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AUGUST 2019 A DEVELOPMENT MONTHLY `30
Union Budget 2019-20

Budget Overview
Subhash Chandra Garg
Tax Proposals: Benefits to Common Man

Ajay Bhushan Pandey
Moving Towards Better, Equitable and Affordable Health Services

Indu Bhushan
‘Blue Sky Thinking’ Blueprint for India@$5trillion

Krishnamurthy V Subramanian, Surbhi Jain
FOCUS
Fostering Youth to Take on Opportunities of the Future
Amitabh Kant
SPOTLIGHT
Water With a Capital ‘W’: The Way Forward
Parameswaran Iyer
SPECIAL ARTICLE
Transforming Urban India
Durga Shanker Mishra
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SPECIAL ISSUE
ISSN-0971-8400
Budget Overview
Ajay Bhushan Pandey
Indu Bhushan
FOCUS
Amitabh Kant
SPOTLIGHT
Parameswaran Iyer
SPECIAL ARTICLE
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YOJANA
Website: www.yojana.gov.in
August 2019 Volume-63
CHIEF EDITOR Since 1956 A DEVELOPMENT MONTHLY

Shamima Siddiqui Let noble thoughts come to us from all sides
Senior Editors Rig Veda
Shyamala Mani Iyer
Manogyan R. Pal In This Issue
EditorS
Anand Saurabh
Ankita yadav Budget Overview spearheading Women
sumita mukherjee Subhash Chandra Garg...........................7 Empowerment
Joint Director (Production)
Shahin Razi, Naushin Razi.....................45
Vinod Kumar Meena Tax Proposals:
Transport Infrastructure
COVER DESIGN Benefits To Common Man
and Connectivity
Gajanan Pralhadrao Dhope Ajay Bhushan Pandey...........................13
G Raghuram..........................................49
Our Representatives
Ahmedabad: Janhavi Patel, Bengaluru: B.K. Kiranmai focus Budget 2019-20: Some Reflections
Bhubaneshwar: Girish Chandra Dash, Chennai: A K Dubey.............................................53
Sanjay Ghosh, Hyderabad: Vijayakumar Vedagiri,
Fostering Youth to take on
Jalandhar: Gagandeep Kaur Devgan, Kolkata: Opportunities of the Future A Railway Budget Focussed on
Khurshid Malik, Mumbai: Umesh Sadashivarao Amitabh Kant........................................17 Reforms
Ujgare: Thiruvananthapuram: Roy Chacko Shine Jacob...........................................57
spotlight
Chief Editor’s Office: Room No. 660, Soochna Building a New India through
Bhawan, CGO Complex, Lodhi Road New Delhi Water with a capital ‘W’: Education Reforms
110 003 Phone: 24362971 Alok Kumar, Sarah Iype,
The way forward
Yojana (English): Room No. 647, Soochna Bhawan, Urvashi Prasad......................................61
CGO Complex, Lodhi Road, New Delhi - 110 003. Parameswaran Iyer...............................21
E-mail (Editorial): yojanace@gmail.com
special article Towards Farmers’ Welfare
YOJANA seeks to provide a vibrant platform for Jagdeep Saxena....................................65
discussion on problems of social and economic Transforming Urban India
development of the country through in-depth Welfare and Empowerment
analysis of these issues in the wider context of
Durga Shanker Mishra..........................25 of Marginalised through
government policies. Although published by Budgetary Interventions
the Ministry of Information and Broadcasting, Moving Towards Better,
YOJANA is not restricted to expressing the official Equitable and Affordable Health Muniraju S B, Chaitra Devoor. ............69
point of view.
Services Power for All and Energy
DISCLAIMER: The views expressed in various Indu Bhushan.......................................31 Security
articles are those of the authors' and they do not
Manoj Kumar Upadhyay.......................72
necessarily reflect the views of the Government ‘blue sky thinking’ blueprint for
or the organisation they work for. l Maps/flags
used in the articles are only indicative. They don't India@$5trillion Comprehensive Reform for
reflect the political map or legal representation Krishnamurthy V Subramanian Banking Sector
of the flag of India/any other country. l The Surbhi Jain............................................36 Shishir Sinha.........................................76
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4 YOJANA August 2019

YOJANA
A Budget For All
U nion Budget 2019-20 is a Budget for New India which is based on an

inclusive approach for various sections of the society. The Budget aims to
boost India’s development in the 21st century on the basis of an investment-driven
growth model that would propel our country towards the dream of becoming a
5 trillion dollar economy.
Some of the key areas driving the larger spirit of the Budget have been
to simplify tax procedures, incentivise performance and make the best use of
technology to set the pace for an all-inclusive development. With its focus on
“Gaon, Garib, aur Kisan”, the Union Budget 2019-20 is a Budget full of hope
that aspires to provide gas connection, electricity, running water and clean
toilets to every rural household through various initiatives such as Swachh
Bharat Abhiyan, Har Ghar Jal etc. The new Jal Shakti Mantralaya for better
management of water resources and water supply in a holistic manner is a boost
in this direction. Bringing about a paradigm shift in how healthcare is looked
at in India, Ayushman Bharat represents a comprehensive, holistic approach to
achieve a healthy society by combining preventive, promotive, curative and
rehabilitative aspects of care.
With emphasis on minimum government and maximum governance, the Union Budget has focussed on ease of
living for the common man with developmental initiatives in various areas viz. physical connectivity, rural India,
railways, unified digital payments, inland waterways and so on. The creation of payment platform for MSMEs to
eliminate delays in Government payments would help the MSME sector to develop further.
Raising the slogan, “Nari Tu Narayani”, the Budget focusses on enhancing the role and contribution of women in the
workforce as well as economy through multiple initiatives such as Rs 1 lakh loan under MUDRA scheme for women
entrepreneurs and Rs 5,000 overdraft for every verified SHG member having a Jan Dhan account. It not only speaks
of the empowerment that is sure to come in the near future but also places it as a women-empowering Budget.
New-age technologies including electric vehicles, solar PV, storage batteries and charging infrastructure will not
only create jobs but also go a long way in making the energy sector sustainable and ready for the future. This is a
green Budget in which special emphasis has been laid on the environment.
Initiatives like the Gaganyaan, Chandrayaan and the introduction of the New Space India Limited (NSIL), a
new commercial arm for research and development carried out by ISRO, speak of India’s aspiration to be a major
space power.
Globally valued skill-sets including Artificial Intelligence (AI), Internet of Things, Virtual Reality and Robotics and
Big Data have been identified as focus areas for enabling the youth of the country to take up jobs overseas. Making
the education system future ready and strengthening the Study in India programme have been highlighted as well.
Overall, the Budget speaks inter-alia about the aspirations of the rural and the urban population, the needs of
farmers and students, and the drive for empowerment of youth and women.
Steering the economy towards a New India, the Union Budget 2019-20 is truly a Budget For All.
YOJANA August 2019 5

YE-1190/2019

POLICY PERSPECTIVEs
growth
Budget Overview
fter the constitution
o f 1 7 th L o k S a b h a
A and formation of new

Government, the Regular
Budget for 2019-20 was
presented to Parliament
on 5th July, 2019. The Regular Budget
for 2019-20 is a compendium of 13
different documents, including the
Finance Bill, 2019; Annual Financial
Statement and Demands for Grants
for 2019-20, covering the entire fiscal
viz. 2019-20. It may be reminded
that the Interim Budget 2019-20,
was presented on 1st February 2019.
Being a Vote-on-Account, approval
from Parliament for undertaking
expenditure till 31 st July, 2019 is
available with the Government.
Macroeconomic Outlook
The economy has achieved high
growth that averaged 7.5 per cent in
the last 5 years (2014-15 to 2018-
19) amidst significant improvements
in macroeconomic stability. As per
the provisional estimates of national
income, the growth of real GDP in 2018-
19 was 6.8 per cent, 40 basis point lower
than the real growth of 2017-18. The per cent and 7.5 per cent, respectively The macro-parameters as reflected
growth in Gross Value Added (GVA) in 2018-19. This moderation in GDP in the GDP numbers are given in the
at constant basic prices in 2018-19 growth momentum is mainly attributed table-1.
was 6.6 per cent. At the sectoral level, to the lower growth in ‘agriculture &
agriculture, industry and services sectors allied’, and in services (except financial, The Regular Budget 2019-20 was
grew at the rate of 2.9 per cent, 6.9 real estate and professional services). presented with this background. Apart
Table 1: Growth of GDP (per cent)

Indicator 2016-17 2017-18 2018-19 2018-19
Q1 Q2 Q3 Q4
Real GDP growth 8.2 7.2 6.8 8.0 7.0 6.6 5.8
Real Gross Value Added growth (of which) 7.9 6.9 6.6 7.7 6.9 6.3 5.7
Agriculture & allied 6.3 5.0 2.9 5.1 4.9 2.8 -0.1
Industry 7.7 5.9 6.9 9.8 6.7 7.0 4.2
Services 8.4 8.1 7.5 7.1 7.3 7.2 8.4
The author is Finance Secretary and Secretary, Department of Economic Affairs, Ministry of Finance, Government of India.

