BUDGET EXPECTATIONS 2016-17
India’s GDP growth rate stood at 7.3% year on year in last 3 months of 2015, decreasing further from an upwardly revised 7.7 % growth in previous quarter. The 3.9% target of fiscal deficit is to be met by the government and it is expected to set a target of 3.8% for the next year. India’s current account deficit stood at $8.2 billion in September 2015 which was 1.6% of GDP.
Among some flagship programs being promoted in the last budget some got overwhelming success while some just created nothing more than hype. MGNREGA: Finance minister had increased the budget to 34699 crore in previous budget but a scheme with 85% leakages can’t be proclaimed as successful. Pradhan Mantri Jan Dhan Yojana: Around 5.48 crore accounts have zero balance of the 7.5 Crore accounts opened so far which indicates its failure. Pradhan Mantri Krishi Sinchai Yojna with a budget of 1000 crore rupees seems to have benefited farmers with micro-irrigation initiatives coming up.Pradhan Mantri Mudra Yojna: Under this scheme a total of 21,586 crore have been disbursed so far benefiting 33.31 lakh people. Soil Health Card scheme: The 568.54 crore scheme is clearly a failure due to its slowness in implementation with only 2.83 crore samples tested out of the 5.84 crore collected.
What can we expect in the coming year?
Skill development: With Skill development as an ancillary to the make in India campaign government is expected to come up with schemes and monetary incentives under Skill development to develop small- scale entrepreneurship initiative to impart specific training to unskilled labour.
Higher investment in education: Investment in education is expected to increase with increasing infrastructures for schools which in turn will provide a boost for skill India campaign and in turn the make in India initiative
Tax exemptions and Tax deductions: Service tax limit is expected to be increased to 25 lakh from current 10 lakh rupees which will provide advancement for ease of doing business
Savings: There should be overall increase in the deduction cap which is currently consolidated for long term savings including provident funds, pension funds and equity schemes to 1.5 lakh. Tax deductions under section 80C need to be revised. This will encourage savings
Housing: The current limit of the deduction for interest on housing loans which currently stands at 2,00,000 should be increased in a move of easy housing for common man . GST: Government should come up with a proper road map for the implementation of GST in this budget session. Service tax is a bane for all start-ups and with government pushing Small and medium scale enterprises, its implementation is imperative
Reduction in Corporate Tax rate. We expect a reduction in corporate tax base rate which stands at 30% now to around 25 %
Digital India: Government needs to come up with avenues for public private partnership which can shape the digital India Initiative
Healthcare sector : The government is expected to come up with health insurance scheme for senior citizens and other additional benefits
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