana.
Poor, backward and vulnerable section
By 2022, every block with more than 50% ST population and at least 20,000 tribal people will have ‘Ekalavya’ school at par with Navodaya Vidayalas.
Allocation of Rs. 56,619 crore for SC welfare and Rs. 39,135 crore for ST welfare.
Allocation for national livelihood mission: Rs. 5750 crore.
Other Important proposals
Government doesn’t consider cryptocurrencies as legal tender or coins.
The govt aim that by 2022, all poor people have a house to live in.
Government plans to construct 2 crore more toilets under Swachh Bharat Mission.
Total 187 projects sanctioned under the Namami Gange programme.
Air Pollution in Delhi-NCR is a cause for concern, special scheme will be implemented to support governments of Haryana, Punjab, Uttar Pradesh and Delhi-NCT to address it and subsidise machinery for management of crop residue.
Proposal to develop 10 prominent tourist destinations as Iconic tourism destinations.
AMRUT programme will focus on water supply to all households in 500 cities. Water supply contracts for 494 projects worth 19,428 core awarded.
Emoluments of the President to be revised to Rs 5 lakh per month & emoluments of the Vice-president to be revised to Rs 4 lakh per month.
Cash payments of over Rs. 10,000 by trusts, institutions to be disallowed.
Disinvestment target of Rs. 80,000 crore for 2018-19. 24 Public Sector Units to be divested.
United India Insurance, Oriental Insurance and National Insurance will be merged and then listed.
Gold monetisation scheme will be revamped to allow people to open hassle-free gold deposit accounts.
Outward Direct Investment (ODI) from India has grown to US$15 billion per annum.
Loans to self-help groups will increase to ₹75,000 crore
Key Focus Areas Agriculture,Health,Education and Employment are the main focussed areas of the Union budget 2018-19.
Important Glossary
Fiscal Deficit -When the government’s non-borrowed receipts fall short of its entire expenditure, it has to borrow money form the public to meet the shortfall. The excess of total expenditure over total non-borrowed receipts is called the scal decit.
Revenue Deficit -The difference between revenue expenditure and revenue receipt is known as revenue deficit. It shows the shortfall of government’s current receipts over current expenditure.
Primary Deficit -The primary deficit is the fiscal decit minus interest payments. It tells how much of the Government’s borrowings are going towards meeting expenses other than interest payments.
Capital Budget – The Capital Budget consists of capital receipts and payments. It includes investments in shares, loans and advances granted by the central Government to State Governments, Government companies, corporations and other parties
Revenue Budget – The revenue budget consists of revenue receipts of the Government and it expenditure. Revenue receipts are divided into tax and non-tax revenue.
Tax revenues constitute taxes like income tax, corporate tax, excise, customs, service and other duties that the Government levies.
Non-tax revenue sources include interest on loans, dividend on investments.
Budget Estimates – Amount of money allocated in the Budget to any ministry or scheme for the coming financial year.
Guillotine – Parliament, unfortunately, has very limited time for scrutinising the expenditure demands of all the Ministries. So, once the prescribed period for the discussion on Demands for Grants is over, the Speaker of Lok Sabha puts all the outstanding Demands for Grants, Whether discussed or not, to the vote of the House.
