Finance minister Arun Jaitley on Friday indicated that the Union Budget 2016-17 could provide Rs 1.10 lakh crore in order to meet the liabilities for the 7th Pay Commission award and implementation of the One Rank One Pension (OROP) scheme — uniform pension for armed forces personnel retiring at the same rank with the same length of service.
While addressing the Consultative Committee, which is attached to the finance ministry, Jaitley said there would be higher allocation for the farm sector.
“During the financial year 2016-17, the central government has to make provision for about Rs 1.10 lakh crore in order to meet the liabilities on account of implementation of 7th Pay Commission recommendations and One Rank One Pension scheme,” Jaitley said.
The finance minister pointed out that agriculture growth in the last two years has suffered due to insufficient monsoons. However, states have been given the highest-ever funds for drought relief in 2015-16. “More incentives will be given to agriculture sector for increasing agriculture production and productivity,” he said.
Jaitley highlighted that all the major economic organisations, including the International Monetary Fund, have predicted low growth for the world economy in the coming year, and these developments have implications on India’s economy, especially the exports sector.
“The world economy is passing through an uncertain and fragile situation... The silver lining is low international commodities and oil prices, which in turn has helped in better macroeconomic situation of the country,” Jaitley said.
The 7th Pay Commission has recommended an increase in pay for about 10 million government employees and pensioners. The move will put an additional burden of Rs 1.02 lakh crore in 2016-17 on the exchequer.
Jaitley said that for the first time this year real expenditure amount was higher than budget proposal.
It was suggested by the Committee members that tax exemption limit for middle and salaried class be increased from existing Rs 2.5 lakh to Rs 4 lakh while focusing on widening the tax base. There should also be severe punishment for those evading taxes, it was proposed. There was also a suggestion to change the labour ratio in MNERGA such that it can be more productive and used for infrastructure building along with providing jobs.