The Union Budget for 2018-19, presented by Finance Minister Arun Jaitley, has scores of grand plans which will certainly help targeted groups and nudge the economy towards higher growth path. However, the big question is: Will small leakages and delays hamper their implementation?
Projects Today welcomes the resolve of the Finance Minister to maintain momentum of the public sector project spending. The 20.8 percent increase in the capital outlay for various infrastructure projects, launch of National Health Insurance scheme, MSP to farmers at 1.5 percent of the cost of production and housing for all are expected not only to generate more jobs, but also increase rural demand for consumer goods which in turn will help the Indian corporate world, waiting for revival in domestic demand.
Infrastructure and Financial Sector Development
Continuing the emphasis on setting up modern infrastructure, this year’s budget indicates an overall increase of 20.8 percent in the total capital outlay. The government’s estimated budgetary and extra budgetary expenditure on infrastructure for 2018-19 has been increased to Rs 5.97 lakh crore against estimated expenditure of Rs 4.94 lakh crore in 2017-18.
The FM said, “Our country needs massive investments estimated to be in excess of Rs 50 lakh crore in infrastructure to increase growth of GDP, connect and integrate the nation with a network of roads, airports, railways, ports and inland waterways and provide good quality services to our people.”
To take care of the growing needs of urban India, the government has rolled out two programmes – Smart Cities Mission and AMRUT.
Under the Smart Cities Mission 99 cities have been identified with an outlay of Rs 2.04 lakh crore. These cities will have a smart command and control centre, smart roads, solar rooftops, intelligent transport systems, smart parks. Projects worth Rs 2,350 crore have been completed till December 2017.
The AMRUT programme focuses on providing water supply to all households in 500 cities. As per the budget, the state-level plans of Rs 77,640 crore for 500 cities have been approved. Water supply contracts for 494 projects worth Rs 19,428 crore and sewerage work contract for 272 projects costing Rs 12,429 crore have been awarded.
Railways and Highways
The Union Ministry of Road Transport and Highways is confident of commissioning National Highways of over 9,000 km by March 2018. The Bharatmala Pariyojana has been set on roll for providing seamless connectivity of interior and backward areas and borders of the country to develop about 35,000 km in Phase-I at an estimated cost of Rs 5,35,000 crore.
Strengthening the railway network and enhancing the Railways’ carrying capacity has been a major focus of the Government. The Railways’ capex for the year 2018-19 has been pegged at Rs 1,48,528 crore. The project plans of 18,000 km of doubling, third and fourth line works and 5,000 km of gauge conversion is expected to convert almost the entire network into Broad gauge. During 2017-18 around 4,000 km of electrification of railway network is targeted for commissioning.
In Mumbai, the rail transport system is being expanded and augmented by adding 90 km of double line tracks at a cost of over Rs 11,000 crore. Additionally, 150 km of additional suburban network is being planned at a cost of over Rs 40,000 crore. In Bengaluru, a suburban network of 160 km at an estimated cost of Rs 17,000 crore is being planned.
Under the Clean Ganga programme, 187 projects have been sanctioned at a cost of Rs 16,713 crore. Of these, 47 have been completed.
The Government had approved a comprehensive textile sector package of Rs 6000 crore in 2016 to boost the apparel and made-up segments. It now proposes to provide an outlay of Rs 7148 crore for the textile sector in 2018-19.
Under the Digital India programme, a sum of Rs 3,073 crore will be invested in 2018-19 on research, training and skills in robotics, artificial intelligence, digital manufacturing, big data analysis, quantum communication and internet of things. The Department of Science & Technology will launch a Mission on Cyber Physical Systems to support establishment of centres of excellence.
A sum of Rs 10,000 crore has been provided in the budget for creation and augmentation of Telecom infrastructure. The Government also proposes to set up five lakh wi-fi hot spots which will provide broadband access to five crore rural citizens.
Agriculture, Job Creation and Rural Infrastructure
A sum of Rs 14.34 lakh crore has been allocated for creation of livelihood and infrastructure in rural areas. Apart from employment due to farming activities and self-employment, this expenditure is expected to create employment of 321 crore person days, 3.17 lakh km of rural roads, 51 lakh new rural houses, 1.88 crore toilets, and provide 1.75 crore new household electric connections, besides boosting agricultural growth. Farmers will be paid 50 percent more than the cost of their produce under the Minimum Support Price (MSP) scheme.
