Yojana March 2018 Summary: Union Budget 2018-19 (Part - 1) (Download PDF)

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Taking the Economy Forward - The main focus of budget is on spending more money on agriculture and rural economy which is a part of doubling the income of farmers by 2022. There is an increase in the budget allocation for rural livelihood programs.

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Union Budget: Yojana March 2018 Summary (In English)

Dr. Manishika Jain explains Yojana March 2018: Union Budget

Funds for food processing industry and animal husbandry sector have been increased substantially. The budget emphasised on health, education, and other social protection schemes. The budget focus on education targets

  • Quality of education

  • Quality of teachers

  • Use of digital technology for supplementary learning.

In order to take care of the unevenness in the prices of three major vegetable crops of Tomato, Onion and Potato (TOP), a new scheme ‘Operation Greens’ under ‘Operation Flood’ has been launched. New warehousing and processing capacities of these crops to be created with the help of Farmers Producer Organizations (FPO).

Farmer Producer companies with a turn over upto Rs. 100 crores to get 100 % tax exemption, thus encouraging professionalism in farm processing sector.

The Government’s budgetary proposals for rural economy to create

  • 321 crore person days of employment

  • 51 lakh new rural houses

  • 1.88 crore toilets

  • 3.17 lakh km of rural roads

  • 1.75 crore houses with electric connections.

In health sector, ambitious scheme of 👌 ‘Ayushman Bharat’ for primary health care and health protection scheme by coverage of Rs. 5 lakh for every single BPL family for secondary and tertiary illness. The scheme targets to cover 10 crore families.

👌 Arogaya Bharat: Under which proper training institutes to be opened in several parts of the nation, those institutes to provide more than 10, 000 skilled health care professionals, thus improving the health care system in India. The scheme was launched by Ministry of Women and Children.

The government has announced that in case of newly created jobs, the employer’s contribution of 12 % of wages will be given by the government in addition to 30 % cost of wages of new employment being allowed as deduction under Income Tax Law.

The textile and leather industry received a huge boost along with railways, road and transport for improving the network of roads and rail tracks. The total amount to be spent on infrastructure would be Rs. 5.97 lakh crore.

The Union Budget has set in a place a prudent road map for fiscal consolidation and fiscal path. The fiscal deficit of 2017 - 18 is revised from 3.2 % of GDP to 3.5 % of GDP. The target to be reached is 3 % of GDP in next 2 years atleast.

Rejuvenating the Economy

Real GDP growth to reach 6.75 % in 2017 - 18. Expected to rise to 7.5 % in 2018 - 19. Major fiscal consolidation measures taken in 2017 - 18 include

  • Demonetization in November 2016

  • Launch of GST

  • Introduction of new Bankruptcy Code

  • Implementation of Aadhaar card

  • Liberalization of FDI

  • Implementing a major recapitalization package of Rs. 88, 000 crore for stressed public sector banks

Economic scenario of 2017 - 18 has been effected by factors like

  • Economic growth at 7.2%

  • Stable inflation for 6 years

  • Fiscal consolidation

  • Macroeconomic stability strong foreign exchange reserves of 409.4 billion dollars

  • Impressive precedes from disinvestment of Rs. 1 lakh crores

📝 Disruptions like demonetization and GST did not result in serious adverse effect on growth and other macroeconomic parameters, but economy is facing challenges like

  • Low growth rate of agriculture in 2017 - 18

  • Gigantic amount of NPAs

  • Problem of capitalization requiring infusing capital in the state run banks

Fiscal Consolidation:

