The Finance Minister, Mr. Arun Jaitley presented the first full fledged budget of the Modi Sarkar on 28th February 2015. The much spoken of Big Bang Reforms were missing. The Budget did lay out a path of fiscal prudence as expected and seemed to be more implementation oriented than making provisions for any great schemes, as is usually the want. The Budget seeks to strike a middle ground between increasing public investment and controlling fiscal deficit. The Budget emphasized on the increase of the involvement of the States in economic growth, with continuation of programs for social welfare and a move towards a cashless society.
Coming to specifics on the Budget, wealth tax has been abolished. The super rich – those with income over Rs. 1 crore, will have to shell out an additional two percent surcharge. While there is no change in tax slabs, corporate tax will be reduced to twenty five percent over a period of four years. Though the general expenditure to households is likely to increase on account of the increased rate of service tax, it would be possible to claim complete exemption from income tax up to Rs. 4,44,200. Besides there will be full exemption for contribution to Swachch Bharat.
There is a thrust to infrastructure spending with a Budget layout of Rs. seventy thousand crore. Tax free bonds will be permitted for the irrigation and rail road sector. There will be a new push to PPP projects in the infrastructure sector, with the government bearing the major portion of the risk. Government will also be setting up five Mega Power projects of 4000 MW each.
The Budget has also paid a good deal of attention to the education sector. Six more All India Institute of Medical Sciences (AIMS) will be set up in Jammu and Kashmir, Punjab, Tamil Nadu, Himachal Pradesh, Assam and Bihar. There will be an IIT in Karnataka as well and the Indian School of Mines will be upgraded to an IIT as well. Amritsar will have an Institute of Horticulture and Kerala an Institute of Disability Studies. Arunachal Pradesh will have an Institute of Film Production, Gaming and Animation, while both Jammu and Kashmir and Andhra Pradesh will have an Indian Institute of Management.
There is also an increase of almost ten percent in defense outlay and the ‘Make in India’ program is expected to feed the defense sector. The common man is expected to benefit out of the implementation of GST, as well as the triple offering of Aadhar, Jan Dhan Yojna and mobile phones.
A goal of Housing for all by 2020 is envisaged and about six crore toilets will come up all over the country. The government proposes to tap into the nine thousand crore unclaimed fund lying in the Provident Fund Schemes. This will be used for the benefit of the senior citizens. A universal social security system for all Indians is proposed and there is also a new scheme for physical aids and assisted living for citizens over eighty years of age.
All–in–all, the Budget seems to have addressed the nitty gritty of planning, but it is only proper implementation that will deliver.