from the growth aggregates, the other in 2016-17 to US$ 162.1 billion in investment rate since 2011-12, which
Macro-facts worth mentioning are 2017-18. A significant part of increase seems to have bottomed out with
outlined below: in higher trade deficit in 2017-18 could some signs of recovery since 2017-18.
be attributed to higher oil import bill Investment rate (share of gross capital
Fact 1: Inflation remains under that increased on account of higher formation to GDP) improved to 32.3
control prices of crude oil in the international per cent in 2017-18 (the latest year for
market. Despite the slowdown in global which data is available) from 30.9 per
l From close to double digit inflation
economy, merchandise trade deficit cent in 2016-17. Fixed investment rate
(9.9 per cent) in the years 2012-13
widened only by US$ 21.9 billion in (share of gross fixed capital formation
and 2013-14, the consumer price to GDP) improved from 28.6 per cent
inflation in the last five years 2018-19, as compared to US$ 53.6
billion in 2017-18. in 2016-17 to 29.3 per cent in 2018-19.
ending 2018-19 averaged less However, there has been a significant
than half of that. Current account deficit: Current decline in both fixed investment rate
l Headline inflation based on account deficit increased to 2.1 per and growth in last quarter of 2018-19.
Consumer Price Index (Combined) cent of GDP in 2018-19 from 1.8 per
cent in 2017-18, mainly on account of A snapshot of the investment
for 2018-19 averaged 3.4 per cent,
widening of trade deficit. scenario in the country is presented
as compared to 3.6 per cent in
in Table 2.
2017-18. In April-May 2019, CPI
Robust foreign direct investment:
inflation was 3.0 per cent. The confidence in the Indian
The gross FDI flows to India in
l WPI inflation stood at 4.3 per economy has increased on account
2018-19 reached a high of US$ 64.3
cent in 2018-19, as compared to of policy measures taken up by the
billion, as compared to US$ 61 billion
3.0 per cent in 2017-18. In April- Government, as can be seen from the
in 2017-18 and US$ 60.2 billion in
May 2019, WPI inflation was two indicators listed below:
2016-17, indicating improved global
2.8 per cent. confidence on the Indian economy. In l Moody’s rating agency upgraded
April 2019, the gross FDI inflow was India’s local and foreign currency
The figure 1 shows the inflation
US$ 5.2 billion, as compared to US$ issuer rating to Baa2 with a
trend in the economy, since 2014-15.
Services 8.4 8.1 5.5 billion
7.5 in April
7.12018.
7.3 7.2 8.4 stable outlook from Baa3 on
Fact 2: Modest performance of the expectation that continued
The Regular Budget 2019-20 was presented withForeign exchange
the above reserves
background. Apartstood
from at
external sector indicators despite US$ 412.9 billion at the end of March progress in India’s economic
the above growth aggregates, the other Macro-facts worth mentioning are outlined reforms will enhance India’s
global slowdown 2019, as compared to US$ 424.5
below: growth potential over time.
India’s Merchandise trade: During billion at the end of March 2018. As on
ͳǣǣ
2016-17, exports grew by 5.2 per cent 28thper
x From close to double digit inflation (9.9
June 2019, the foreign exchange
cent) The Government has given a
reserves wereinUS$
the years
427.72012-13
billion.and
while imports increased by 0.9 per cent,
2013-14, the consumer price inflation in the last five years ending 2018-19 massive push to all forms of
helping in narrowing the trade deficit. Fact 3: Investment is a concern but
averaged less than half of that.
However, the merchandise exports and shown signs of a turnaround in last
physical connectivity through
x
importsHeadline
grew byinflation basedand
10 per cent on Consumer
21.1 two Price Index (Combined) for 2018-19
years
Pradhan Mantri Gram Sadak
per centaveraged 3.4 per in
respectively cent, as compared
dollar terms to 3.6 per cent in 2017-18. In April-May Yojana, industrial corridors,
during 2019, CPI inflation
2017-18, resultingwas
in 3.0 per cent.
widening There has been a secular decline dedicated freight corridors,
of trade deficit
x WPI fromstood
inflation US$ at108.5 billion
4.3 per in both
cent in 2018-19, asinvestment
compared torate and
3.0 per fixed
cent in Bhartamala and Sagarmala
2017-18. In April-May 2019, WPI inflation was 2.8 per cent.
Figure 1: Performance of Inflation projects, Jal Marg Vikas
The figure below shows the inflation trend in the economy, since 2014-15.
and UDAN Schemes.
Inflation trend since 2014-15
7 l According to World Bank’s
6 Ease of Doing Business 2019
5 Report, India’s ranking improved
4 by 23 positions to 77 th rank in
3
2018.
2
Macro-Outlook
1
0 Based on the above macro-

2014-15 2015-16 2016-17 2017-18 2018-19 parameters the following shall be
Headline (All Groups) Food (CFPI) Core (Non-food non-fuel)
macro-outlook for the remaining part
of FY 2019-20:
Source: CSO
Figure 1: Performance of Inflation, Source: CSO
ʹǣ
India’s Merchandise trade: During 2016-17, exports grew by 5.2 per cent while
imports increased by 0.9 per cent, helping in narrowing the trade deficit. However,
the merchandise exports and imports grew by 10 per cent and 21.1 per cent
Table 2: Rate of capital formation (per cent)
2014-15 2015-16 2016-17 2017-18 2018-19
Gross Capital Formation 33.5 32.1 30.9 32.3 NA
Public sector 7.1 7.6 7.1 7.2 NA
Private corporates 13.4 13.2 11.6 11.6 NA
Household sector 12.1 9.6 10.5 10.3 NA
Gross Fixed Capital Formation 30.1 28.7 28.2 28.6 29.3
NA: Not Available
The economy grew by 6.8 per Goods and Services Tax from 1st July, is estimated at Rs. 8,76,209 crore in
cent in 2018-19. This growth rate was 2017. The highlights of the Budget BE 2019-20.
achieved despite higher crude oil prices Estimates for 2019-20 are elaborated
and depreciation of rupee vis-à-vis in the following paragraphs. Revenue Expenditure
dollar. Now with the moderation in oil
With the continued emphasis on The major components of the
prices and stability in the exchange rate,
empowering the States, the total revenue expenditure of the Government
the prospects of the Indian economy
resources transferred to States, include Interest payments, Subsidies,
are looking bright. All international
including the devolution of State’s Salaries, Pensions, Defence revenue
agencies including IMF and World Bank
share in taxes and the releases under expenditures, expenditure on
project firming up of growth in India
Centrally Sponsored Schemes in BE Central Police Organizations and the
in coming years. IMF has projected a
2019-20 is estimated at Rs. 13,29,428 revenue transfers made to the State/
gradual improvement in India’s growth
crore. This entails an increase of UT Governments in the form of
as a result of implementation of several
Rs. 82,845 crore over revised estimate Finance Commission grants, Centrally
structural reform measures.
2018-19 and Rs. 2,44,298 crore more Sponsored Schemes and Other
Given the macroeconomic situation than the actuals for 2017-18. Transfers. In 2019-20, outgo towards
and the structural reforms being
The Budget 2019-20 reflects the interest payments is expected to be Rs.
undertaken by the Government, the 6,60,471 crore which is 33.7 per cent
Government’s firm commitment
economy is projected to grow at 7 per of revenue receipts. In BE 2019-20,
to substantially boost investment
cent in 2019-20. Outlook of Indian in Agriculture and Social Sector, expenditure on account of subsidies is
economy appears bright with prospects particularly in Education and Health. expected to be Rs. 3,01,694 crore.
of pickup in growth in 2019-20 on back Keeping the Fiscal Deficit at 3.3 per
of pickup in private investment and cent of GDP (as against 3.4 per cent The Defence Services revenue
robust consumption growth. envisaged in interim Budget) in BE expenditure constitute mainly
2019-20, Government is committed to expenditure on salaries, other
In 2019, when the world economy
and EMDEs are projected to slow continue the path of fiscal consolidation establishment-related items including
down by 0.3 and 0.1 percentage points, without compromising on the Stores, works-related maintenance
respectively, growth of Indian economy requirements of public expenditure expenditures, transport and other
is forecast to increase. placed by the various sectors. This miscellaneous expenditure. BE 2019-
has been achieved through prudent 20 for Defence Service revenue
Budget 2019-20 rationalisation of expenditure and expenditure is estimated at Rs. 2,01,902
mobilisation of additional resources. crore. The Finance Commission grants
Fiscal deficit target for 2019-20 is are given to the State Governments
3.3 per cent of GDP in BE 2019-20 Expenditure under the statutory provisions under
while Revenue Deficit has been pegged
In Budget Estimates (BE) 2019- Article 275(1) of the Constitution.
at 2.3 per cent of GDP.
20, the total expenditure is placed at The current transfer to States under FC
l The Central Government Debt as a Rs.27,86,349 crore showing an grants are based on recommendations
percentage of GDP for BE 2019-20 increase of Rs. 3,44,136 crore over of 14th Finance Commission in relation
is expected to be 48 per cent. BE 2018-19 and an increase of to revenue deficit grants, Grants in
l In BE 2019-20, the Gross Tax Rs. 3,29,114 crore over RE 2018- aid for State disaster response funds
Revenue as a percentage of GDP 19. The total expenditure includes a and Grants in aid for the rural and
is expected to be 11.7 per cent. provision of Rs. 12,02,404 crore under urban local bodies. Budgeted estimate
Schemes. in 2019-20 under this component of
Budget Overview revenue expenditure is Rs. 1,20,466
Revenue Expenditure and Capital
Budget for 2019-20 is the Expenditure are Rs. 24,47,780 crore crore. The recommendations of 14th
second budget (excluding interim Budget and Rs. 3,38,569 crore, respectively. Finance Commission are in force till
for 2019-20) after implementation of Capital Expenditure (including IEBR) 2019-20.

Revenue expenditure under in BE 2019-20.The gross tax receipts Investment Promotion Measures
Pension has three main components, are budgeted at Rs. 24,61,195 crore in
i.e., civil pensions which caters BE 2019-20 which marks an increase Apart from domestic savings it
to pension expenditure to all of Rs. 2,13,020 crore (9.48 per cent) is anticipated that the growth-aiding
Ministries/Departments of the Union over RE 2018-19. Centre’s net tax effects and the increased incomes
Government. barring few exceptions, revenue (after transfer of State’s share as a result will help in buoying up
defence pensions and pensions under and transfer to National Disaster savings in the economy. Some of the
Department of Telecommunications. Response Fund) is estimated to be important measures for the promotion
In BE 2019-20, pension expenditure Rs. 16,49,582 crore with an increase of investment measures are listed
is budgeted to be Rs. 1,74,300 crore. of Rs. 1,65,176 crore (11.13 per cent) below:
Central Sector Scheme Expenditure is over RE 2018-19.
Rs. 8,70,794 crore, with 18.2 per cent Measures for Attracting Foreign
increase over RE 2018-19. Centrally Direct Taxes, comprising Income Investment
Sponsored Scheme Expenditure is tax and Corporation Tax, are levied
l Further liberalisation of Foreign
Rs. 3,31,610 crore, with 8.8 per cent and collected from individuals,
Direct Investment policy. Proposed
increase over RE 2018-19. companies. Direct taxes are expected
for 100 per cent Foreign Direct
to reach Rs. 13,35,000 crore in BE
Capital Expenditure Investment (FDI) will be permitted
2019-20. Indirect Taxes, including
for insurance intermediaries.
Customs, Central Excise and GST,
Capital Expenditure in BE 2019-20
are levied and collected from goods l Local sourcing norms will be eased
is Rs. 3,38,569 crore. This is through
and services. Indirect taxes are for FDI in Single Brand Retail
Consolidated Fund of India. Capital
budgeted at Rs. 11,22,015 crore in sector.
expenditure is incurred mainly in the
BE 2019-20.
following Ministries: l The budget proposed to increase the
Non-tax revenue comprises, mainly, statutory limit for FPI investment
l Defence - Rs. 1,03,394 crore
dividend receipts, interest receipts, in a company from 24 per cent to
l Railways - Rs. 65,837 crore licence fees, user charges, external sectoral foreign investment limit
l Road Transport & Highways grants, aid materials, etc. Disinvestment with option given to the concerned
- Rs. 72,059 crore receipts are in the nature of non-debt corporates to limit it to a lower
l Housing and Urban Affairs - capital receipts and are through sale threshold.
of Government stake in CPSUs. Other
Rs. 19,544 crore
capital receipts are mainly recovery of Measures for Attracting Domestic
l Department of Economic Affairs - loans lent earlier. The Non-tax revenue Investment
Rs. 11,584 crore receipts are estimated at Rs. 3,13,179
l Increasing the annual turnover
l Police - Rs. 10,790 crore crore in BE 2019-20.
limit from Rs. 250 crore to Rs. 400
Internal and Extra Budgetary Non-Debt capital receipts (NDCR) crore for a lower corporate tax rate
Resources of CPSUs are estimated are expected to be Rs. 1,19,828 crore of 25 per cent.
at Rs. 5,37,639 crore in BE 2019-20. in BE 2019-20. The revenues expected
l Additional income tax deduction
Capital Expenditure (including IEBR) from disinvestment are budgeted at
of Rs. 1.5 lakh on the interest paid
is estimated at Rs. 8,76,209 crore in BE a realistic Rs. 1,05,000 crore in BE
on loans taken to purchase electric
2019-20 as against Rs. 9,29,238 crore 2019-20.
vehicles and moving the GST
in RE 2018-19 (including Rs. 97,000
Borrowings council for reduction of GST rate
crore provided to Food Corporation on electric vehicles from 12 per
of India from NSSF). Excluding In BE 2019-20, gross and net cent to 5 per cent.
loan of Rs. 97,000 crore, the capital market borrowing by the Government
expenditure (with IEBR) has gone up of India (GoI) through dated securities, l The budget provides a push to
from Rs. 8,32,238 crore in RE 2018-19 excluding buyback/switches are infrastructure development with
to Rs. 8,76,209 crore in BE 2019-20, budgeted at Rs.7,10,000 crore and the intention to invest Rs. 100 lakh
with an increase of 5.3 per cent. Rs. 4,23,122 crore, respectively. crore in infrastructure over the next
five years and by restructuring of
Revenue and Capital Receipts Budget 2019-20 Highlights National Highway Programme.
Total revenue receipts comprise We examine certain issues that l Public-Private Partnership model
of tax revenue and non-tax revenue have been the highlights of the Budget will be used to enhance investment
receipts. Total revenue receipts are discourse below. Three main issues are in Railway Infrastructure. It will
expected to be Rs. 19,62,761 crore highlighted: unleash faster development and