  • Budget shows India to be a 2.5 trillion economy. Provisions are made to result in desirable growth in agriculture and industrial sector targeting “Make in India” mission.
  • Fiscal deficit is being brought down from 6.4 % in 2010 to an international acceptable level.
  • Sovereign rating and ease of doing business, allowing 100 % FDI in retail business and other structural reforms will facilitate in achieving the target growth rate.
  • 14.34 lakh crores for creation of livelihood in rural areas and social schemes area step towards right direction in a mission of “Garibi Hatao”.
  • Agriculture and Rural Economy - 49 % of people are directly engaged in agriculture. The budget emphasised on generating higher income for farmers by extending necessary help to produce more at lesser cost and also earn more from their produce, to get a fair price, market connectivity to be developed.
  • Rs 2000 crores for agriculture market and infra fund has been allocated, Rs. 500 crore for Operation Greens
  • Agriculture credit for farmers has been increased from 8.5 lakh crores to 11 lakh croresto facilitate small and marginalized farmers.
  • Kisan Credit facility to allied areas such as fisheries and animal husbandry. Rs 10, 000 crore each for Fisheries and Aquaculture Development Fund and Animal Husbandry Fund.
  • Installing solar pumps in the field to facilitate irrigation is an important step to help farmers.
  • Upgradation of existing 22, 000 rural haats to Gramin Agricultural Markets (GrAMs) to take care of 86 % of small and marginal farmers
  • Setting up of 42 mega food parks with an investment of Rs. 1290 crores to increase productivity.
  • Post-harvest tax incentive and 100 % rebate for FPOs will help increase production and chasing a target of possible potential of 100 billion dollar export, which would help in increasing farmer’s income.

Rural Economy

  • 8 crore free LPG connections under Ujjwala scheme for BPL women and 4 crore poor household being provided with free electricity connection under Saubahagya Yojana ( Rs. 16, 000 crore)
  • The two schemes would reduce burning of fuel and deforestation and sufferings of women.
  • To fulfill target of housing for all by 2022, more than 1 crore houses are being built in 2019 in rural areas, besides construction 2 crore toilets in addition to 6 crore toilets under SBM.
  • Rs 5750 crores for national livelihood and Rs. 9975 crores for social security schemeshave been allocated, which would help in adding dignity to women.
  • Prevailing corruption at grass root level adversely effects the benefit of government schemes reaching the target people.

Education, Health and Social Security

Allocation of funds to health as percent of GDP as compared to other BRIC countries is low. China spends 3.2 % of GDP as compared to 1.4 % of GDP in case of India.

One lakh crore for infrastructure system in education would include

  • Set up of 2 new schools for planning and architecture

  • Set up one medical college for every 3 parliamentary constituencies

  • Upgrade hospitals to medical colleges

  • Provide scholarships to 50 lakh youth by 2020.

  • Set up of 1.5 lakh centres to provide health facilities closer to home with an allocation of Rs. 1200 crores under Ayushman Bharat.

  • Large amounts are allocated for TB nutritional support.

  • 10 crore families to be covered under NHPS

The schemes to promote business of insurance and generate employment in the country.

16 crore accounts under PM Jan Dhan Yojana under micro insurance and pension schemes are very well thought out.

Rs. 52719 crore for SC welfare and Rs. 39139 crore for ST welfare will help SC & ST population. Every block with more than 50 % ST population to have Eklavya schools which would be at par with Navodaya Vidyayalyas

Infrastructure and Industry

Rs 5.97 lakh crore to connect the nation with a network of roads, airports, railways, ports and inland waterways.

10 prominent tourist sites are being developed into Iconic Tourist Destinations by involving infrastructure and skill development, development of technology, attracting private investment, branding and marketing that would generate employment and result in growth.

Rs 1.48 lakh crore for railways

  • To eliminate unmanned crossing

  • To build escalators

  • To provide Wi-Fi and CCTV cameras

Rs 11, 000 crore for Mumbai rail network and Rs. 17, 000 crores for Bengaluru metro.

Government to setup 5 lakh Wi-Fi hotspots to provide net connectivity to five crore rural citizens. Rs. 10000 crores allocated in 2018 - 19 for creation and augmentation of Telecom infrastructure would help in Digital India

MSMEs which constitute 99 % of companies, Rs. 3794 crores are provided for giving credit support, capital and interest subsidy and for innovations. MSME investment plan for machinery/equipment from Rs. 50 crore to turnover Rs. 250 crore and reducing tax rate to 25 % and align them to GST.

3 lakh crore for MUDRA loans for MSMEs

Rs 7148 crore for textile sector in 2018 - 19 to help generate employment and boost growth.

