What is the potential impact of this year’s budget on the long-term prospects of India’s economy?

polity : What-is-the-potential-impact-of-this-years-budget-on-the-long-term-prospects-of-Indias-economy

Answer by Shubham Bansal:

Hopefully YES.Why?
Let's look at some of the salient featues of the Budget 2014-15 and the conclusion.

1.Exemption limits for income and investment in financial institution raised:Well always a popular move and raises comfort, security and confidence in the market and stakeholders.House Loan interest cap raised,promoting more people to avail the loans and have their own home someday.

2.Education: 5 new IIMs, 5 IITs and 4 AIIMS-like institutions to be set up for more opportunities and reducing the burden on the current premier institutions.

3.Technology:

  • "DIGITAL INDIA" : Programme for broadband connectivity at village level.
  • National Rural Internet and Technology Mission:Aimed at rural areas which are dumb strikingly behind the emerging smart cities.
  • Ultra Modern Super Critical Coal Based Thermal Power Technology: Benefits are self-explanatory.

4.New Policies:

  • 4200-crore "Jal-Marg Vikas" for inland waterways between Haldia and Allahabad.Indian transport just sees 7% as water transport's share,much lower than the developed countries.This will now boost coal transportation and increase revenue for one of the busiest and historical ports of the country.

Haldia port foresees boost in revenues

  • 2142-crore "Neeranchal" programme for watershed development,which is essential to a country rapidly progressing yet dependent on rains like ours.

World Bank Approves Neeranchal National Watershed Project, India

  • Beti Bachao, Beti Padhao Yojana : Print Release (by PIB on the same highlighting the salient features).We can't really expect development without growth in the real terms.
  • Health For All Scheme : 39,237-crores set aside for the health sector.15 model rural health research centres in states to be set up. 4 new AIIMS-like institutions to be set up.Government will provide central assistance to strengthen the States' Drug Regulatory and Food Regulatory Systems by creating new drug testing laboratories and strengthening the 31 existing state laboratories.

Free Drugs, Diagnosis to Ensure 'Health for All'
Something is rotten in the state of GTB Hospital (and whole of their comprehensive series of reports on the study of state of hospitals in the Capital).
Aruna Asaf Ali Hospital battles increasing patient load
Thus it is imperative to pay more heed to this sector in a new light.

5.Allocations:

  • Rs 2,037 crore set aside for Integrated Ganga Conservation Mission called ‘Namami Gange’:http://timesofindia.indiatimes.c…                                                                 An NRI fund has also been set up to harness the enthusiasm of the community towards the boiling issue.
  • Rs 150 crore allocated for increasing safety of women in large cities
  • Govt provides Rs 500 crore for rehabilitation of displaced Kashmiri migrants.
  • 1000 crore provided for “Pradhan Mantri Krishi Sinchayee Yojna” for assured irrigation.
  • Rs. 50,548 crore under the SC Plan and Rs. 32,387 crore under TSP.:For the welfare of the tribals, Van Bandhu Kalyan Yojana is being launched with an initial allocation of Rs.100 crores.An IFCI scheme will look after the 200-crore for the promotion of start-up among the SC entrepreneurs.

6.Economic initiatives

  • Requirement to infuse Rs.2,40,000 crore as equity by 2018 in our banks to be in line with Basel-III norms PSUs will invest through capital investment a total sum of Rs. 2,47,941 crores.
  • Rs 4,000 cr set aside to increase flow of cheaper credit for affordable housing to the urban poor/EWS/LIG segment: National Housing Bank will allow more credit at cheaper rates.
  • Govt considering giving greater autonomy to PSU banks while making them accountable.

The numbers
* Government expects Rs 9.77 lakh crore revenue crore from taxes
* Plan expenditure pegged at Rs 5.75 lakh crore and non-plan at Rs 12.19 lakh crore.
* Fiscal deficit target retained at 4.1 pc of GDP for current fiscal and 3.6 pc in FY 16
* Disinvestment target fixed at Rs 58,425 crore
* Gross borrowings pegged at Rs 6 lakh crore
* Contours of GST to be finalised this fiscal; Govt to look into DTC proposal.

Administrative reforms
* Committee to look into all fresh tax demands for indirect transfer of assets in wake of retrospective tax amendments of 2012
* Expenditure management commission to be setup; will look into food and fertilizer subsides
* Legislative and administrative changes to sort out pending tax demands of more than Rs. 4 lakh crore under dispute and litigation.
* New Urea Policy would be formulated.
* More productive, asset creating and with linkages to agriculture and allied activities wage employment would to be provided under MGNREGA.
* A committee will to examine and recommend how unclaimed amounts with PPF, Post Office, saving schemes etc. can be used to protect and further financial interests of the senior citizens
* Slum development to be included in the list of Corporate Social Responsibility
* Committee to examine the financial architecture for MSME Sector, remove bottlenecks and create new rules and structures to be set up and give concrete suggestions in three months.
* An institution to provide support to mainstreaming PPPPs called 4PIndia to be set up with a corpus of Rs. 500 crores.

RESULT: High confidence among the investors, higher hopes among the Ganga enthusiasts, businessmen, small traders, students, those in dire need of healthcare, women and every other section of Indian community. PPP is emphasized upon because of the lack of money at hand. Several plans to spend as little as 100 crores on new areas to study their benefits in the short term is certainly wise.While it may be very soon to comment(Yes like an hypocrite!) I am very enthusiastic and hopeful about the economy in the near future and decades too!

SOURCE: Union Budget 2014-15: Highlights (Thank You The Hindu.) and my analysis and so many other innumerable links and sites.

What is the potential impact of this year's budget on the long-term prospects of India's economy?

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