completion of tracks, rolling stock l Suitable policy interventions will between 2018-2030. Use of
manufacturing and delivery of be adopted to create a congenial Public-Private Partnership has
passenger freight services. atmosphere for the development of been proposed to unleash faster
Maintenance, Repair and Overhaul development and completion of
l Scheme of Fund for Upgradation (MRO) industry by leveraging tracks, rolling stock manufacturing
and Regeneration of Traditional India’s engineering advantage. and delivery of passenger freight
Industries (SFURTI) has been
l About 210 km metro lines have services.
started to facilitate cluster-based
development to make the tradi- been operationalised in 2019. With l The model of ‘One Nation, One
tional industries more produc- this, 657 km of Metro Rail network Grid’ that has ensured power
tive, profitable and capable for has become operational across the availability to States at affordable
generating sustained employment country. rates is proposed to be used for
opportunities. l India’s first indigenously developed developing gas grids, water grids,
l Other growth promoting measures payment ecosystem for transport, i-ways, and regional airports.
includes reductions of customs based on National Common
US$ 5 Trillion
duty on certain raw materials and Mobility Card (NCMC) standards
capital goods to further promote has been launched in 2019 which The Budget envisages that the
domestic manufacturing. will enable people to pay multiple Indian economy will grow to a US$
kinds of transport charges, including 5 trillion economy in a few years’ time.
l Allowing one woman in every metro services and toll tax, across The economic fact of a US$ 5 trillion
SHG for a loan up to Rs. 1 lakh the country. This inter-operable number requires bold policy actions
under the MUDRA Scheme. transport card runs on RuPay card to be taken to ensure realisation. The
l The Government is simplifying the and would allow the holders to main challenges to meet the above
GST processes. A simplified single pay for their bus travel, toll taxes, target includes:
monthly return is being rolled out. parking charges, retail shopping
Taxpayer having annual turnover and even withdraw money. l INR depreciates moderately in
of less than Rs. 5 crore shall file l Phase-II of FAME Scheme, with an
relation to US dollar;
quarterly return. Free accounting outlay of Rs. 10,000 crore for a period l Inflation stays within the present
software for return preparation of 3 years, has commenced with the level;
has been made available to small main objective of encouraging
businesses. l Annual real GDP growth rate
faster adoption of Electric vehicles accelerates to higher levels;
l Proposed to provide Rs. 70,000 by way of offering upfront incentive
crore of capital to boost credit of on purchase of Electric vehicles and l Overall productivity in the
Public Sector Banks for a strong also by establishing the necessary economy increases;
impetus to the economy. charging infrastructure for electric
l Household financial savings rate
vehicles. Emphasis is on providing
increases; and Current account
Connectivity affordable and environment friendly
deficit of the country stays within
public transportation options for the
l The Government has given a manageable levels.
common man.
massive push to all forms of
physical connectivity through l Comprehensive restructuring of Conclusion
Pradhan Mantri Gram Sadak Yojana, National Highway Programme Regular Budget for 2019-20
industrial corridors, dedicated proposed to ensure that the National details the estimates of receipts and
freight corridors, Bhartamala and Highway Grid of desirable length expenditure of the Union Government
Sagarmala projects, Jal Marg Vikas and capacity is created using
for the ensuing year. The expenditure
and UDAN Schemes. financeable model.
allocations have been made while
l Increasing the annual turnover l Use of rivers for cargo transportation working within the constraints of
limit from Rs. 250 crore to Rs. 400 envisioned, which will also help to current macro-economic situation
crore for a lower corporate tax rate decongest roads and railways. The and fiscal prudence. The Budget
of 25 per cent. movement of cargo volume on also highlights some issues faced by
Ganga is estimated to increase by the country and proposes significant
l Implementation of the essential nearly four times in the next four measures to effectively overcome
elements of the regulatory roadmap years. these challenges while working
for making India a hub for aircraft towards the goal of a US$ 5 trillion
financing and leasing activities l It is estimated that Railway
economy. q
to ensure development of a self- Infrastructure would need an
reliant aviation industry. investment of Rs. 50 lakh crores (E-mail:secy-dea@nic.in)

YE-1186/2019

Economic Interests
modernisation

Ajay Bhushan Pandey
ndia today envisions with 91.8 per cent tele-density, is the
being a US$ 5 trillion fastest-growing US$ 2.7 trillion-dollar As an accountable and responsive
I economy driven by
‘virtuous cycle of
investment’ in next few
years. Currently we
economy in the world.
At present, India is the sixth
largest economy in the world and
tax system to facilitate ease
of compliance and transparency,
the tax administration is all
are growing to be a US$ 3 trillion tax administration has played a set to use technology to speed up
very vital role in this journey of
economy within this year. We are
India’s economic development. In
regular business processes and
the third largest economy, next only eliminate opportunity for rent
to China and the USA, in terms of his legendary work Arthashastra,
purchasing power parity. Kautilya says, A nation’s status seeking.
relies upon its fiscal power and
With the growth mantra of Kosha Moolo Danda which means require an upgraded modernised tax
“Reform, Perform, Transform”, it is an that revenue is the backbone (of administration system which is not only
era of transformative revolutions for administration). Therefore, in today’s simple, convenient, comprehensive,
India. Revolutions with the appropriate time, India needs fiscal robustness modern, and taxpayer-friendly but is
use of technologies, innovations, to grow fast with good governance also judicious, responsive and prompt
potentials and resources to empower and transparency. And to achieve in addressing the challenges within
masses, re-energise prospects, upgrade this, we must have appropriate tax the ecosystem of tax administration to
institutions, restructure infra-build proposals and to implement them also persuade a tax compliant society.
up, endorse formal economy and
rejuvenate socio-cultural fabric.
India now puts recalibrated, intense,
leapfrogged efforts not only to gain
its losses during pre-Independence
period, but to achieve much more
to make a mark internationally and
compete with the World at her best.
These efforts are transforming the
national fabric of the society by
“putting the nation first”, along with
ample economic opportunities to
empower people so that they enjoy
ease of life and ease of business in a
manner where no one is left behind.
India, now with many firsts, has
more than 124 crore Aadhaar with
more than 99 per cent adult coverage
under the World’s largest digital
identification platform, 119 crore
bank accounts covering 99.8 per cent
financial inclusion of families with
more than 65 crore unique personal
accounts and almost 118 crore mobiles
Dr. Ajay Bhushan Pandey is Secretary, Department of Revenue, Ministry of Finance, Government of India.

We must also keep in mind two
essential constituents of tax policy.
One is our capacity to generate
higher and more reliable revenue
for the Government to provide
public services to sustain continuous
development and financial robustness;
and the second is to mobilise revenue
in a globalised market wherein we
need to work out for an arrangement
to dampen the artificial shifting of
profits/assets to low-tax heavens and
to counter aggressive tax competition
to save our economic interests.
Va r i o u s i n f r a s t r u c t u r a l a n d
social welfare facilities that the
Government provides are largely
from the taxpayers’ money. In today's
modern economic world, we need an
online taxation system which is just a
click away for the taxpayers to enjoy
a stress-free life with motivating income for FY 2019-20. Therefore, affordable house: An individual who
incentives to pay taxes and be part the benefits provided to the middle has purchased a house after taking a
of the tax base on the one hand; class taxpayers for FY 2019-20, are loan also gets a deduction on interest
while on the other, it is equally as under: payment on such loan up to Rs. 2
convenient for the tax administration lakh. If an individual has purchased an
to check deviation and evasions In the Finance Act, 2019 (Interim affordable house after taking a loan, he
and also provide hassle-free, non- Budget) will get a deduction of up to Rs. 3.5
interfaced, judicious services to lakh (instead of Rs. 2 lakh earlier) on
honest taxpayers. Rebate of income-tax for
taxable income up to Rs. 5 lakh: It interest payment on such loan.
Whenever it comes to tax, we is provided in the tax proposal that Deduction of up to Rs. 1.5 lakh
often perceive it as a penalty, while a resident individual having total on loan interest on an electric
we should basically see it as our taxable income up to Rs. 5 lakh shall
vehicle: If an individual has purchased
contribution to nation building. not be required to pay any income-
an electric vehicle after taking a loan,
Keeping in view the diverse socio- tax.
he will get a deduction of up to Rs.
economic contour of citizens of India
Further, with the deduction of up 1.5 lakh on interest payment on such
and their economic development, in
to Rs. 1.5 lakh available under Section loan.
order to be judicious in tax policy
80C of the Act, an individual with
the tax proposals are always made Therefore, an individual with
income up to Rs. 6.5 lakh will not be
keeping in mind the paying capacity income up to Rs. 11.5 lakh, who is
required to pay any income-tax.
of the payers’ class. We cannot paying interest on housing loan taken
trample the flowers from whom we Deduction of up to Rs. 3.5 lakh to purchase an affordable house, on
are to collect honey. (instead of Rs. 2 lakh earlier) on loan taken to purchase an electric
loan interest on purchasing an vehicle and has made investments
The tax proposals in The Finance
eligible for deduction under Section
(No. 2) Bill, 2019 which was presented
as part of main Budget has provided The tax proposals in The Finance 80C will be not be required to pay any
(No. 2) Bill, 2019 which was income-tax.
certain benefits to the common man
and the middle class taxpayers that presented as part of main Budget Increase in Standard Deduction
are applicable to taxable income for has provided certain benefits for salaried taxpayers: The amount
FY 2019-20. In this connection it of standard deduction was increased
may be noted that Finance Act, 2019 to the common man and the from Rs. 40,000 to Rs. 50,000.
which was presented as part of interim middle class taxpayers that are
Budget has provided a number of applicable to taxable income for Exemption for the Second Self-
benefits to the middle class taxpayers, Occupied House: Exemption from
FY 2019-20. levy of tax on notional rent of the
which are also applicable to taxable