Employment

  • This budget was focused on generating employment by making a provision of 70 lakhs for formal jobs in different fields
  • The government may consider setting up of National Labour Exchange as suggested by studies done by Indian Institute of Finance, the exchange to deal with unemployment in country.
  • Tax Proposals - To maintain stability, tax rates both personal and corporate were unchanged. A standard deduction of Rs. 40, 000 was introduced.
  • Senior citizens interest income on deposits with banks and post offices proposed to be increased from Rs. 10, 000 to Rs. 50, 000. A hike in deduction limit for health insurance premium and/or medical expenditure from Rs. 30, 000 to Rs. 50, 000 under section 80D
  • Long Term Capital Gains (LTCG) tax at moderate rate of 10 % on basis equity. 1 % education cess for revenue considerations to run massive social security schemes.
  • If the income exemption limit would have been raised to Rs. 3 lakh, then the government would lose Rs. 15, 000 crore. The loss could be covered by increasing LTCG to 20%.
  • To promote “Make in India” and for revenue considerations, customs duty has been increased on many items like electronic goods, perfumes, edible oils etc. Customs duty has been reduced on items like medical equipment (accessories for making implants), solar tempered glass for manufacture of solar cells/panels/modules and the raw materials.

Promoting Value Added Products

Price Volatility - Farmers suffer a high degree of price volatility leading to income stability.

Instability of prices of vegetable commodities like Tomato, Onion and Potatoes (TOP) is a perennial problem. A permanent solution is needed rather than take adhoc steps to pacify the customers.

👌 A feasible option is peri-urban horticulture. Considerable areas within cities and nearby areas can be used to promote peri-urban horticulture involving cultivation on roof-tops and vacant lands with crops like TOP, chilli and other essential food plants.

The advantages are

  • Price stability

  • Sustainable nutrition

Seawater Farming

  • 👌 Seawater farming is done in Kuttanad region of Kerala. Both crops and fisheries can be included in seawater agroforestry system.
  • India should become a leader in demonstrating how seawater can be used for cultivation of variety of crops. This will increase the income of the coastal agriculture and will make them prepared for natural calamities like tsunami.
  • M S Swaminathan Research Foundation provides training for seawater farming and below sea level farming and also would help in capacity building. The program to include conservation of mangroves and other salt tolerant species. A genetic garden of halophytes has been established for this purpose.
  • 👌 National Year of Millet - Government of India has declared 2018 as National Year of Millet.
  • 👌 Tamil Nadu is the leading producer of millet crops like samai, thinai, kezhvaragu, panivaragu, kambu and several other minor millets. Koli Hills has a rich germplasm of such millets. So, it will be useful to organise a Millet Biovalley for the conservation of Millets. The program should be accompanied by variety of small food industries based on production of wide variety of millets.
  • Rice Bio Park - should be organized which will show farmers how to increase their income through biomass utilisation. Value added products would be rice straw, husk, bran and grain.
  • Similar bio-Parks can be organized for pulses to help farmers to derive income and employment from every part of the bio mass.

Adaptation to Climate

  • Climate Risk Management R&D centres at least one at block level are to be setup. Such centres to be supported by trained Climate Risk Managers, one woman and one man from each Panchayat because Climate can become a major catastrophe

