Table of Contents
What is Budget?
• Estimation of revenue and expenditure over a specified future period of time
• Union Budget 2018-19 crucial because it is the first budget since the rollout of GST
• Aims at making India grow at 8% in the coming years
Budget at a Glance 2018-19 (Rs crore)
• Type of Articles:
– Overview articles
– Sectoral articles
By Hasmukh Adhia
• Focus areas of Budget 2018-19: – Rural infrastructure & employment – Health, Education & Social Protection schemes – Micro, Small & Medium Enterprises
• Besides above, it tries to set a prudential road map for fiscal consolidation – Fiscal deficit to be 3% of GDP in 2 to 3 years
By J D Agarwal
• Budget comes in the backdrop of major structural reforms like:
By J D Agarwal
• Budget comes amidst challenges like:
– Low growth rate of agriculture
– Expansion of health & education infrastructure – Generating employment
– Boost to investment & exports
– Extending electricity & drinking water – Women empowerment & social justice
– Gigantic amount of NPAs
MCQ #1
Who is Hasmukh Adhia?
A. Finance Secretary
B. Cabinet Secretary
C. Chief Election Commissioner
D. Comptroller & Auditor General of India Sector-wise Articles & Analysis
1. Agriculture 2. MSMEs 3. Employment 4. Healthcare 5. Infrastructure 6. Education 7. Elderly 8. Women 9. Ease of Doing Business 10.Aspirational Districts
1. Agriculture
• Agriculture is the foundation of rural prosperity as 70% India still resides there
• Problems: – Declining size of farms – Depletion of resources – Rising costs of inputs & labor – Lack of R&D
• Leading to: – Indebtedness – Vast disparity – Farmer suicides
By J P Mishra & Shivalika Gupta
Target: doubling farmers income by 2022. How?
1. Bringing inclusiveness
2. Remunerative prices for all
3. Development of Value chain
4. Natural Resources & Sustainability
By J P Mishra & Shivalika Gupta
1. Bringing inclusiveness
– Credit access to tenant farmers
– KCC for fishery & animal husbandry farmers
– New Funds to support fishery & animal husbandry
– Insurance via National Health Protection Scheme
By J P Mishra & Shivalika Gupta
2. Remunerative prices for all
– MSP protects the farmer against excessive fall in price during bumper production years. Problems?
• Limited to select crops and geographies
• Inadequate incentive above cost of production – Minimum Support Price is now pegged at 50% higher than the production cost to the farmer – Upgradation of rural periodic markets into multi-purpose Grameen Agricultural Markets (GrAMS) – Use of Artificial Intelligence for demand forecasting By J P Mishra & Shivalika Gupta
By J P Mishra & Shivalika Gupta
3. Development of Value chain – Promotion of Farmer Producer Companies
• Organize into a collective to increase bargaining power
• Owned and governed by shareholder farmers – Launch of Operation Greens
• Modeled on Operation Flood
• Managing prices of Potato, Onion & Tomato (POT)
• Robust Agri-logistics and processing facilities – Special attention to High Value Commodities
• Horticulture and Medicinal & Aromatic Plants (MAPs)
4. Natural Resources & Sustainability
– Farmer Producer Organizations (FPOs) to promote organic farming
– More funds for Organic Value Chain Development in North East Region => export to ASEAN + Act East – More funds for PM Krishi Sinchayi Yojana
• Har Khet ko Pani + Per Drop more Crop – Mechanisms to sell surplus solar power to grids – GOBAR-DHAN scheme for clean & safe bio energy
By J P Mishra & Shivalika Gupta
4. Natural Resources & Sustainability – Farmer Producer Organizations (FPOs) to promote
organic farming
– More funds for Organic Value Chain Development in North East Region => export to ASEAN + Act East
– More funds for PM Krishi Sinchayi Yojana
• Har Khet ko Pani + Per Drop more Crop
– Mechanisms to sell surplus solar power to grids
– GOBAR-DHAN scheme for clean & safe bio energy
By M S Swaminathan
• Promotion of Peri-urban Horticulture
• Seawater farming and below sea level farming –E.g. Kuttanad region in Kerala
• Millet Biovalley for conservation of millets –E.g. Kolli Hills has rich germplasm of millets
• Rice Biopark to showcase biomass utilization
• Climate Risk Centre in every Block for R&D
• Farm Schools for Farmer to farmer learning
MCQ #2
Government has declared 2018 as National Year of which commodity? A. Rice B. Millet C. Oilseeds D. Poultry
2. MSMEs
By Anil Bharadwaj
• Importance of MSMEs: – India needs to create ~1 million jobs per month – Not possible without labor intensive industry – To raise manufacturing GDP from 10-12% to 25% – Balanced regional development
• In his Budget speech, the FM said: “MSME will be the engine for consolidation of Indian Economy”
By Anil Bharadwaj
• Extending fixed term employment from Textiles to all sectors – Employers can hire people for specific projects
• Increasing custom duty to encourage domestic production in > 40 labor intensive products – If RCEP goes through, India will have to reduce it to zero in future
• Trade Electronic Receivable Discounting System (TReDS) – Digital platform where MSMEs can access capital by auctioning trade receivables
• Corporate Tax reduced to 25% for companies with turnover < 250 Cr (earlier 50 Cr) – But 93% of MSMEs are not companies. They are partnerships or proprietorships.