A corpus of Rs 2,000 crore has been set aside for development and upgrading the existing 22,000 rural haats into Gramin Agricultural Markets (GrAMs). Further, a sum of Rs 1,400 crore has been allocated for boosting investment in food processing.
Operation Greens programme, with a budgetary allocation of Rs 500 crore, will promote Farmer Producers Organizations (FPOs), agri-logistics, processing facilities and professional management. The National Bamboo Mission, with an outlay of Rs 1,290 crore, will promote the bamboo sector in a holistic manner.
The FM proposes to set up a Fisheries and Aquaculture Infrastructure Development Fund (FAIDF) for the fisheries sector and an Animal Husbandry Infrastructure Development Fund (AHIDF) for financing infrastructure requirement of the animal husbandry sector with a total corpus of Rs 10,000 crore.
The institutional credit for the agriculture sector has been raised from Rs 10 lakh crore in 2017-18 to Rs 11 lakh crore for 2018-19.
Electricity for All
A sum of Rs 16,000 crore has been provided for Saubhagya Yojana for providing electricity to all households of the country.
House for All
Under Prime Minister Awas Scheme Rural, 51 lakh houses have been constructed in 2017-18 and 51 lakh houses will be set up during 2018-19. In urban India the government intends to construct 37 lakh houses.
Education: Rs one lakh cr over next four years
To step up investments in research and related infrastructure in premier educational institutions, including health institutions, a new scheme named, Revitalising Infrastructure and Systems in Education (RISE) with a total investment of Rs 1,00,000 crore in next four years, will be launched.
To provide the best quality education to tribal children in their own environment, Ekalavya Model Residential School, will be set up. To realise this mission, it has been decided that by 2022, every block with more than 50% ST population and at least 20,000 tribal persons, will have a model school.
Under the Prime Minister’s Research Fellows (PMRF) scheme, to be launched this year, 1,000 best B.Tech students each year from premier institutions will benefit. The scheme will provide them with facilities to do Ph.D in IITs and IISc, with Fellowship.
Health: Steps towards Universal Health Coverage
Two major initiatives have been proposed under the Ayushman Bharat programme, aiming at making path-breaking interventions to address health holistically, in primary, secondary and tertiary care system, covering both prevention and health promotion.
The National Health Policy 2017 envisions Health and Wellness Centres as the foundation of India’s health system. These 1.5 lakh centres will bring health care system closer to the homes of people. These centres will provide comprehensive health care, including for non-communicable diseases and maternal and child health services. These centres will also provide free essential drugs and diagnostic services. The Government on its part would commit Rs 1200 crore this year and has invited contributions from the private sector through CSR and philanthropic institutions in adopting these centres.
The government will launch a flagship National Health Protection Scheme to cover over 10 crore poor and vulnerable families (approximately 50 crore beneficiaries), providing coverage up to Rs 5 lakh rupees per family per year for secondary and tertiary care hospitalization.
The Central government intends to set up 24 new Government Medical Colleges and Hospitals by upgrading existing district hospitals in the country. This would ensure that there is at least one medical college for every three parliamentary constituencies and at least one government medical college in each state of the country.
In addition to cutting the corporate tax rate from 30 percent to 25 percent to all companies with an annual turnover up to Rs 250 crore, the budget has provided Rs 3,794 crore to the Medium, Small and Micro Enterprises (MSMEs) sector for giving credit support, capital and interest subsidy and innovations.
MUDRA Yojana, launched in April 2015, has led to sanction of Rs 4.6 lakh crore in credit from Rs 10.38 crore MUDRA loans. 76 percent of loan accounts are of women and more than 50 percent belong to SCs, STs and OBCs. It is proposed to set a target of Rs 3 lakh crore for lending under MUDRA for 2018-19, after having successfully exceeded the targets in all previous years.
Total Revised Estimates for expenditure in 2017-18 is Rs 21.57 lakh crore (net of GST compensation transfers to the states) as against the Budget Estimates of Rs 21.47 lakh crore. As a result, the revised fiscal deficit estimates for 2017-18 is Rs 5.95 lakh crore which works out to 3.5 percent of GDP. This is higher than the earlier target of 3.2 percent set for the fiscal. The Finance Minister has projected a fiscal deficit of 3.3 percent of GDP for 2018-19.