Establishment of Farm Schools

  • Farmer to Farmer learning through Farm schools established in outstanding farmers’ fields should be initiated, this would spread of skilled work in farming.
  • Peri-Urban Horticulture Revolution - National Food Security Act 2013 provides for inclusion of millets and other grains in the Public Distribution System. Ragi and millets acreage is likely to go up substantially in Karnataka as well as in several other states. The government of Karnataka has procured more than 1 lakh tons of ragi at Rs. 2000 per quintal.
  • Remunerative prices and effective procurement are the keys to revive interest in such crops.
  • 👌 From 1992, MSSRF has been working in Kolli Hills of Tamil Nadu and Koraput of Odisha trying to promote conservation of a wide range of millets through opportunities of commercialization.
  • Food Security Act 2013, includes millets like Ragi, Jowar, bajra etc. in the food basket under PDS. These crops are not only nutritious but also climate smart (rainfall resilient). Such crops to be cultivated again need market for the present harvest.
  • The millet crops are referred to as ‘coarse grains’, they should be referred as “climate smart nutria-millets”. 👌 A proposal to UN to declare one year of this decade as International year of Underutilized and Bio-fortified Crops. Next year is considered as International Year of Pulses. Urgent requirement is greater investment in research on 👌“orphan crops” (a set of minor crops that tend to regionally important but not traded around the world) so that the yield potential is substantially enhanced.
  • An area of concern is post-harvest management of harvested crops as there is a mismatch between production and post-harvest technologies which lead to losses to both producers and consumers.
  • Value added products will have to be prepared in order to promote greater investment in post-harvest technology. Cold storages and cold chains are needed. The recent potato crisis in WB, UP and Bihar could be avoided had there been cold storages in Punjab, Haryana Region.

Transforming India’s Aspiration Districts: A Developmental Journey

India jumped by 42 ranks in ’Ease of Doing Business” report released by World Bank. India is the only country to achieve this quantum jump.

India’s economic growth prospect is on a positive note but the social sector faces severe development challenges

  • India stands at 131 position out of 188 nations in Human Development Index, 2016 of UNDP

  • Ranked 100 out of 119 countries in the Global Index

  • National Family Health Survey reveals that one in every two women is anemic; one in every three children is stunted; one in every four children are in malnourished and one in five children is wasted.

The picture seems to be different as a closer look is taken. For example

Percentage of stunted children in Kerala is 19.7 % but in Bihar is 48.3%. The situation is same in other fields across the state. In short, the percentage varies from state to state. On the whole around 200 districts across India distort the national averages.

A focused implementation of various government schemes through convergence on mission mode with real-time monitoring mechanism at district level is expected to transform these districts and attain best figures in 3 - 5 years.

The wide spread disparity in development indicators both economic and social among various regions of the country had drawn the attention of policy makers.

The identified backward districts are largely represented in few states like undivided Bihar, MP, UP and Rajasthan. The problem with the schemes was

  • The schemes need to be sector or area specific

  • There is lack of convergence and absence of centralized monitoring mechanism.

  • Another issue with policy formulation was ‘one size fits all’ approach.

  • Only a fraction of amounts reached the districts.

  • Lack of involvement of people (classic example was eradication of polio)

👌 Government has launched ‘Transformation of Aspirational Districts’ program on the occasion of 75th anniversary of Quit India Movement. Prime Minister interacted with District collectors on Aug 9 2017. The broad contours of the program are

  • Convergence of Central and State schemes

  • Collaboration of Central, Sate level ‘Prabhari Officers and District collectors’

  • States as Drivers

  • Adjustment of schemes

  • Real time data

  • Competition among districts and driven by Mass Movement.

Details of the 11 states can be seen in the table given below.

Table contain shows the List of 115 Aspirational Districts

Table contain shows the List of 115 Aspirational Districts

List of 115 Aspirational Districts

State

Name of Districts

Andhra Pradesh

Vizainagram, Visakhapatnam, Cuddapah

Arunachal Pradesh

Namsai

Assam

Darrang, Udalgiri, Dhubri, Hailakandi, Barpeta, Goalpara, Baksa

Bihar

Katihar, Khagaria, Aurangabad, Begusarai, Purnia, Banka, Sheikhpura, Gaya, Araria, Jamui, Sitamarhi, Muzaffarpur, Nawada

Chhattisgarh

Korba, Bastar, Mahasamund, Bijapur, Dantewada, Kanker, Kondagaon, Narayanpur, Rajnandgaon, Sukma

Gujarat

Narmada, Dahod

Haryana

Mewat

Himachal Pradesh

Chamba

Jammu and Kashmir

Kupwara, Baramula

Jharkhand

Sahebganj, Godda, Latehar, Pakaur, Lohardaga, Palamu, Purbi Singhbhum, Ramgarh, anchi, Simdega, West Singhbhum, Bokaro, Chatra, Dumka, Garhwa, Girdih, Gumla, Hazaribagh, Khunti