• Companies with lower ratings can also access Bond market
MCQ #3
Who is not part of the GOM to decide whether India should join RCEP or not? A. Suresh Prabhu B. Piyush Goyal C. Nirmala Sitharaman D. Smriti Irani
3. Employment
By Ranjeet Mehta
Importance of Job Creation:
• Creating Jobs is at the core of policy-making
• India home to 18 million unemployed people
• ~30% Youth is not in education, employment or training – alarming situation!
• India needs to create jobs at the rate of: “A Million a Month”
By Ranjeet Mehta Actual Jobs created in 2017-18
• Centre for Monitoring Indian Economy = 1.43 million
• NITI Aayog = 7 million • Surjit Bhalla = 15 million
By Ranjeet Mehta
• Extension of fixed term employment from textiles to all sectors
• Bringing down Corporate tax to 25% for companies with annual turnover < 250 Cr
• Govt. will make 12% employer’s contribution to EPF for new employees in all sectors for 3 years
• Increasing women’s workforce participation by reducing women employee’s EPF contribution from 12% to 8%
• Model aspirational skill centre in every district under PM Kaushal Kendra Programme
• Improving environment for VC Funds and alternate investment funds for Startups
MCQ #4
PM Rojgar Protsahan Yojana is under which Ministry? A. Ministry of Skill Development B. Ministry of Commerce & Industry C. Ministry of Labor & Employment D. Ministry of Micro, Small & Medium Enterprises
4. Healthcare
By K Srinath Reddy
• Health has remained at the margins except: – Launch of NRHM (2005) – Launch of RSBY (2008) – Launch of NHM = NRHM + NUHM (2013)
• At 1.4%, govt. spending remains much below the stated target of 2.5% of GDP
• 70% expenses are out of pocket expenditure, due to which about 7% population is pushed below poverty threshold every year
By K Srinath Reddy
• What’s different in 2018-19? – Ayushman Bharat for New India 2022
• Health & Wellness Centres
• National Health Protection Scheme – New Medical colleges & Hospitals – Monthly stipend (Rs. 500) to TB patients – Scaling up sanitation under Swachh Bharat – Ujjwala scheme to provide cooking gas – Incentivizing in-situ disposal of crop waste By K Srinath Reddy
• Health & Wellness Centres (HWCs) – Promote Comprehensive Primary Health Care – Transformation of 1.5 Lakh sub-centres into HWCs
• 1 sub-centre serves ~5k population in ~4 villages – Provide free essential drugs & diagnostic services – Use of IT to generate real time data insights – Use of telemedicine & mobile phone technologies
• Challenges – Lack of funds and human resources (usual problems?) – Urban areas ignored as of now
By K Srinath Reddy
•National Health Protection Scheme –Annual insurance cover of Rs. 5 Lakh for 10 Cr poor families –For secondary & tertiary care hospitalization
•Challenges –
In the absence of good primary health care, NHPS will drain the health budget and further reduce funds for primary health care –Only 2000 Cr has been allotted but requirement will swell at least 5 to 6 fold –States are expected to contribute 40% funds but have their own health insurance programs (cooperative-competitive federalism??) –Urban areas ignored as of now –Evolving standard clinical management guidelines –Fraud detection & grievance redressal systems to be put in place
MCQ #5
Who headed the High-Level Expert Group (HLEG) on Universal Health Coverage (UHC)?