second self-occupied house was on payout of taxable life insurance We are also in the process of
provided. policies proposed to be on income modernising our direct taxation
element only, instead of on the gross system with Direct Tax Code being
Capital Gains Exemption for
amount. framed and working our best to
Second House: Exemption to capital
arrange record revenue with tax base
gains up to Rs. 2 crore was provided for Pre-filling of Income Tax Return:
maximisation, essential tax reforms,
purchase/construction of two houses It is proposed to widen the scope of
(instead of one house earlier). process simplification, and tax relief
third-party reporting for enabling pre-
to senior citizens, divyangs and other
filling of income-tax returns for ease
Increase in threshold limits for deserving categories of people. We are
of compliance to the taxpayer.
Tax deduction at Source (TDS): The functioning to enhance further ease of
threshold limits for TDS are increased With India’s vision of speedy doing business, reduction of litigation,
as below: growth and to serve people with higher appropriate Acts to control money
i. Threshold limit for TDS on human development index ratings, laundering, black money, economic
bank interest, etc. increased from we do need a healthy tax policy fugitives and tax evaders, apposite
Rs.10,000 to Rs. 40,000. which has moderate tax structure action against tax evasion and better
with maximised tax base, ease to service to taxpayers.
ii. Threshold limit for TDS on rental comply, administrative transparency,
income increased from Rs. 1.8 non-adversarial tax regime, lowest The tax administration is working
lakh to Rs. 2.4 lakh. tax litigation, online simple services to maximise the tax base and phased
and procedures, credible adjudication withdrawal of profit-based incentives.
In the Finance (No. 2) Bill, 2019 system and tax abuse prevention To modernise and prevent tax abuse,
(Main Budget) mechanism. strong laws have been enacted to
combat the menace of black money,
Incentives for Purchase of Also, the integrity and efficiency benami transactions, economic
Affordable House: Interest deduction of the tax system should be highly
on loan taken for purchase of an offenders, etc. These need to be
credible in the eyes of taxpayers so that implemented rigorously to set as a
affordable house is proposed to be our tax administration motivates every
increased from the existing Rs. 2 lakh deterrent for future misadventures.
resident to be a proud self-compliant
to Rs. 3.5 lakh. contributor to the development As an accountable and responsive
Incentives for Purchase of of the country by being an honest tax system to facilitate ease of
Electric Vehicle: Interest deduction of taxpayer. The tax administration compliance and transparency, the
Rs.1.5 lakh is proposed to be given on is gearing up to alter its taxation tax administration is all set to use
loan taken for purchase of an electric approach from enforcement to self- technology to speed up regular
vehicle. motivated voluntary compliance business processes and eliminate
through technological means and tax opportunity for rent seeking. Online
Interchangeability of PAN and incentives. filing and tax refund mechanisms are
Aadhaar: In order to enable an already in place. In future, there would
individual who does not have PAN We h a v e c o m p r e h e n s i v e l y
hardly be any physical interaction by
to file return and carry out other modernised and eased out our indirect
the assessing officer with taxpayers
transactions which require quoting taxation system with implementation
for verification and assessment.
of PAN, it is proposed that such of Goods and Services Tax (GST),
the simpler and uniform tax structure Introduction of faceless assessment
individual can use Aadhaar in place
of PAN. on all goods and services since July (e-assessment scheme) will take place
2017 and have been able to achieve soon.
Incentives for NPS: Various entire tax incidence reflected in the
incentives proposed to be provided Also, pre-filling of returns is
tax invoices. This brings in complete expected to start shortly and digital
are (i) full exemption to the amount
transparency in indirect taxation transactions are being promoted
which can be withdrawn from NPS
system with no cascading effects of through tax incentive and penalty,
on closure of NPS account; (ii)
taxes to the retailers’ point resulting so that tax net is spread wide.
enhanced deduction of 14 per cent
in GST rate of either NIL or 5 per cent We may underline here that the
on Central Government contribution
on 99 per cent essential household technology has helped in collection
to NPS; (iii) deduction under Section
commodities of daily use. There is of actionable information and carrying
80C on contribution made by Central
no difference in GST rates across out e-verifications. This has led to
Government employees to their Tier-II
NPS accounts. States/UTs and there is a robust anti-
increase in tax base and is expected
profiteering mechanism to ensure to increase it further in future. q
TDS on Income Element only passing of rate rationalisation benefits
of Insurance Policy Payout: TDS to consumers. (E-mail:rsecy@nic.in)

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YE-1204/2019

skills & training
focus
Fostering Youth to take on

Opportunities of the Future Amitabh Kant
ncouraging the youth and Research and Development is scrutiny from the Income Tax
preparing them for future of strategic importance to foster a Department, facilitated by a mechanism
E livelihood opportunities
through skill development,
mentoring and support for
research and development
skilled, knowledge-led economy.
The proposal to establish a National
Research Foundation that assimilates
the research grants given to different
for e-verification to the launching
of an exclusive television channel
within the DD bouquet of channels
for promoting and discussing issues
is key to the nation’s advancement. Ministries will ensure that the overall affecting Start-ups. For ease of access
This Budget reiterates Government’s research ecosystem in the country is to credit for MSMEs, Government
commitment to empower the youth strengthened with a focus on identified has introduced the facility of availing
to take on challenges of the future thrust areas relevant to our national a loan up to Rs.1 crore within 59
and tap opportunities brought forth priorities. Massive online open courses minutes through a dedicated online
by changes in technologies and other through the SWAYAM initiative have portal. Under the Interest Subvention
transformations in the local and global helped bridge the digital divide for Scheme for MSMEs, Rs.350 crore
economic situations. disadvantaged section of the student has been allocated for FY 2019-20 for
community. To upgrade the quality 2 per cent interest subvention for all
Education and training are key to of teaching, the Global Initiative GST registered MSMEs, on fresh or
tap the inherent potential of youth and of Academic Networks (GIAN) incremental loans. As highlighted in
prepare them to take on diverse roles programme in higher education was the Budget speech, the Government
in different sectors, including new started, aimed at tapping the global has proposed to launch a Mission
and emerging sectors of the economy. pool of scientists and researchers. which will integrate our traditional
The draft report of National Education The IMPRINT or Impacting Research artisans and their creative products with
Policy 2019 lays greater focus on Innovation and Technology scheme global markets. Wherever necessary,
research and innovation to transform began as a Pan-IIT and IISc joint Intellectual Property rights, patents
India’s higher education system to initiative to develop a roadmap for and geographical indicators will be
one of the best global education research to solve major engineering obtained for the artisans. With this
systems. A large number of youth are and technology challenges in selected Mission then, the Indian traditional
able to take up industry-relevant skill domains needed by the country. Higher creative industry will be brought to the
training through the Pradhan Mantri educational institutions are becoming forefront of national and international
Kaushal Vikas Yojana (PMKVY) and the centres of innovation. markets.
various other schemes under ‘Skill
India is coming up as a launchpad The present budget is focussed on
India.’ The Government’s focus now
for Start-ups and their continued boosting investment, manufacturing
is to skill and re-skill youth in the new
growth needs to be encouraged. Budget and exports. All of these would lead
and upcoming skills like Artificial
2019-20 has brought various enabling to increase in employment. In order to
Intelligence (AI), Internet of Things, provisions for Start-ups ranging from a boost economic growth and provide
Big Data analytics, 3D Printing, relief from ‘angel tax’ and unnecessary an impetus to Make in India, the
Virtual Reality and Robotics, which
are gaining more and more value. As highlighted in the Budget speech, the Government has proposed to launch
Given the demographic trends that a Mission which will integrate our traditional artisans and their creative
show severe labour shortages for major
economies of the world, there is also products with global markets. Wherever necessary, Intellectual Property
a need to prepare our youth to take up rights, patents and geographical indicators will be obtained for the artisans.
jobs overseas. Increased emphasis will With this Mission then, the Indian traditional creative industry will be
be given to skill sets needed abroad, brought to the forefront of national and international markets.
including language training.
The author is CEO of NITI Aayog.

Government will launch a scheme National Sports Education Board for envisions setting up 100 new clusters
to invite global companies through a training of sportspersons would be set during 2019-20 which should enable
transparent competitive bidding to set up up under Khelo India Scheme. 50,000 artisans to join the economic
mega-manufacturing plants in sunrise value chain. Further, to improve the
and advanced technology areas, such Considering the fact that the majority technology of such industries, the
as Semiconductor Wafer Fabrication of people still live in villages and Scheme for Promotion of Innovation,
(FAB), Solar Photo Voltaic cells, depend on agriculture and traditional Rural Industry and Entrepreneurship
Lithium storage batteries, Solar electric industries, the ‘Scheme of Fund for (ASPIRE) has been consolidated
charging infrastructure, Computer Upgradation and Regeneration of for setting up of 80 Livelihood
Servers, Laptops, etc. The Government Traditional Industries’ (SFURTI) aims Business Incubators (LBIs) and 20
aims to leapfrog and envision India to set up more Common Facility Centres Technology Business Incubators,
as a global hub of manufacturing of (CFCs) to facilitate cluster based which will help foster at least 75,000
Electric Vehicles. The manufacturing development to support traditional agri-entrepreneurs.
and supply of solar storage batteries industries to be more productive,
and charging infrastructure is expected profitable and capable of generating Circular economy has the potential
to provide a further impetus to job sustained employment opportunities. to create millions of jobs and to
creation and entrepreneurship. As the The focussed sectors are Bamboo, foster several new entrepreneurs.
world’s third largest domestic aviation Honey and Khadi clusters. SFURTI Committed to the agenda of sustainable
market, the time is ripe for India to development, 30,000 km of PMGSY
enter into aircraft financing and leasing
The manufacturing and supply roads have been built using Green
activities from Indian shores. This will of solar storage batteries and Technology, Waste Plastic and Cold
Mix Technology, thereby reducing
lead to the creation of aspirational jobs charging infrastructure is expected
in aviation finance. carbon footprint. The budget proposes
to provide a further impetus to job to expand the Swachh Bharat Mission
‘Khelo India’ Scheme, launched in creation and entrepreneurship. As to undertake sustainable solid waste
October, 2017, has had a significant the world’s third largest domestic management in every village. We will
impact on creating awareness across support private entrepreneurships in
the country on sports as a career option
aviation market, the time is ripe driving value-addition to farmers’
for young people and as an integral for India to enter into aircraft produce from the field and for those
part of wellness. The Government financing and leasing activities from allied activities, like bamboo
is committed to expand the scheme from Indian shores. This will lead to and timber from the hedges and for
and to provide all necessary financial generating renewable energy. All
support needed for this initiative. the creation of aspirational jobs in these activities of creating value
To popularize sports at all levels, a aviation finance. from waste have great potential for

