Tag Archives: Budget

People centric Budget for self-reliant Madhya Pradesh; no new taxes proposed

March 2, 2021 Newsroom24x7 Network Leave a comment

Newsroom24x7 Network

Bhopal: Madhya Pradesh Chief Minister Shivraj Singh Chouhan has said that the State budget, characterized by a 42 percent increase in capital expenditure in the new fiscal year compared to the previous year, presented in the Vidhan Sabha on Tuesday 2 March 2021 will take the State on the path of progress. Madhya Pradesh will move rapidly towards the path of self-reliance.

Madhya Pradesh Finance Minister Jagdish Dewra presenting the Budget in Assembly

The 2021-22 budget, presented in the Assembly by Finance Minister Jagdish Dewra, proposes nine new missions for self-reliant Madhya Pradesh and provides for adequate amount for necessary facilities in basic areas.

The Chief Minister said the new Budget will to make life easier for citizens, will become a medium for ensuring the good of all as symbolised by the ancient saying in Sanskrit: ‘Sarve Bhavantu Sukhinah, Survey Santu Niramaya’.

The Chief Minister Shri Chouhan said:

Budget for the people

This budget is a special budget prepared with the important goal of creating a self-reliant Madhya Pradesh.

Work will be done in mission mode for the creation of self-dependent Madhya Pradesh, for which 9 new missions will be work for good governance, physical infrastructure, education and health, economy and employment in the four regions.

There is a provision for starting nine medical colleges in the budget.

Chief Minister Chouhan said that Madhya Pradesh’s budget presented today symbolises people’s aspirations and expectations. This budget is a reflection of the vision and mission of the government. This will ensure the interest of the common people are met by putting back the economy on track after the adverse circumstances of the Corona period.

Budget to create self-reliant Madhya Pradesh

The Chief Minister said that self-reliant Madhya Pradesh was a commitment made by the State government in September 2020 to fulfill the goal of Prime Minister Narendra Modi’s self-reliant India. Road map of self-reliant Madhya Pradesh was defined after inviting suggestions from the public. Infrastructure, health education, economy and employment were made the immediate priority. Keeping in focus these priorities, the budget has been prepared and it has a long-term perspective.

9 new missions will work in mission mode

Chief Minister Chouhan said that there are four major pillars of self-reliant Madhya Pradesh. Under this, there will be nine new missions. Mission for building infra, Mission Gramodaya and Mission Nagarodaya will be started under the physical infrastructure plan. Mission Niramya and Mission Bodhi will be started under Education and Health. Mission Earth, Mission Daksha and Mission Self-Reliance will be started under Economy and Employment. Apart from this, a mission will also be started under the self-reliant Madhya Pradesh roadmap, an important pillar, called Mission Jana-gana. The government will work day and night in mission mode to achieve the goals of building self-reliant Madhya Pradesh.

Budget for infrastructure development, education, health and agriculture

The Chief Minister said that a provision of Rs 44,152 crore has been made for irrigation sector for infrastructure development. An amount of Rs 40,958 crore will be spent on education and related areas. The provision for agriculture is Rs 35, 353 crore, Rs 15, 622 crore for health and related areas, Rs 11,950 crore for poor welfare, Rs 11,136 crore for children, students and youth and Rs 10,000 cr for women.

Major Budget Features

Chief Minister Chouhan said that there is 22 percent more amount in the budget of Madhya Pradesh than last year. In the year 2021-22, the GSDP of Madhya Pradesh can reach beyond 10 lakh crore rupees, which would be a record. The fiscal deficit is 4.5 percent of the state’s gross domestic product. There is a target to reduce it further to 3 percent in the next three years. The revenue deficit is 0.73 percent of the state’s gross domestic product. It is also targeted to change from deficit to excess in the next 3 years. Due to the corrective steps taken by the government in the last 11 months, additional financial resources of Rs 19, 353 crore are being received from the Government of India. No new tax is proposed in the budget nor has any tax rate been increased.

