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Demonetisation increased tax collections and mitigated the impact of a slowdown in the economy, which resulted in the Centre’s fiscal deficit standing at 3.51 percent of gross domestic product (GDP) during the financial year that ended in March 2017, which is almost close to the budget objective.The overall receipts were just 14.4 billion rupees, whilst the total expenditures were 19.75 billion rupees, resulting in a deficit of 5.35 billion rupees. According to the revised assessment, the shortfall totals 100.1% of what was originally projected.During the 2016–2017 fiscal year, the revenue deficit equaled 2.02 percent of GDP.During the course of the fiscal year, the government collected a total of Rs 11.02 lakh crore in net tax revenues; this figure was more than the Rs 10.89 lakh crore that was anticipated in the budget.
Union Budget Analysis
The total receipts are predicted to be Rs 14.44 lakh crore, which is equal to 211 billion dollars and represents an increase of 15.5%. Borrowings and other liabilities are not included in this figure.An estimate places the total amount of gross revenue receipts at Rs 13.77 lakh crore (US$ 201 billion), with tax revenues accounting for Rs 10.54 lakh crore (US$ 154 billion) and non-tax income accounting for Rs 3.22 lakh crore (US$ 47 billion).
An rise of 10.8 percentage points over the prior year’s total expenditures brings the expected figure to Rs 19.78 lakh crore (US$ 289 billion).
It is anticipated that expenditures not included in the plan will rise by 9.1 percent, reaching a total of Rs 14.28 lakh crore (US$ 208.6 billion).
The expenditure on the plan is estimated to be Rs 5.50 lakh crore, which is equivalent to $80.3 billion, representing a 15.3 percent rise over the prior year.The categories of “Plan” and “Non-Plan” will be eliminated beginning in 2017–18. Every new plan that is approved must include both an expiration date and an evaluation of the results.
The Estimated Fiscal Deficit of India in the Budget of 2016-17
The rate of economic expansion has picked up, reaching 7.6 percent in 2015-16.The International Monetary Fund has identified India as a “bright light” in the middle of a declining global economy.The Consumer Price Index inflation rate has decreased to 5.4%.
At the end of this financial year, it is anticipated that the Current Account deficit will be equivalent to 1.4% of the Gross Domestic Product (GDP).The country’s foreign exchange reserves reached their greatest level ever, which was over US$ 350 billion.
The government has decided to keep the budget deficit target at 3.9 percent of GDP for the 2015–2016 fiscal year and 3.5 percent of GDP for the 2016–2017 fiscal year.
In the Revenue Deficit objective for RE 2015-16, we reduced it from 2.8 percent to 2.5 percent.
Union Budget 2016-17 Highlight
Expenditure-The overall expenditure in RE came to Rs 17.85 lakh crore (US$ 260.7 billion), which was above the budgeted amount of Rs 17.77 lakh crore (US$ 259.6 billion) by Rs 7,914 crore (US$ 1.16 billion).The unplanned expenses in RE were comparable to those in BE. Nevertheless, plan expenditures exceeded the BE by Rs 11,920 crore, which is equivalent to US$ 1.74 billion. As a result, the BE had to be revised to Rs 4.77 lakh crore, which is equivalent to US$ 69.7 billion; this represents an increase of 2.6%.The amount spent on the Defense sector decreased by nine percent, which is equivalent to Rs 22,091 crore (US$ 3.22 billion), during RE. In contrast, the amount spent on Pensions and Subsidies increased by five and eight percent respectively.The initial cost of giving LPG connections to families with incomes below the poverty line (BPL) has been budgeted at Rs 2,000 crore, which is equivalent to $293.5 million.
The social sector, comprising the medical industry-A brand-new health protection programme will offer medical coverage of up to one lakh rupees (1,454 dollars) per household. A supplementary top-up package worth up to Rs 30,000 (about $436) would be made available to senior citizens.
The Prime Minister’s Jan Aushadhi Yojana will see the opening of 3,000 new stores during the 2016–2017 fiscal year.
Creating New Jobs-For the first three years of a new employee’s employment, the Government of India will make a contribution to the Employees’ Provident Fund Organization (EPFO) equal to 8.33 percent of their annual salary. For this programme, the budget allocates Rs 1,000 crore, which is equivalent to $146 million.All assessors who are required to undergo statutory audits in accordance with the Act will be eligible to claim the deduction provided for in Section 80JJAA of the Income Tax Act.Under the National Career Service, 100 Model Employment Centres are expected to be operational by the conclusion of the 2016–2017 fiscal year.
Conclusion
It is intended for the initiative “Transform India” to have a substantial impact on the economy as well as the lives of the people.
Concentrate on Weak Points by Doing the Following-Pradhan Mantri Fasal Bima Yojana (PMFBY), A brand-new health insurance programme designed to protect against the costs of hospitalisation. Families living Below the Poverty Line (BPL) are given the opportunity to connect to a cooking gas line.
Maintain the continuing reform agenda and work toward getting the Goods and Services Tax bill and the Bankruptcy and Insolvency law passed into law as soon as possible.Give AADHAR statutory backing to ensure worthy people receive benefits.Removing barriers from the transport industry and offering targeted marketing to encourage gas discoveries and exploration. Enacting a law to resolve financial corporations provides a legal framework for dispute settlement and re-negotiations in PPP projects and utility contracts.Reform the banking industry and list general insurers FDI policy changes