employment generation, including for entrepreneurship through various 2022, 1.95 crore houses are proposed
our rural youth and at the same time, schemes such as MUDRA, Stand to be constructed and provided to
promoting sustainable development. Up India and the Self Help Group the eligible beneficiaries. Measures
Similarly, the new initiatives envisaged (SHG) movement. In order to further such as increased tax deductions for
by the Department of Drinking Water encourage women enterprise, this interest paid on loans for houses up
and Sanitation under the Jal Shakti budget extends the Women SHG to Rs. 45 lakh and finalization of a
Mantralaya for sustainable water interest subvention programme to all model tenancy law will further boost
supply management will focus on districts. Every verified member of the housing and real estate sector
reuse and recycling. India’s ability to a Self Help Group possessing a Jan and lead to employment generation
manage water, I believe, will determine Dhan Account would be given Rs. 5000 for construction workers, real estate
its destiny, and in the course of such a over and above their saving, and at developers, architects and a host of
transformation, millions of jobs and least one woman in every SHG would others engaged in the sector. The
entrepreneurship ventures will be be eligible for a loan up to Rs. 1 lakh plan to launch the ‘Study in India’
created. under the MUDRA Scheme. Budgetary programme to attract foreign students
allocation has also been made for in higher education will inevitably
Connectivity is the lifeblood of providing incentives to entities for create more demand for student housing
an economy. The Government has providing maternity benefits to women and employment generation for those
given a massive push to all forms of employees. needed to construct houses and manage
physical connectivity through Pradhan student hostels.
Mantri Gram Sadak Yojana (with an The Stand Up India Scheme has
emphasis also on upgrading roads brought human dignity and self- The Government is, at the same time,
connecting villages to rural markets), esteem to so many of its beneficiaries, committed to ensure social security and
industrial corridors, dedicated freight who are mostly women and from welfare for the working population
corridors, Bhartamala and Sagarmala the Scheduled Castes and Scheduled across sectors. Pradhan Mantri Shram
projects, Jal Marg Vikas and UDAN Tribes. The Ministry of Petroleum Yogi Maandhan launched on 5th
Schemes. The Government proposes and Natural Gas has enabled SC/ST March, 2019 by the Prime Minister
to enhance the metro-railway initiatives entrepreneurs in providing Bulk LPG already has about 30 lakh subscribers.
by encouraging more PPP initiatives Transportation. Machines and robots The Scheme aims at providing
have been deployed for scavenging, Rs. 3,000 per month as pension on
and ensuring completion of sanctioned
hence imparting dignity among manual attaining the age of 60 to crores
works, while supporting Transit
scavengers. The synthesis between of workers in the unorganized and
Oriented Development (TOD) to ensure
Stand Up and Start Up with commercial informal sectors. With the new initiative
commercial activity around transit hubs.
banks playing the catalyst has brought of Pradhan Mantri Karam Mandhan
The proposed massive programme
of railway station modernization
this transformational change. In Yojana, pension benefit is now extended
response to the popularity gained by to about 3 crore retail traders and small
is also going to lead to increase in the scheme among the SC and ST
employment opportunities. The UDAN shopkeepers whose annual turnover
communities and considering the is less than Rs. 1.5 crore. While an
Scheme is providing air connectivity positive strides made by it, the Stand
to smaller cities and enabling the allocation of Rs. 500 Crores has been
Up India Scheme would be continued made for Pradhan Mantri Shram Yogi
common citizens of our country to avail for the entire period coinciding with
air travel. At the same time, digital Maandhan, this Budget allocates
the 15th Finance Commission period Rs. 750 crores for Pradhan Mantri
connectivity has remained a priority for of 2020-25. The Banks will provide K a r a m Yo g i M a a n d h a n . T h i s
the Government. To bridge rural-urban financial assistance for demand based Government is putting in tremendous
digital divide, Bharat Net is targeting businesses, such as for acquisition of
internet connectivity in local bodies in efforts to streamline and simplify the
scavenging machines and robots. multiple labour laws into four labour
every Panchayat in the country. Under
the Pradhan Mantri Gramin Digital The revival of and boost given codes that would simplify running
Saksharta Abhiyan, over two crore to the real estate and housing sector business for employers and at the
rural Indians have so far been made in this budget has direct implications same time ensure rights and welfare
digitally literate. All these initiatives for employment generation as the for workers.
have unleashed increased employment sector employs both semi-skilled and With a huge line-up of initiatives
generation, particularly for the youth. unskilled workers as well as those who aimed at harnessing the employment
are highly skilled. The Government had
and entrepreneurship potential in
Women’s contribution to the already laid the ground for affordable
economy is acknowledged as being diverse and emerging sectors, India is
houses with the completion of 1.54
indispensable and most valuable. all set to foster its youth to take every
crore rural homes under Pradhan
challenge head-on and emerge as future
Working women hostels have received Mantri Awas Yojana-Gramin and 26
leaders in their communities as well as
a two-fold hike at Rs. 165 crore in lakh houses under PMAY-Urban in
on the global stage. q
this Budget. This Government has the past five years. In the second phase
supported and encouraged women of PMAY-G, during 2019-20 to 2021- (E-mail: amitabh.kant@nic.in)

YE-1213/2019

WATER MANAGEMENT
spotlight
Water with a capital ‘W’: The way forward

Parameswaran Iyer
ater is at the top of the
development agenda of
W the new Government,

as emphasized by the
Prime Minister after
the Finance Minister’s
budget speech earlier this month.
Calling for a jan andolan (people’s
movement) along the lines of the
Swachh Bharat Mission, the Prime
Minister emphasized that jal sanchay
(water collection and conservation)
is not possible without jan shakti
(people’s power). Earlier, in her
budget speech, the Finance Minister
said that the first concrete step taken in
the direction to ensure water security
for all in the country by the Central
Government has been the constitution
of the new Jal Shakti Mantralaya. This
bold institutional step has integrated
the erstwhile Ministry of Water
Resources, River Development and
Ganga Rejuvenation, with the Ministry
of Drinking Water and Sanitation, and
has led to the formation of a single new
Ministry focused on Water. This is a
major step towards the consolidation
of the management of water resources necessary to resolve conflicting issues reform, which will have a permanent
with the delivery of drinking water and take necessary decisions. This led and positive impact on integration in
and sanitation as well as a thrust to these Ministries and Departments the water sector.
towards the goal of providing safe working in silos. While the NITI Aayog
and adequate piped water supply for Integrated water management in
had made a solid start at integrating India has never been more relevant
all households. the sub-sectors of water by creating than it is today. India is entering water
The Story So Far an integrated water management crisis territory, with certain estimates
index and ranking States on this basis, indicating that water demand will
Until now, the institutional the creation of the new Jal Shakti exceed supply by a factor of two by
landscape for water in India has been Mantralaya is a big bang governance 2030, if we continue with a business-as-
somewhat fragmented, with about
seven Ministries and more than 10 Calling for a jan andolan (people’s movement) along the lines of the
Departments having a say on different Swachh Bharat Mission, the Prime Minister emphasized that
aspects of water management and
use. Not only have these had some jal sanchay (water collection and conservation) is not possible
overlapping roles and responsibilities, without jan shakti (people’s power).
but no single body had the authority
The author is Secretary, Department of Drinking Water and Sanitation, Ministry of Jal Shakti, Government of India.

decentralized, but integrated, water
resource management and service
delivery, with a key focus on water
conservation, source sustainability,
storage and reuse, wherever possible,
by involving the communities
themselves, as they are the primary
stakeholders. There are important
lessons to be learned from the best
practices of decentralized planning for
water conservation such as in Hiware
Bazaar, Maharashtra and the Swajal
model of community-based drinking
water in Uttarakhand — which need
to be scaled up.
Jal Shakti Abhiyan

In water-stressed areas, especially
in the designated dark blocks and in
usual approach. This has the potential currently estimated to have access areas affected by water quality issues,
of driving economic losses of an to 40 litres of water per day through surface waterbased multi-village
estimated 6 per cent of GDP by 2050 some source, only about 18 to 20 per schemes need to be designed; while
and potentially leading to a significant cent of rural households in India have in groundwater rich areas, single
percentage of our population having connections for piped water supply. As village, groundwater-based schemes
limited or no access to drinking water. the Finance Minister mentioned, one with end-to-end source sustainability
Recent satellite data has also shown of the priorities of the government is to measures should be encouraged. These
that India’s taps could run completely provide piped water supply to all rural schemes also need to have provisions
dry in the medium term, with cities like households by 2024 in a sustainable for rainwater harvesting through
New Delhi, Bengaluru, Chennai and manner. This has been backed with a household or community storage,
Hyderabad completely running out of budget of approximately Rs.10,000 which can also be used for recharging
groundwater. crores for rural drinking water for groundwater. Other local methods of
2019-20 for the Jal Shakti Mantralaya, water storage and conservation must
Breaking Down the Challenge in addition to the Rs.10,000 crores for also be encouraged. A good example
Ahead the Swachh Bharat Mission- Grameen. of local approaches to developing
The Jal Shakti Mantralaya will promote infrastructure for storage of water
Some inefficiencies in the water
sector have led to challenges with
respect to important outcomes such
as rainwater storage and greywater
treatment and reuse. Presently, India
captures only eight per cent of its
annual rainfall, among the lowest in
the world. Lack of proper maintenance
of existing infrastructure causes
further losses of almost 40 per cent of
piped water in urban areas. Treatment
and reuse of greywater is almost
non-existent. As a benchmark, Israel,
another country facing severe water
shortages, treats 100 per cent of its
used water and recycles 94 per cent
of it, meeting more than half of its
irrigation needs through this reused
water.
In terms of drinking water, while
81 per cent of all habitations are