Chief Minister Shri Chouhan said in every village panchayat, one ration shop will be opened and one third shops will be operated by women. Women police stations will be started in every district. Under the Ladli Laxmi Yojana in the budget, the provision of a total amount of more than 10, 000 crores for women, including the provision of more than Rs 900 crores, is a reflection of the state government’s goal of women welfare.

Focus on poor welfare and public welfare

The Chief Minister said that there are appropriate provisions in the budget for the welfare of the poor and welfare of the common man. Beneficiaries will be benefited under Sambal scheme. A provision of Rs 600 crore has been made for this scheme. Rs 3,200 crore under Mukhyamantri Kisan Kalyan Yojana, Rs 602 crore under Mukhyamantri Gram Sadak Yojana, Rs 1,500 crore for CM Rise School, Rs 400 crore in Annapurna Yojana, water-to-house works under the Jal-Jeevan Mission 5,762 crores for, Rs. 3,035 crores for National Health Mission, Rs. 922 crores under Ladli Laxmi Yojana, Rs. 4,592 crores in Atal Krishi Jyoti Yojana, Rs. 300 crores for establishment of new medical college, 400 for improvement in higher education. Crore, Rs 2,500 crore for Pradhan Mantri Awas Yojana, Rs 5,739 crore for road, bridge construction, Rs 397 crore for vocational skills training.

India, World

Who will listen to the farmers?

September 26, 2019 Newsroom24x7 Network Leave a comment

Suresh Ediga

I happened to be at the farm over the weekend, when I took the call from the farmer. He was calling from Maharashtra and when he learnt I was farming here (in the US)- first he was surprised then he got curious and started a barrage of questions

Do American farmers also commit suicide?
Yes, unfortunately. It is not as rampant as it is in India

What problems do they have?
They have the same problems as you do. They don’t get a fair price for their produce. Their subsidies are given to the companies. The crop insurance works for the insurance companies not for the farmers

Farmers here don’t get much help. How about farmers there, don’t they get any help?
The farmers here own anywhere from 50-60 acres to well over 1000 acres. The small farmers own anywhere from 60 to 100 acres.

Really, they own 100 acres and still they are small farmers?
Yes. And they are working alone in the farms, isolated and away from the rest of the community. When they find themselves in trouble there is no helpline for them nor any help coming their way

Do they have water problems?
No. They have plenty of water. The entire farm is connected with drip irrigation.

The farmer went on to talk about how there have been very little to no rains. There is drought and no respite from weather. Yes, there are upcoming elections and so there is some hope that the government will do something.

In some other news about farmers which, by the way, is hard to get these days

Onion prices are on the rise and the government is forced to do something only because of elections. They are now importing onions to flood the market with more onions to bring the price down

As per the Rajasthan State Co-operative Bank Limited (RSCB) website, a total of 20,79,492 farmers are registered for Kharif. But only 13,71,761 farmers got the loans leaving out almost 7 lakh farmers. So far, the disbursed loan amount stands at Rs 28,60.13 crore for this season.

And we have the Finance minister rolling back everything in the budget, announcing major cuts in corporate taxes, having back to back meetings with Corporates, but no such in person meetings with the farmers

The problem of farmer suicides is only getting worse. How can a government attempt to fix the problem when they can’t even acknowledge and face the reality. Ncrb has been shut since 2016, RTI has been muted – how will and who will listen to the farmers.

Are we willing to listen?
Are we willing to question?
Are we willing to do something, just anything?

The author, Suresh Ediga, has been involved in volunteering for more than 18 years now. And during the course of these 18 years, he has taken several projects at an individual level and has been able to implement them successfully.

economy

FM, GDP, Economic Survey: Where FM has bungled on the Budget?

July 13, 2019 Newsroom24x7 Network Leave a comment

Bhagyashree Pande

The Chief Economic Advisor (CEA), in the Economic Survey put out a day before the budget, has taken the latest GDP of Rs 1.9 lakh cr with 11% growth as put out by the Controller General of Accounts (CGA)¹ because they were released as late as 31 May 2019. These last set of figures are important because they give a complete picture of the economy and are used for any projections or any future estimates. Using the numbers put out by CGA this time was important because the budget came only in July as against February when the FM does not have a complete picture of the entire year.