Karnataka

Yadgir, Raichur

Kerala

Wayanad

Madhya Pradesh

Damoh, Chhatarpur, Singrauli, Rajgarh, Barwani, Guna, Vidisha, Khandwa

Maharashtra

Nandurbar, Washim, Gadchiroli, Osmanabad

Manipur

Chandel

Meghalaya

Ribhoi

Mizoram

Mamit

Nagaland

Kiphire

Odisha

Rayagada, Kanddhamal, Koraput, Kalahandi, Gajapati, Malkangiri, Dhenkanal, Balangir

Punjab

Firozpur, Moga

Rajasthan

Baran, Dholpur, Jaisalmer, Karauli, Sirohi

Sikkim

West Sikkim

Tamil Nadu

Ramanathapuram, Virudhunagar

Telengana

Bhoopalpalli, Khammam, Asifabad

Tripura

Dhalai

Uttar Pradesh

Chitrakoot, Chandauli, Balrampur, Siddarthnagar, Bahraich, Fatehpur, Sonabhar, Shrawasti

Uttarakhand

Haridwar, Udham Singh Nagar

West Bengal

Murshidabad, Nadia, Maldah, Dakshin Dinajpur, Birbhum

  • Out of 115 districts NITI Aayog will drive 30 districts, 35 districts by Ministry of Home Affairs and remaining 55 districts are distributed among Ministries of Health and Family Welfare; Women and Child development, Panchayat Raj, Agriculture and Farmer’s Welfare, Human Resources Development, Rural development, Drinking Water and Sanitation, Housing and Urban affairs, Water Resources, Power, Social Justice and Tribal Affairs.
  • The sates to be supported by GOI in making concerted effort to improve performance of key parameters in district by 2022. NITI Aayog would coordinate assistance and create robust MIS for measuring performance.
  • Key Performance Indicators: Identification of KPI, monitor the progress made in these indicators and carry out annual ranking. Primary objective is to improve the quality of life by improving social indicators and basic infrastructure and raise the income standards of the citizens.

👌 📝 The 5 sectors identified are

  1. Health and Nutrition (30%)

  2. Education (30%)

  3. Agriculture and Water Resource (20%)

  4. Basic Infrastructure and (10%)

  5. Financial Inclusion & Skill formation (10%)

District level KPIs have been chosen that captures efforts, commitments and progress made by stake holders.

KPIS in Health and Nutrition include

  1. Maternal and Child Health
  2. Infant Nutrition
  3. Antenatal Care and Nutrition
  4. Immunization
  5. Physical Infrastructure
  6. Human Resources for Health

Education KPIs consists of

  1. Net Enrolment Ratio
  2. Physical Infrastructure
  3. Learning Outcomes
  4. Literacy Rate and compliance with Right of Education

Agriculture KPIs include

  1. Water positive investments and employment
  2. Crop insurance under PMFBY
  3. Critical inputs on usage and supply

Basic infrastructure covers

  1. Roads
  2. Toilets
  3. Water
  4. Housing
  5. Electricity
  6. Internet Connectivity
  • Two agencies Tata Trusts and Bill and Melinda Gates Foundation to carry out household surveys using stratified random sampling technique on quarterly basis.
  • Noteworthy innovations include Central and State Government Officers at level of Additional/Joint secretary as ‘Prabhari’ and Nodal officers. These officers to act as a bridge between the district and the state and the central government.
  • At the district level, District Magistrate or the Collector would be the key official. An Empowered Committee od secretaries (ECS) will supervise the implementation of program and make necessary policy adjustments.
  • States will constitute a team comprising of Chief Secretary and Secretary, Planning/Finance to oversee the implementation and make necessary policy adjustments at state level.
  • The district level team to prepare a base line report of current status of different indicators and based on the resources available. Would also prepare year wise targets.
  • The central representative would be visiting the district atleast once in 2 months and prepare a report for NITI Aayog, which would analyse and place the findings for consideration to ECS.
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Union Budget: Yojana March 2018 Summary (In Hindi)

Dr. Manishika Jain explains Yojana March 2018: Union Budget

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