is seen in Dewas district in Madhya cent of the by-product of all domestic drought-like conditions. Behaviour
Pradesh. Here, through Government water. This may be done through simple change communication initiatives for
support to farming communities for waste stabilization ponds, constructed both internal and external stakeholders
building ponds as alternative storage wetlands and similar local infrastructure will be critical in changing attitudes
and supply sources, the district has projects in order to recycle this water for towards water. All stakeholders, from
achieved a 6 to 40 feet rise in the water agriculture the sector that consumes 80 State governments to citizens, must
table, even while increasing irrigated per cent of our water. be taken on board and a national
area by 120-190 per cent. consensus will have to be built.
Some States, like Gujarat, are
To that effect, all integrated water
To this end, the Ministry of Jal leading the efficient use of agricultural
management approaches would do well
Shakti recently launched the Jal Shakti water by bringing in micro-irrigation
to borrow from the effective behaviour
Abhiyan – a collaborative effort of to over six lakh farmers, 50 per cent
change communication initiatives
the Central and State Governments of which are small and medium ones.
of the Swachh Bharat Mission, and
to accelerate progress on water The Andhra Pradesh Government
attempt to create an army of grassroots
conservation activities in identified is also prioritising water efficiency
motivators on water, on the model
1592 waterstressed blocks in 256 in agriculture, by earmarking
of the swachhagrahis for sanitation.
districts. Under this campaign, over Rs. 11,000 crore to bring 40 lakh acres
Initiatives to strengthen the capacity
1000 senior Central Government of land under micro-irrigation over the
of this field force, sarpanches, and
officers will join the States to promote next five years. If these measures are
block and district officials are already
focused interventions for jal sanchay combined with reuse of greywater for
underway.
and jal sanrakshan (water collection agriculture, it will result in a significant
and conservation). reduction of demand from our water This approach of holistic and
resources. integrated water management is unique
The Way to Har Ghar Jal for any large federal country. Just
A required Jan Andolan: Water as like the country did in the Swachh
Going forward, another area of “everyone’s business”
focus for water conservation in each Bharat Mission, India could lay out
drinking water scheme is developing Raising awareness and changing a template for other countries on
infrastructure for collection and basic perceptions on water also needs to be securing national water security by
treatment of domestic non-faecal waste- an important priority. Even today, water integrating fragmented institutions and
water, kitchen or bathing waste water is regarded as an infinite resource and making water security everyone’s
— also called greywater — which is abundantly wasted in many parts business. q
typically accounts for nearly 80 per of the country, while others suffer (E-mail: param.iyer@gov.in)
do you know?
National Common Mobility Card:
India's First Indigenously Developed Payment Platform
India’s first indigenously developed payment ecosystem for transport based on National Common Mobility Card (NCMC) standards
was launched in March 2019. This is the first of its kind in India. NCMC Card, SWEEKAR (Swachalit Kiraya: Automatic Fare
Collection System) and SWAGAT (Swachalit Gate) is used on NCMC Standards.
These are bank issued cards on Debit/Credit/Prepaid card product platform. The customer may use this single card for payments
across all segments including Metro, bus, suburban railways, toll, parking, smart city and retail. The stored value on card supports
offline transaction across all travel needs with minimal financial risk to involved stakeholders. The service area feature of this card
supports operator specific applications, for example, monthly passes, season tickets, etc.
Ministry of Housing and Urban Affairs brought to the fore the NCMC to enable seamless travel by different metros and other
transport systems across the country besides retail shopping and purchases.
NCMC Ecosystem offers the value proposition for customers as they need not to carry multiple cards for different usage. Further,
the super quick contactless transactions will improve the seamless experience. For operators, NCMC ecosystem brings common
standards for implementation without vendor lock-in.
This will also help in higher digital payments penetration, savings on closed loop card lifecycle management cost and reduced
operating cost. The rich data insights may be used by operators for business intelligence leading to efficient operation. NCMC
Ecosystem will further help government in digitization of low value payments and reduced cost for the entire ecosystem.
Source: PIB

k
S a n D is
k
k
S a n D is
S a n D is
Can Make The Payment

Via-PTM, Google Pay, Phone Pay, Mobikwib, Payzapp
Credit Card, Debit Card
Sushil Kumar
Rank 481 (2017-18)
YE-1208/2019

enhancing facilities
special article
Transforming Urban India Durga Shanker Mishra

ndia has been urbanising
I
r a p i d l y. A s p e r l a s t
census 2011, 37.7 crores
people (31.2 per cent of
population) lived in urban
areas. This is projected
to grow to 60 crores by 2031 and 80
crores by 2051 (High Powered Expert
Committee [HPEC], 2011). While
urbanisation is inevitable, there has
been substantial increase in census
towns/out growths, and delivery of
civic services has severely lagged
behind leading to huge cumulative
gaps in urban infrastructure.
McKinsey’s Global Institute’s
R e p o r t t i t l e d “ I n d i a ’s U r b a n
Awakening: Building Inclusive
Cities, Sustaining Economic Growth
(2010)”, observes that India faces in the lives of people with inclusive, in coverage of sewerage/septage
severe challenge of low capital participative and sustainable approach. needed focus, for which 500 cities
investment in urban infrastructure, Not only there has been a substantial (with over 1 lakh population) were
which is around US$ 17 per capita increase in the financial commitments covered under the scheme Atal
as compared to US$ 100 in other and allocation of funds but above Mission for Rejuvenation and Urban
countries of same level. Report all, the powerful mantra of “Sabka Transformation (AMRUT). Lastly,
estimated that an investment to the Saath, Sabka Vikas” given by the
tune of US$1.2 Trillion (Rs. 54 lakh Prime Minister has inspired the policy Budget 2019-20 with 10 point
crores at 2009-10 prices) would be thrust for achieving ease of living vision for the decade is aimed
required till 2030; out of which half is for the citizens. This can be seen in at building physical and social
required to take care of the backlogs
of earlier years! Report mentions
Government’s three level approach infrastructure. Government has
described below. announced in the budget its
that in 2008, India’s urban areas
accounted for 58 per cent of overall At the first level, for all over 4,300 intention to invest around
GDP and that cities generated lion’s urban local bodies (ULBs) flagship Rs. 100 lakh crores to fund India’s
share of tax revenue between 80-85 schemes like Swachh Bharat Mission infrastructure in next five years.
per cent. (SBM-U), Pradhan Mantri Awas
Yojana (PMAY-U) and Deendayal
For the first time, Budget has set
Missions for Urban Rejuvenation Antyodaya Yojana-National Urban a definite goal i.e. aspiration to
Right since 2014, Government Livelihood Missions (DAY-NULM) take the economy to US$ 5 Trillion
embarked on one of the most were launched to address the issues level in next five years backed with
comprehensive programmes of planned of cleanliness, affordable housing and Aastha (Hope), Vishwas (Trust) and
urban poverty alleviation. At second
and systematic urban development with Aakansha (Aspirations) of 130 crore
the launch of various flagship missions level, provision for universal water
to bring about a transformative change supply and substantive enhancements Indians.
The author is Secretary, Ministry of Housing and Urban Affairs, Government of India.

Smart City Mission (SCM) using city (Trust) and Aakansha (Aspirations) of people have higher incomes than the
challenge mode was launched in 100 130 crore Indians. average income in rural areas.
cities for improving core infrastructure
and providing better quality of life “I am fully confident that as a Promoting Investment for Urban
and related urban services using ICT nation, with our collective efforts, in Rejuvenation
capabilities, etc. the next five years we will definitely
reach the destination of $ 5-trillion Since the launch of various urban
Most of the schemes were designed economy…Making India $5 Trillion flagship schemes, around Rs. 1,62,165
with participatory approach and economy was not just the Government’s crore of central assistance has been
involvement of the citizens. Schemes aim but that of every Indian.” released till date during the period
like SBM become a “Jan Andolan”, 2014-19 mainly for Metro projects,
a people’s movement which led to its Narendra Modi, PMAY-U, AMRUT, SCM and SBM.
remarkable success in such a short Prime Minister of India However, total investment under
time. Budget for 2019-20 has underlined these schemes as per approved cost
that Government sees urbanisation of related projects is to the targetted
Enhanced Budgetary Support and tune of Rs. 10,45,076 crores which
Fund Availability as an opportunity, not a challenge.
McKinsey’s report (2010) narrates includes contributions of States/
The critical issue of higher funding ULB’s/ Beneficiaries and PPP projects.
that India’s urbanisation presents huge
required for urban infrastructure was It is, therefore, clear that central
opportunity-since by the year 2030, 70
addressed by substantial increase in assistance is generating around six
per cent of GDP, 85 per cent of total
budgetary allocations. As against a and half times investments for creating
tax revenues and 70 per cent of new
total of Rs. 1,58,164 crores allocated urban infrastructure. Development
net employment opportunities will be
during 10 year period from 2004-05 of urban areas will constitute major
contributed by cities.
to 2013-14, the cumulative budgetary part of the investment of Rs. 100 lakh
allocations during next six years, Further, cities have been found to crore in infrastructure. That will spur
i.e. 2014 onwards (including current contribute towards achieving inclusive significant push to country’s GDP and
year’s estimate) have been to the tune growth as they bridge the rural and tax revenues helping in the march
of Rs. 2,68,455 crores. The annual urban divide. McKinsey’s report says towards US$ 5 Trillion Economy in
average budgetary allocation during the that around 20 crore rural population, next 5 years. Needless to say, such
preceding 10 year period was around who live close to cities, will benefit investments are very closely related to
15,800 crores which was increased with improved access to jobs, markets or in fact sin qua non to India’s future
substantially to more than Rs. 44,000 and infrastructure in urban areas. Such economic growth!
crores (inclusive of allocations under
Extra Budgetary Resources (EBR), i.e., OVERALL INVESTMENT IN
approximately 3 times increase! Budget URBAN REJUVENATION
for 2019-20 has proposed allocation
of Rs. 48,032 crores for various
urban Missions along with additional
provision of around Rs. 20,000 crores
for funding PMAY through EBR
mechanism, i.e., a total availability of
above Rs. 68,000 crores.
India’s March to US$ 5 Trillion

Economy: Cities as Engines of
Growth
Budget 2019-20 with 10 point vision
for the decade is aimed at building

physical and social infrastructure.
Government has announced in the
budget its intention to invest around
Rs. 100 lakh crores to fund India’s
infrastructure in next five years. For the
first time, Budget has set a definite goal
i.e. aspiration to take the economy to
US$ 5 Trillion level in next five years
backed with Aastha (Hope), Vishwas


Since the launch of various urban
flagship schemes, around Rs.
1,62,165 crore of central assistance
has been released till date during
the period 2014-19 mainly for
Metro projects, PMAY-U, AMRUT,
SCM and SBM.
Metro Projects: Connecting City
Budget 2019-20 has termed
connectivity in the country as lifeblood
crores for manufacturing of 378 metro SBM-U, wherein 24 states and more
of an economy. Government’s
cars for Mumbai Metro Rail Corridors. than 95 per cent of cities have been
Metro Rail Policy, 2017 aims to
This is one of the largest orders of declared Open Defecation Free (ODF).
focus on systematic planning and
Metro Rail coaches in recent times. In Solid Waste Management, 90
implementation of Metro Rail Systems
per cent of wards in the country are
with last mile connectivity using greater One Nation One Card now covered under door-to-door
private participation and innovative
The launch of India’s first collection with 56 per cent of waste
financing through Transit Oriented
indigenously developed payment being scientifically processed.
Development (TOD) and Land Value
Capture Finance, etc. Budget 2019- eco system for transport based on Economic Survey 2018-19 has
20 has referred to approval of 300 national common mobility card by the analysed direct impact of improved
km of new Metro Rail projects and Prime Minister in March 2019 was sanitation on health indicators and
operationalisations of 210 km Metro referred to in the budget speech. This has reported that becoming ODF has
lines during 2018-19. With this, a total includes Automatic Fare Collection reduced deaths due to diarrhoea and
of 657 km of Metro Rail Networks have System (AFCS) and National Common malaria, especially children under the
now become operational in 18 cities Mobility Card (NCMC) which has laid age of 5, new born, etc. Further, the
across the country with 873 km being foundation of “One Nation One Card”. financial savings from household toilets
at various stages of implementation in This card is usable in all kinds of transit has exceeded the related financial cost
27 cities. as well as retail systems. With this of households by 2.4 times for the
internationally accredited system, India poorest. A World Bank study has
It has been proposed in the Budget joins the very few elite nations who stated that inadequate sanitation costs
to enhance the Metro Rail Networks have complete payment eco-system India about 6.4 per cent of its GDP.
by encouraging PPP initiatives and that has immense export potential. MoHUA is committed to fulfil the
ensuring completion of sanctioned
works, while supporting Transit Swachh Bharat Mission (Urban)- Prime Minister’s Sankalp to make
Cleaner and Healthier India India ODF much before 2nd October,
Oriented Development (TOD) to ensure 2019 when nation celebrates 150th Birth
commercial activity around transit Budget has highlighted the Anniversary of Mahatma for whom
hubs. The first Regional Rapid Transit remarkable progress achieved under Swacchata was paramount.
System (RRTS) corridor between Delhi
and Meerut for 82 km of route length at
an estimated cost of Rs. 30,274 crores
has commenced works.
Metros Support “Make in India”

