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As the finance minister gears up to present the Union Budget for the next financial year, Business Standard scans the 2016-17 Budget speech for a status check on key announcements made last Budget by Finance Minister Arun Jaitley for various sectors and assesses how much has been achieved.
Rural sector: Building roads falls far short of target
For ensuring adequate transport infrastructure in rural areas of the country, the Pradhan Mantri Gram Sadak Yojana received a much higher allocation of Rs 19,000 crore in 2016-17. However, against a target of 48,812 km of road length, so far 32,668 km have been completed. The other key announcements focused on the farmer. Under the Soil Health Card Scheme, the target was to cover all 140 million farm holdings by March; however, against a target of 25.3 million soil samples collection by March, by December 23.3 million had been collected and based on those, 128.2 million soil health cards are being made. Further, compared to the Pradhan Mantri Krishi Sinchai Yojana’s (PMKSY’s) aim to bring 2.85 million hectares under irrigation, over 1.3 million hectares have been brought under PMKSY till December. Organic farming was also slated to receive a big boost with the aim of bringing 500,000 acres under organic farming over three years under the Parmparagat Krishi Vikas Yojana. Against the first year’s target of covering 200,000 hectares, an area of 190,000 hectares has been covered under organic farming till December 2016. Lastly, the government had announced that it would launch a Unified Agricultural Marketing E-Platform. The platform was launched and 250 mandis of 10 states have been integrated with e-NAM Portal. Read more for status check on key announcements for the rural sector
Tax, governance and ease of doing business: Execution of GST and GAAR will play a key role
Financial year 2017 (FY 17) saw the Constitutional amendment to enable Centre and state governments to shift to GST getting passed by Parliament, paving the way for the implementation of the long-awaited GST. However, the three GST bills and the compensation bill are yet to be approved by the GST council. The other focus area of the government had been to bring clarity in tax laws to enhance ease of doing business. However, the government has not issued guidelines regarding General Anti-Avoidance Rules (GAAR), which will be implemented from April 1, 2017, to date. On the other hand, the guidelines for determining place of effective management (PoEM) for foreign companies have been placed in the public domain on January 24, 2017. These rules had been deferred by one year in the previous Budget. Lastly, in pursuit of checking unaccounted income and black money, the previous Budget had talked of a compliance window for domestic taxpayers to clear up their past tax transgressions. By December the government announced declarations of Rs 67,382 crore under the scheme. Subsequent to demonetisation the government launched a second income disclosure scheme. Read more for status check on key announcements related to taxation and ease of doing business
Social sector: LPG for poor women is a success
One of the Budget announcements, which has been met in full, was to provide LPG connection in the name of women members of poor households. The aim was to benefit 15 million households below the poverty line in 2016-17. To achieve this, the Pradhan Mantri Ujjwala Yojana was launched on May 1 and to date 16.3 million connections have been given under the scheme, surpassing the target. However, the aim of providing health insurance cover of up to Rs 1 lakh per family has remained unmet. Such a scheme is yet to be launched. Budget 2016 also saw rural electrification becoming the focus of one of the most ambitious announcements of the government: To achieve 100 per cent village electrification by May 1, 2018. As of now, 50.2 million households are yet to be electrified. Further, the Prime Minister announced in his 2016 Independence Day speech to achieve full rural electrification the balance of 18,452 villages would be electrified by 2018. As of December 2016, 7,633 villages were electrified during FY17. Urban and rural housing also were in focus in the Budget by way of the Pradhan Mantri Awas Yojna (PMAY). Benefits were extended under the PMAY scheme on December 31, 2016. The target set for rural houses this year was 32,60,676, of which 76 houses were completed and 87,274 beneficiaries got their first instalment to build houses. In urban areas 6,716 houses had been completed by December 2016. The other social sector announcement centred around digital literacy for rural India. Read more for status check on key announcements for the social sector
Financial sector reforms: Road map in the works for state-run banks
FY 17 saw various financial sector reforms brought in the by the government as promised and progress on some of the related announcements made in the Budget. However, the road map for consolidation of public sector banks, which the government had announced would be spelt out, is yet to be put in the public domain. Other than that though, the Parliament passed the Insolvency and Bankruptcy law code 2016 In May last year. Further, it had been announced that a Code on Resolution of Financial Firms would be introduced as a Bill in the Parliament during 2016-17, and so far a draft Bill has been finalised by the finance ministry and put in the public domain for comments. Also, the amendment to the RBI Act of 1934 was passed in the Finance Bill 2016 to provide statutory basis for a Monetary Policy Framework and a Monetary Policy Committee. Subsequently, the six-member monetary policy committee was formed with three external members appointed by the government. Significantly, in pursuit of announcements made during the Budget, the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill, 2016 was passed by Parliament in August. It amended four laws: Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI), the Recovery of Debts due to Banks and Financial Institutions Act, 1993, the Indian Stamp Act, 1899 and the Depositories Act, 1996. However, the setting up of a Financial Data Management Centre is still being pursued and a draft bill titled ‘The financial data management centre bill 2016’ has been submitted to the government by a committee set up for the purpose. Read more for status check on key announcements for financial sector reforms
Infrastructure and investment: Revival of airports waiting to take off
In the civil aviation sector, the government had announced that it would draw up an action plan for revival of unserved and underserved airports. Further, that the Centre would partner the state governments to develop some of these airports for regional connectivity. During FY 17, The civil aviation ministry unveiled its regional connectivity policy to revive 43 existing but unused airports in the first phase. As of January 25, two new airports have been added to the list of revived and functional airports: Kanpur and Bathinda. Further, the government had announced that it would open up the road transport sector in the passenger segment and introduce amendments in the Motor Vehicles Act. However, while the Motor Vehicles (Amendment) Bill was first introduced in the Lok Sabha in August 2016, it has been with a parliamentary standing committee since then. Also, despite the announcement made during the Budget, guidelines for renegotiation of PPP concession agreements have not been introduced so far. However, with regard to a new credit rating system for infrastructure projects being introduced, rating agencies ICRA and Crisil have come out with a new credit rating framework in consultation with the Ministry of Finance and other stakeholders. Read more for status check on key announcements for the infrastructure sector
With inputs from: Sanjeeb Mukherjee, Jyoti Mukul, Shine Jacob, Arindam Mujumdar, Shreya Jai, Indivijal Dhasmana, Sudipto Dey, Ishan Bakshi and Nitin Sethi
With inputs from: Sanjeeb Mukherjee, Jyoti Mukul, Shine Jacob, Arindam Mujumdar, Shreya Jai, Indivijal Dhasmana, Sudipto Dey, Ishan Bakshi and Nitin Sethi