A. K Srinath Reddy B. Dr. Devi Shetty C. C Rangarajan D. Raghuram Rajan
5. Infrastructure
By G Raghuram
About 6 trillion allocated for infrastructure:
• Indian Railways – Track doubling and gauge conversion – Redevelopment of railway stations – Introduction of modern train sets – Special focus on suburban Mumbai & Bangalore
• Bharatmala Project
• Sagarmala Project
• Nextgen Airports For Bharat (NABH) Nirman
• Smart Cities + AMRUT
• Digital India Programme
• Adarsh Monuments + HRIDAY By G Raghuram
• FM in his budget speech said, “India needs Rs. 50 trillion in infrastructure”
• But do we have ability to spend it effectively? – Insufficient bandwidth to put out well written project reports – Lack of legal and judicial bandwidth to expedite cases – Non performing infra assets that put limits on debt financing
MCQ #6
Under Adopt a heritage scheme, Red Fort has been adopted by which group?
A. Reliance Industries B. Dalmia Bharat Group C. Aditya Birla Group D. Tata Trusts
6. Education
By Kiran Bhatty
• Strategic moves: – Moving from Blackboard to Digital Board in classes – Seeing education as primary to secondary continuum
• SSA + RMSA + Teacher education merger on cards?
• Other focus areas: – National Achievement Survey to assess quality – District-wise strategy for improving quality – Ekalavya Model Residential Schools in Tribal areas – Revitalising Infrastructure and Systems in Education – Prime Minister’s Research Fellows Scheme – Investing 1 Lakh Crore in innovation and R&D a Only 9% schools have both electricity and functional computer! By Kiran Bhatty
MCQ #7
Government is planning to replace UGC by which of the following?
A. Higher Education Commission of India
B. National Education Authority of India
C. Union Education Commission of India
D. Education & Skill Development Authority of India
7. Elderly
By Sumati Kulkarni
• At 9% of India’s population – Elderly – is India’s rapidly increasing vulnerable group
• Major announcements: – Tax benefits for taxpayer senior citizens – PM Vaya Vandana Yojana
• Pension scheme with 8% assured return for 10 years
• What’s new?
Investment limit doubled from 7.5 to 15 L – Elderly will benefit from Ayushman Bharat 8. Women
By Shahin Razi
• Ujjwala Scheme to target 80 million BPL women
• Funds for Saubhagya Yojana for providing electricity
• Funds for women safety to Nirbhaya Fund
• Loans to Women SHGs
• New Gold Policy to earn interest on Gold deposit
• Contribution to EPF for women cut from 12% to 8%
• Six months maternity leave with full salary • 20 million new toilets under SBM
• Funds for Beti Bachao Beti Padhao
• Continuation of Sukanya Samridhi Yojana
9. Ease of Doing Business
By Danish Hashim & Varsha Kumari
• Simplifying loan sanctions to MSMEs by TREDS
• Relief in Tax by reducing Corporate tax
• Relief in NPAs treatment of MSMEs – Delay of 180 days is allowed instead of 90 days
• Unique Aadhar-like ID to all companies
• National Logistics Portal for relevant stakeholders
• Fixed term employment for all sectors
• Technology-based governance e.g. Judicial grid
• Electronic toll payment by FASTags
MCQ #8
What is FASTags?
A. Electronic toll collection system
B. High speed corridors for ambulances
C. Broadening of national waterways
D. Controlling access in Expressways
10. Aspirational Districts By Amitabh Kant
• Aim: expedite development in 117 districts across 28 states
• 3 core principles => – Convergence (of Central & State Schemes) – Collaboration (citizens + Central + State Govt.) – Competition among districts
• 5 main themes =>
By Amitabh Kant
• But what’s so special? – Evidence based governance – Real-time monitoring & ranking – Cooperative-Competitive federalism – High political and administrative will to do – Make development a mass movement in districts
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