The third Budget of the NDA government is set against the backdrop of a stubborn global slowdown. The Budget is pragmatic and marks an acceleration in the pace of economic reforms. It strikes the right balance between the key objectives of stoking growth and continuing on the path of fiscal consolidation. Overall, the budget addresses the concerns related to a the slowdown in investment spending, a slowdown in the farm sector due to two successive sub-par monsoons, and the stress faced by PSU banks. The Budget pushes ahead decisively on other fronts such as job creation, ease of doing business and streamlining tax administration.
Thanks to the agriculture focus, farm credit will reach an all time high of Rs 9 lakh crore. In next fiscal year, there will also be fast tracking of irrigation projects, and a dedicated long-term irrigation fund is being created. The Cabinet had already announced a crop insurance scheme that is a huge safety net. The focus has also shifted to also not just providing food security but also income security, especially of the farmer. The aim is to double farm incomes over the next five years.
For the broader rural economy, there are initiatives such as additional funding for gram panchayats and municipalities, step-up in road construction, development of 300 rural-urban clusters, a programme to promote digital literacy and a target of 100% rural electrification by 2018.
Rural roads too have got significant investments. In fact the overall expenditure of infrastructure in roads and railways is more than Rs 2 lakh crore.
This investment will surely spur greater private sector investment and employment. Moreover such infrastructure and long lived assets benefit multiple generations.
Greater encouragement will be given to deep sea oil exploration and drilling. A 100 per cent FDI is being permitted in the marketing of processed foods made in India. The Motor Vehicle Act is being amended to permit private entrepreneurs in the areas of local passenger transport. Measures are also being taken to ease the bankruptcy process, promote retail participation in the G-Sec market, and broa-den the spread of ATMs, including in post offices.
In this Budget, one clearly sees the effort to break down some of the roadblocks that have snagged the economy in last few years.
Stalled projects through PPP model will hopefully see some positive movement with the mechanism being put in place to resolve disputes and renegotiate contracts.
The bankruptcy code and the moves to strengthen the ARCs, along with the recapitalization of public sector banks, will help tide over the problem of NPAs. The Budget has also announced various steps to resolve the pending tax litigations.