Never in the history of Indian budget in the last 70 years has there been a discrepancy in Budget numbers put out by the FM and those put out by her own department. However in the budget of 2020 Finance Minister Nirmala Sitharaman has obviously bungled on all the numbers that she projected to tell the India growth story. What is the mistake? There has been a discrepancy in the GDP numbers taken in the Budget and the figures used in the Economic Survey by the Chief Economic Advisor.

The discrepancy of using the GDP figures taken by FM and those used by CEA project the economy in a different light altogether. The FM has stated that the nominal GDP is at Rs 1.88 lakh cr growing at 12%, while the Economic Survey states the nominal GDP at Rs 1.9 lakh cr growing at 11%. Here is what went wrong and why? The CEA in the Economic Survey put out a day before the budget has taken the latest GDP of Rs 1.9 lakh cr with 11% growth as put out by the CGA because they were released as late as 31 May 2019. These last set of figures are important because they give a complete picture of the economy and are used for any projections or any future estimates. Using the numbers put out by CGA this time was important because the budget came only in July as against February when the FM does not have a complete picture of the entire year.

Why did the FM not use the latest figures? The FM despite having the latest data used outdated interim budget figures of January .When the interim budget was announced by FM in February the growth was looking buoyant at 6.6%. But in the last quarter this shrunk to 5.8% in 2019. The true story of falling growth can be seen in the actual quarterly growth in four quarters of 2019 – Q1 7.7%, Q2 8.2%, Q3 6.6%, Q4 5.8%. This falling picture in the last two quarters pulls down the claims of Acche Din of the Modi govt.

What difference do the two different estimates make to the Budget process? The FM by using a stale data does not want to admit that the economy has grown slowest since 2014 when Modi govt came to power. This despite the Modi government in 2016 changing the methodology of GDP to more current prices. But now a dismal economic picture shows its own govt in a poor light. The FM on the floor of the house claimed that the data used by her in Budget and data used in Economic Survey are not going to make any difference in the future projections. How? In the first place there is a gaping hole in the revenue collections. The Economic survey estimates the tax revenue collection at Rs 15.6 Lakh cr as against the government claim of Rs 17.3 lakh cr. Similarly govt spent Rs 24.6 lakh cr according to the budget, but the economic survey shows govt spending at Rs 23.1 lakh cr. Thus the tax collection and spending have nearly a Rs 2 lakh cr difference between what the FM shows and what the Economic Survey states. The data used by FM as a base will be used for growth in the future as also for various revenue and expenditure. A higher base will mean higher projections but reality in this case is otherwise now. When the FM has lower collections it will have less money for various programs and will have to borrow more thereby adding to the fiscal deficit. Managing the fiscal deficit within the 3% target is a constant bother for the government more so in a falling economy with shrinking incomes.

What is the implication of these differing figures at large? One there has been a continuous tirade by the opposition against the Modi govt that they have been fudging figures to give a false impression of “Acche Din” (good days). In the Budget this doubt has been proved by the FM putting out stale figure to make the growth story look good when the reality is otherwise as projected by Chief Economic Advisor using latest figures. Using differing sets of data gives the impression that the FM is hiding something. Second, this discrepancy of data happens at a time when the FM is trying to roll out a red carpet to the industry as well as foreign investors selling the India growth story. Any investor who is keen to invest will look at details of country’s financial health first. This kind of data distrust will raise the doubts in the minds of investor domestic or foreign. Third, given these projections of an economy that is healthier than actually is a dangerous sign for the govt as it will show projections of greater buoyancy when they are unlikely to be. The targets set by it for the coming year are on an incorrect base whether of revenues, expenses, allotment to various programs etc.In future which is the set of data to be believed if the budget is on stale data? When the lid has blown on discrepancy of data the FM instead of course correction is looking to prove her point. Wonder who is FM trying the hoodwink? It will be for the FM to rise above this mess and present a fresh budget giving out real projection, real targets and real collections? This will be the test of trust of the Modi government. Otherwise the Modi government will prove the skeptics correct. Does it want to?

