Budget 2017: What finance minister Arun Jaitley said versus what the numbers show
Do finance minister Arun Jaitley’s budget pronouncements match up to what the numbers say?union budget Updated: Feb 02, 2017 01:46 IST
The budget is about policy, and the budget speech has to strike a balance with politics. How well do they match?
The allocation for MGNREGA is up 1%
What Jaitley said: “Honourable Members would be happy to note that the budget provision of Rs. 38,500 crores under MGNREGA in 2016-17 has been increased to Rs. 48,000 crores in 2017-18. This is the highest ever allocation for MGNREGA.”
What the numbers say: Yes, this is the highest ever allocation for the MGNREGA. But it didn’t go up by much. The demand for unskilled manual work surpassed expectations, leading to a revised estimate: MGNREGA 2016-17 received Rs 47,499 crores, up from the Rs 38,000 crore budgeted last year. So the allocation was hiked by Rs 501 crore — just about 1%.
Jaitley also said that in the last two years, the money spent on MGNREGA has been higher than the amount allocated, while the opposite was true under the UPA government. He’s right.
Allocation to the University Grants Commission (UGC) is still low
What he said: “In higher education, we will undertake reforms in the UGC. Good quality institutions would be enabled to have greater administrative and academic autonomy. Colleges will be identified based on accreditation and ranking, and given autonomous status. A revised framework will be put in place for outcome based accreditation and credit based programmes.”
What the numbers say: While the finance minister talked about reforming the UGC, which funds and regulates higher education, that is not reflected in the budgetary allocations. In the 2015-16 budget, the UGC’s funds were cut by 53% — from Rs 8,906 crore to Rs 4,185 crore. This year, Rs 4,691 crore has been allocated, a 7% increase but still much lower than the 2014-15 figure.
Pradhan Mantri Mudra Yojana targets not met
What he said:“The Pradhan Mantri Mudra Yojana has contributed significantly to funding the unfunded and the underfunded. Last year, the target of Rs. 1.22 lakh crores was exceeded. For 2017-18, I propose to double the lending target of 2015-16 and set it at Rs. 2.44 lakh crores.”
What the numbers say: The government did exceed the target in 2015-16: Rs 1.37 lakh crore was sanctioned. This fiscal year, Rs 1,80,000 crore was the target. But, as of January 27, official data show that the disbursed amount is Rs 97,574 crore, around Rs 80,000 crore short of the target, with just two months to go in the financial year.
Allocation to Pradhan Mantri Gram Sadak Yojana (PMGSY) stays intact
What he said:“We have committed to complete the current target under PMGSY by 2019. I have provided a sum of Rs. 19,000 crores in 2017-18 for this scheme. Together with the contribution of States, an amount of Rs. 27,000 crores will be spent on PMGSY in 2017-18.”
What the numbers say: There was no change in the allocation for PMGSY by the government. The same amount, Rs. 19,000 crore, was allocated last year. In 2016-17, as of January 25, projects worth Rs. 23,201 crore were approved by the Ministry of Rural Development—122% higher than the budgeted amount—a report by the Accountability Initiative found. This scheme got its highest ever allocation — Rs. 19,886 crore — in 2010-11.
Direct Benefit Transfers have slowed
What he said:“We have made a strong beginning with regard to Direct Benefit Transfer (DBT) to LPG and kerosene consumers. Chandigarh and eight districts of Haryana have become kerosene free. 84 Government schemes have also boarded on the DBT platform.”
What the numbers say: These 84 schemes account for 16% of the 536 targeted schemes. Since its inception, Rs. 1.57 lakh crore has been transferred through DBT. In 2016-17, the pace of these transfers has slowed, a report by Accountability Initiative says. As of December 2016, only 45% of the government’s allocations for LPG subsidies; 58% of those for MGNREGS; and 62% of those for NSAP had been transferred through DBT.
Growth in tax collection is up by was highest in 2010-11
What he said:“The net tax revenue of 2013-14 was Rs. 11.38 lakh crores. This grew by 9.4% in 2014-15 and 17% in 2015-16. As per the RE of 2016-17, we will end the year with a high growth rate of 17% for the second year in a row.”
What the numbers say: A 17% increase in tax revenue is not unprecedented. It was much higher in 2010-11: 27%. That was because subsidies given to corporates in the wake of financial crisis of 2008-09 were rolled back in 2010-11. Even in 2012-13, the growth rate was comparable to the previous two years. This year, the growth rate of tax revenues is expected to slump by five percentage points to around 12 per cent.
Income tax collections back to earlier growth trajectory
What he said: “Because of the serious efforts made by the Government, the rate of growth of advance tax in personal income tax in the first three quarters of the current financial is 34.8%.”
What the numbers say: The growth rate of income tax receipts had been increasing since 2010-11, before falling in the year 2014-15 and 2015-16. The rate has bounced back in the past year.
Gurman Bhatia and Harry Stevens contributed to this story
First Published: Feb 01, 2017 20:46 IST