MoHUA has made concerted
efforts for indigenisation of Metro
Rail Systems in the country. Ministry
has stipulated that minimum 75 per
cent coaches procured under any tender
will have to be manufactured in India.
State-of-the-art driverless trains will
now be manufactured indigenously by
Bharat Earth Movers Limited (BEML),
a Public Sector Undertaking, which has
recently bagged a contract of Rs. 3,015

Har Ghar Jal: AMRUT
As per NITI Aayog, India is
facing water crisis with around 50
per cent population experiencing
high to extreme water shortage.
Budget 2019-20 has emphasised
that achievement of India’s water
security and providing access to safe
drinking water to all is priority of the
Government. Jal Jeevan Mission of
newly created Jal Shakti Mantralaya
will converge with other schemes for
sustainable water supply management
across the country.
AMRUT Scheme was launched
in 500 cities across the country in
June 2015. This envisages achieving
universal coverage of water supply
and increasing sewerage and septage structures, undertake measures for get smarter, but also laid a foundation
coverage from 31 per cent to reuse of treated waste water, revive of aspirational India for better quality
62 per cent. Under the scheme, State at least one water body and undertake of life. It has been proposed to execute
Annual Action Plans (SAAPs) for all plantations. 5,151 projects worth Rs. 2,05,018 crore
States/UTs for Rs. 77,640 crores have in 5 years. Over 65 per cent of these are
been approved and projects worth Energy Saving at different stages of implementation.
Rs. 64,761 crore are under construction; Some of the innovative projects include
out of which projects of Rs. 4,163 crore Budget 2019-20 has underlined
vital importance of ensuring sustainable Integrated Command and Control
have been completed. So far Rs. 58.52 Centres (ICCC), Smart Streets/Roads,
lakh water tap and Rs. 36.96 lakh sewer energy use and scaling up of the use of
LED bulbs. Under AMRUT scheme, Public Bike Sharing, Smart Solar
connections have been added.
62 lakh street lights have been replaced Energy, Smart Poles, Smart Water
Promoting Water Conservation: by LED lights, which has led to Meters, Integrated Smart Traffic/
Jan Andolan reduction of Rs.10.85 lakh ton of Transit Management, etc. These unique
carbon emission. initiatives are transforming the urban
Ministry has launched Jal Shakti landscape across the nation.
Abhiyan to make water conservation Smart Cities Mission: Towards
a “Jan Andolan”, four major thrust Smarter India Housing for All by 2022-PMAY
areas are: a) Rain Water Harvesting, (Urban)
b) Re-use of treated waste water, As the Smart City Mission
c) Rejuvenation of water bodies, and completes four years of implementation, Government is committed to
d) Plantation. 756 ULBs have been all the smart cities have picked up provide “Housing for All” by 2022.
identified as water stressed; they are momentum in implementing various Around 84 lakhs houses with an
being encouraged to enforce Building- projects. SCM has not only fostered investment of about Rs.5 lakh crores
by-laws to build rain water harvesting a healthy competition among cities to have been sanctioned under PMAY-U;
wherein construction has started
in over 48 lakhs and 26 lakhs have
been completed and handed over to
beneficiaries. Over 13 lakh houses
are being constructed using new
technologies. Through Global Housing
Technology Challenge-India (GHTC-I),
Government has identified 54 best
available construction technologies
across the globe. Six Light House
Projects using these technologies, as
open laboratories, will be launched
soon. The Prime Minister has declared
the year 2019-20 as “Construction
Technology Year”.

Promotion of Digital Payments: 100
PMAY(U) Progress per cent Digitisation of Government
Transactions
Union Budget 2019-20 has
referred to increasing acceptance and
promotion of digital payments by
Government. MoHUA has successfully
used the web based PFMS to digitise
nearly 100 per cent of all its payments
(around Rs. 60,000 crore annually)
made by more than its 500 offices
spread over the country. In addition,
collection of all Government receipts
has now been fully digitised. By doing
this, Ministry has met the objective of
Digital India Mission for making all
financial transactions cash less.
Despite this impressive progress to remove the conflicting mandate,
Way Forward
under PMAY-U, there is huge demand the Finance Minister in her speech
for rental housing, which gets mentioned to return the regulation Government of India is committed
discouraged with current rental laws authority for the housing finance sector to the vision of developing urban
with imbalanced relationship between from NHB to RBI. All these measures areas with ease of living, responsive
rentor and rentee. Government is will boost Affordable Housing. governance, clean and sustainable
framing Model Tenancy Law, which environment, rapid economic growth
will be circulated to the States/UTs Ease of Living and livelihood opportunities for
very soon. the citizens. We are building cities
Budget 2019-20 has focussed on of the future. We plan to follow
Budget 2019-20 has increased the Government’s aim to improve ease a comprehensive, inclusive,
exemption limit of interest payment of living for the citizens. MoHUA participatory and data driven approach
on loan for the first purchase of an released the first ever ‘Ease of Living for scaling up urban transformation
Affordable House costing up to Rs. 45 Index’ in 2018 covering 111 Cities, with our learnings in smart cities
lakh from Rs. 2 lakh to Rs. 3.5 lakh; and has recently launched assessment and all other missions in the nation’s
and has allowed capital gains from frameworks for Ease of Living Index- journey towards US$ 5 Trillion
sale of house to be invested on start up 2019. As per World Bank’s, Doing Economy and a New India.
business with no tax liability. Business Report-2019, India’s rank in
Ease of Doing Business in Construction References
Currently National Housing Bank Permits has improved from 181 in 2018 1 Mckinsey Global Institute (2010). India’s
(NHB) besides being a refinancer to 52, i.e. a record jump of 129 places. urban awakening: building inclusive
and lender, is also a regulator for the Online Building Permission System cities, sustaining economic growth.
housing finance sector. For efficient (OBPS) has been implemented in McKinsey & Company
regulation that is conducive to the 1,705 cities including 439 AMRUT 2 MoUD (2011). Report on Indian
growth of the housing sector, and cities so far. Infrastructure and Services, Report of
the High Powered Expert Committee
(HPEC) for Estimating the Investment
Requirements for Urban Infrastructure
Services, Ministry of Urban Development
(MoUD), Govt. of India
3 Union Budget 2019-20. Ministry of
Finance, Government of India
4 Debroy B, Ganguly A, Desai K 2018.
Making of New India: Transformation
under Modi Government, Wisdom Tree
5 Debroy B, Malik A (2017) India@70:
Capturing India’s transformation
u n d e r N a re n d r a M o d i , Wi s d o m
Tree q
(E-mail:secyurban@nic.in)

An ISO 9001:2015
Certified Company
GS MENTORS
IAS-2020 lkekU;
GENERAL STUDIES vè;;ufgUnh ekè;e dh rS;kjh vc
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Ex-Assistant Prof. of Economics, DU Over 12 years of teaching experience Over 13 years of teaching experience Over 11 years of teaching experience
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YE-1211/2019
Assistant Professor, DU Over 11 years of teaching experience Over 9 years of teaching experience Over 11 years of teaching experience
636, Mukherjee Nagar, Delhi-9 011- 27607070, 7840888777 Website: www.gsmentors.com e-mail: gsmentors1@gmail.com

HealthCare
inclusivity
Moving Towards Better, Equitable and

Affordable Health Services
Indu Bhushan
ndia has achieved India are overburdened, underfunded (Source: National Health Accounts,
significant public health and their utilisation varies widely. 2015). India spends only 21 per cent
I gains and improvements

in health indicators over
last three decades. We
have been able to wipe
More than half of health services are
provided by the private sector which
is not effectively regulated.
of its total health expenditure from
the general government revenue and
as high as 62 per cent of total health
expenditure is out-of-pocket (Source:
Moreover, health sector continues
out the scourge of diseases such as
to be characterised by high out-of- National Health Accounts, 2015).
polio, guinea worm disease, yaws and
maternal and neonatal tetanus and pocket expenditure, low financial The focus of public policy on
control the incidence of HIV/AIDS protection, low health insurance health since independence has
that crippled people and their ability coverage amongst both rural and urban been on building and strengthening
to build better lives for themselves. population. According to one estimate, public healthcare delivery with the
each year 6 crore people are pushed Government assuming the role of a
Our life expectancy has increased from
below the poverty line as they meet
57.91 years in 1990 to 68.65 years ‘provider’ of services. Consecutive
their health care needs by spending a
in 20161 and the Total Fertility Rate Governments have launched health
large proportion of their income and
(TFR) has reduced sharply from 3.4 in programmes with a supply-side focus
savings, borrowing money or selling
1992-932 to 2.2 in 2015-16.3 The infant with the aim of improving health of the
their assets.
mortality rate has declined from 88.5 people. However, in the last decade,
per 1,000 live births in 1990 to 34 per One of the major causes of this the Governments introduced new
1,000 live births in 2016.4 We have also situation is the persistent underfunding initiatives to strengthen demand-side
achieved the Millennium Development of the country’s public health care financing and address gaps in equity
Goal (MDG) in respect of the Maternal system. India’s general government and affordability of healthcare.
Mortality Ratio which declined from expenditure on health has remained
556 per lakh live births in 1990 to stagnant over the last two decades The Rashtriya Swasthya Bima
174 per lakh live births in 20155 and at close to 1.2 per cent of its GDP Yojana was launched in 2008 with
reached close to achieving the Under-5
Child Mortality target (U5 MR level of
43 against a target of 42).
However, challenges remain in
the health system in India and present
a distinctive opportunity to further
build and reform our health sector.
India is currently facing the unique
situation of a ‘triple burden of disease’.
As the mission of eradicating major
communicable diseases remains
unfinished, the population is also
bearing the high burden of non-
communicable diseases and injuries.
Delivery of healthcare services
in India remains inadequate and
fragmented. Public sector hospitals in
Dr. Indu Bhushan is CEO of Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB - PMJAY) and the National Health Authority
(NHA), Government of India.