¹Controller General of Accounts (CGA) is:

The Principal Advisor on Accounting matters to the Union Government
Responsible for establishing and managing a technically sound Management Accounting System
Responsible for preparation and submission of the accounts of the Union Government
Responsible for exchequer control and internal audits

Courtesy: Poppolitics.com

India

India’s Budget Advances Economic Reform, but Fiscal Settings Unchanged

July 10, 2019 Newsroom24x7 Network Leave a comment

Newsroom24x7 Network

London/Hong Kong/Mumbai: India’s new budget outlined some economic reforms that could support the economy, but its fiscal stance was left broadly unchanged, with no plans for meaningful consolidation, says Fitch Ratings.

Overall, the budget points to policy continuity on the part of the ruling Bharatiya Janata Party (BJP) following May’s general election.

Newly appointed Finance Minister Nirmala Sitharaman presented India’s budget for the fiscal year ending March 2020 (FY20) on 12 July 2019. It is the government’s first major economic policy announcement since the BJP strengthened its political position by winning an outright majority in the lower house. The main thrust of policy measures and fiscal targets is broadly consistent with the interim budget announced prior to the election.

The budget indicates that the BJP will continue its economic reform efforts in its second term and avoid the fiscal loosening that might have been expected given the country’s sluggish growth, lower lending by non-bank financial institutions and election promises to support rural voters. However, it falls short of signalling prospects for significant fiscal consolidation in the next few years. The medium-term fiscal deficit targets of 3.0% deficits in FY21 and FY22 make it highly unlikely. Fitch views that the debt ceiling of 60% for general government debt will be met by FY25, as stipulated in the Fiscal Responsibility and Budget Management (FRBM) Act.

Plans to support growth include INR100 trillion (USD1.4 trillion) of infrastructure spending in the next five years and efforts to encourage foreign-direct investment in certain sectors, including electronics. The government also intends to reduce its ownership in some non-financial public-sector entities and modify its policy of retaining at least a 51% direct holding. It will also inject a further INR700 billion into public-sector banks.

However, the extent and timing of any benefits from the budget measures to GDP growth will depend on policy details that are yet to be announced and on effective implementation. Moreover, some measures could weigh on growth over time, such as higher import duties on many products to “provide a level playing field to domestic industry”.

In its most recent Global Economic Outlook – June 2019 Fitch Ratings reduced its FY20 Indian GDP growth forecast slightly to 6.6%. Fitch Ratings still see growth rising back above 7.0% in FY21 and FY22, partly because the agency anticipates monetary and regulatory easing from the Central Bank to support some recovery in credit to the private sector. Fitch believes the proposed capital injection will allow public-sector banks to meet minimum regulatory capitalisation requirements, but may not leave much space for the banks to accelerate credit growth in FY20, considering slow non-performing loan recoveries and ongoing provisioning.

The budget targets a slight narrowing in the fiscal deficit target, to 3.3% of GDP, from an estimated 3.4% in FY19 and in the FY20 interim budget. Fitch is of the view that the fiscal targets are broadly credible, although projected revenue growth, at 13.5%, may prove optimistic as it is based on the government’s higher 7.0% real GDP growth forecast and disinvestment targets might not be met. There is also a recent history of modest slippage relative to targets, but the government plans to continue increasing the number of registered tax payers and could reduce or postpone spending if revenue underperforms.

Fitch believes off-budget spending is likely to increase due to, for instance, the additional banking-sector recapitalisation, which is equivalent to 0.3% of GDP. This should not affect the deficit, but it will raise the debt level. Weak public finances are a key constraint on India’s ‘BBB-‘/Stable sovereign rating, which we affirmed on 4 April 2019.