ANNUAL BUDGET FY 16-17 – THE BEGINNING

After giving 777 points salute to the annual budget, the very next day, BSE Sensex closed 2% higher today. So the budget is completely digested now by the markets and the Bulls are dancing to the tune of our rustic bollywood numbers. Divided into nine pillars, our FM has tried to cover the whole economy starting with agriculture sector and ending with dreadful tax reforms. Agriculture sector has been quite neglected with only 46% of cultivable area being irrigated.  With such dire state of affairs augmented by drought over the last two years, this year’s budget has done justice to the whole farming community. The total allocation for agriculture and farmer’s welfare stood at Rs. 35984 crore. Fast tracking 89 irrigation projects requiring Rs. 86500 crore in the next five years, out of which 23 of these projects will be completed before March 2017. Long term dedicated fund under NABARD will be created with initial corpus of Rs. 20000 crore and at least 5 lakh wells and pits will be dug in rain fed areas under MGNREGA allocations. Other two important announcements were interest subvention allowed to farmers with a provision of Rs. 15000 crore and rural road development. Under Pradhan Mantri Gram Sadak Yojana allocation of Rs. 19000 crore has been announced in the current fiscal.  Crop insurance has also been given Rs.5500 crore for FY16-17.

If you are bored with these figures, you have no idea about the realities of agriculture economy especially when crops fail due to uncontrollable factors or lack of irrigation facilities. So if you want SUVs and tractors to sell along with Fair and Lovely and Maggi, you need to understand why Mr. Jaietly presented an agriculture based budget. Coming back to the agenda, with regard to rural sector, the next pillar, the major breakthrough announcement was Digital Literacy Mission which will cover six crore households within the next three years, 100% electrification of villages by 2018 and Rs. 38500 allocated under MGNREGA. Bringing rural economy within domestic economic fold would have multiplier effect on GDP growth. Social sector and health care, the next pillar focuses on the wellbeing of lower socio economic section of the society. Providing LPG connections to women members of BPL families is a commendable step for their economic upliftment. Lastly health insurance scheme of Rs. 1 lakh per family for economically weaker sections will provide stability to their uncertain future. So right now, our domestic indices may not measure domestic economic activity but can definitely gauge the positive sentiment which can propel India beyond BRICS and into next level of economic hegemony for years to come.  By the way, abhi interval hua hai…… picture abhi baki hai….  ( Rest of the budget highlights in the next blog).