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annual cover of INR 30,000 per family
at the central level, catering mostly
to secondary care hospitalisation
conditions while many State schemes
catered to tertiary care conditions.
However, these schemes worked
independently of the larger healthcare
system in the country and resulted in
further increasing the fragmentation
of risk pools. Additionally, these
schemes did not have a strong linkage
with primary healthcare. As a result,
healthcare in India remains fragmented
and operates in silos rather than offer a
continuum of care covering preventive,
promotive, rehabilitative, and curative
care to the citizens.
This makes a strong case for 6RXUFH:
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on all counts – key outcome indicators, world’s largest fully government- continuum of care. Ayushman Bharat
public health financing, risk pooling, funded health insurance scheme, marks
as well as access to and quality of 7KH IRFXXVRISXEOLF FSROLF\RQ QKHDOWKVLQQFHaLQGHSHQ
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catastrophic expenditure and poverty, ZLWKDV WKHDLPRI LPSURYLQJ KHDOWKRIWK KHSHRSOH +RZHYHU
families (or 50 crore people) for to be solved through a silo-approach
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treatment of serious illnesses. Through approached though a continuum of care

growth. PMJAY, Government of India aims to offering an entire gamut of healthcare
7KH 5DVVKWUL\D 6ZD DVWK\D %LPPD <RMDQD Z ZDV ODXQFK KHG LQ ZLWK DQQXDO FRYH
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of demand-led healthcare initiative that
Delivery in the Subcontinent
meets their immediate hospitalisation Who is covered under PMJAY
To address these gaps, last year needs in a cashless manner. The PMJAY has been rolled out for
Government of India launched objectives of PMJAY are to reduce the bottom 40 per cent of poor and
Ayushman Bharat which is a two- catastrophic out-of-pocket health vulnerable population. In absolute
pronged approach towards universal expenditure, improve access to quality numbers, this is close to 10.74 crore
healthcare. The first is Health and healthcare and meet the unmet needs (100.74 million) households. The
Wellness Centres (HWCs) which of the population for hospitalisation inclusion of households is based on the
will provide Comprehensive Primary care. The scheme was launched on deprivation and occupational criteria
Health Care, covering maternal and 23rd September last year by the Prime of the Socio-Economic Caste Census
child health services, screening for non- Minister in Ranchi, Jharkhand. 2011 (SECC) for rural and urban
communicable diseases, free essential areas, respectively. This number also
drugs and follow-up of hospitalisation Thus, Ayushman Bharat represents
includes families that were covered in
cases. 150,000 HWCs will be set up by a significant transition from a sectoral, the RSBY but were not present in the
2022 and will be able to handle more segmented approach to comprehensive, SECC database.
than 70 per cent of all outpatient care holistic approach bringing together
including non-communicable diseases preventive, promotive, curative, The SECC involves ranking of
and mental illnesses. The centre will rehabilitative aspects of care along a the households based on their socio-
also conduct yoga sessions to promote
wellness and have a much wider range Last year Government of India launched Ayushman Bharat which is a
of free drugs and diagnostics, including
many that need to be prescribed but two-pronged approach towards universal healthcare. The first is Health
can be made available locally by the and Wellness Centres (HWCs).... The second is Pradhan Mantri Jan
health workers. Arogya Yojana (PMJAY), the world’s largest fully government-funded
The second is Pradhan Mantri health insurance scheme....
Jan Arogya Yojana (PMJAY), the

economic status. It uses exclusion
ϭϳ dƌƌƵƐƚDŽĚĞ
and inclusion criteria and accordingly
decides on the automatically included Ϭϲ D
DŝǆĞĚDŽĚĞ
and automatically excluded households.
Rural households which are included Ϭϵ /Ŷ
ŶƐƵƌĂŶĐĞDŽ
ŽĚĞ
(not excluded) are then ranked based
Ϭϰ D
DŽhǇĞƚƚŽď
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tŝƚŚĚƌĂǁŶ
on their status of seven deprivation
criteria (D1 to D7). Urban households
are categorised based on occupation
categories.
In line with the approach of the
Government to use the SECC database
for social welfare schemes, PMJAY
also identifies targeted beneficiary
families through this data.
Rural Beneficiaries – Out of the Financ cing of the Schem me

Conductor/ Helper to drivers and of INR 5,00,000 are on a family

total seven deprivation criteria for 30-$< <EHLQJDFHQWUDOO\VSR
conductors/ RQVRUHGVFK
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get treatment for those medical
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manual casual labour flexibility
to use their own database
for PMJAY. However, they will need any eligible beneficiary can visit
Urban Beneficiaries – For urban to ensure that all the families eligible any empanelled hospital across
areas, the following 11 occupational based on the SECC database are also the country and receive cashless
categories of workers are eligible for covered. treatment.
the scheme:
l Ragpicker
Key Features of PMJAY 5. 1,393 secondary and tertiary
treatment packages covering 23
l Beggar 1. PMJAY provides cashless cover specialties are offered. PMJAY has
l Domestic worker
of up to INR 5,00,000 to each also made provision for unspecified
eligible family per annum for surgical package to cover treatment
l Street vendor/ Cobbler/hawker / listed secondary and tertiary care for ailments that are not in the list
other service provider working on conditions. The cover under the of surgical packages. However,
streets scheme includes all the expenses mandatory pre-authorisation
l Construction worker/ Plumber/ incurred from diagnostic and approval is required to book a
Mason/ Labour/ Painter/ Welder/ laboratory investigations, full patient under this package.
Security guard/ Coolie and other treatment, non-intensive and
head-load worker intensive care services, medicine Implementation Model: A Bulwark
l Sweeper/ Sanitation worker/ and medical consumables and of Cooperative Federalism
Mali post-hospitalization follow-up care Considering the fact that States
l Home-based worker/Artisan/
up to 15 days. are at different levels of preparedness
Handicrafts worker/ Tailor 2. There is no cap on family size and have varying capacity to manage
l Tr a n s p o r t w o r k e r / D r i v e r / and age of members. The benefits such schemes, PMJAY provides them

with the flexibility to choose their number of members under half of the empanelled healthcare
implementation model, which can PMJAY in that family, is paid providers are private. Nearly 64 per
be through Insurance, Trust (through to the State Government which cent of treatment is being given by the
a trust/society), or Mixed (partly in turn pays this to the insurer private hospitals.
through insurance and partly through based on the number of eligible
In the long run, the PMJAY,
assurance). families.
through its system of incentives,
Insurance Mode–The State 2. Assurance model – Central share aims to expand the availability of
Government appoints an insurer at a of the contribution is paid based services. With greater demand, the
defined premium rate for taking over on the actual cost of claims or the private sector is likely to expand in
the financial risk of the beneficiaries. ceiling whichever is lower. If the the unserved areas of Tier-2 and Tier-3
Nine States have chosen the Insurance State is using an Implementation cities. For public hospitals, PMJAY
mode. Support Agency, then cost of ISA, will provide an incentive to prioritise
determined through tender, is also poor patients and shall provide means
Trust Mode–The State Government shared between Centre and State. to generate additional revenue for
creates an agency (State Health strengthening their infrastructure and
Agency) which will pay the claims of Reflections on the 2019-20 Budget
fill their service gaps. PMJAY will
the hospitals as per actual utilisation. also establish national standards for a
Ayushman Bharat represents
The risk of health protection lies with health assurance system.
the priority accorded to health by
the State. 17 States are implementing
the Government of India flowing While it is still premature to
the scheme in the trust mode.
from the highest level and the will comment on the future success of
Mixed Mode – The State uses a to mainstream health of the citizens Ayushman Bharat, the initial results
combination of Insurance and Trust and link it to their economic growth are promising. It is surely a giant leap
modes generally where low cost and development of the country. This forward towards the achievement of
common procedures (secondary care) is reflected in the 2019-20 budget the Sustainable Development Goals
is managed by the insurer and high cost with a Rs. 6,400 crore allocation for especially SDG 3.8, that is, achieving
specialised procedures managed by the PMJAY, up from Rs. 2,400 crore in Universal Health Coverage.
State trust. Six States have chosen the 2018-2019, the year of its launch.
Mixed mode. The outlay for overall health sector at In doing so, India will not only be
Rs. 62,659 crore, the highest in the last able to save millions of lives and avoid
Financing of the Scheme two financial years, marked an increase millions of households from slipping
of around 19 per cent over the 2018-19 into poverty due to catastrophic illness
PMJAY, being a centrally sponsored
scheme is fully funded from the fiscal when the health allocation was but will also further strengthen the
Rs. 52,800 crore. virtuous cycle of better health and
Consolidated Fund of India and the faster economic growth.
budget allocated is received from The healthcare allocation is
Government of India as recurring reflective of the commitment of References
grant-in-aid. Under the Union Budget, the Government towards not just 1 Source: UN Inter-agency Group
the allocation for PMJAY for 2019-20 improving the health outcomes but also for Child Mortality Estimation
is Rs. 6400 crore. investing in creating a large, equitable, (UNICEF, WHO, World Bank, UN DESA
The expenditure under PMJAY is affordable and accessible ecosystem Population Division) at childmortality.
providing high quality services across org
shared between Central Government and
State Governments/Union Territories the continuum of care. 2 NFHS-1
as per the sharing instructions issued by PMJAY embodies a policy shift 3 NFHS-4
the Ministry of Finance in vogue. The where the Government now assumes
existing sharing ratio is as under: 4 Source: UN Inter-agency Group
the role of a ‘purchaser’ of services for Child Mortality Estimation
l For North Eastern and 3 Himalayan from that of ‘provider’. With this (UNICEF, WHO, World Bank, UN DESA
States: 90 (Centre): 10 (States) shift, the Government is improving the Population Division) at childmortality.
access of poor people to health services. org
l For Union Territories with Thus, PMJAY will expand the role of
Legislation and Other States: 60 5 Maternal and Adolescent Healthcare;
the private sector delivery of healthcare
(Centre): 40 (States) P-25; Annual Report of Department of
services without undermining the
Health and Family Welfare 2017-18
l For Union Territories without criticality of the role and responsibility
Legislation: 100 (Centre) of the Government in creating and 6 Destitute/ living on alms, manual
facilitating delivery of healthcare scavenger households, primitive
Payment of Central Share services across the continuum of care tribal group, legally released bonded
1. Insurance model – A flat premium as is seen in the HWCs. The results labour q
per family, irrespective of the show that the policy is working. About (E-mail: i.bhushan@gov.in)

YE-1187/2019

Vibrant Economy
thrust
‘blue sky thinking’ blueprint for India@$5trillion

Krishnamurthy V Subramanian,
Surbhi Jain
e are, today, at a crucial The cover design captures the idea of
complementary inter-linkages between Investment, especially private
W
juncture in history as this
year marks the 150th these macroeconomic variables using investment, is the “key driver” that
birth anniversary of the pictorial description of several drives demand, creates capacity,
Mahatma Gandhi, the inter-linked gears. increases labour productivity,
‘Father of the Nation’.
By freeing India from British Rule, he
International experience, especially introduces new technology, allows
laid the foundation for an independent
from high-growth East Asian creative destruction, and generates
economies, suggests that sustained
India. We now have an immense jobs. This is another departure
high rate of growth needs a catalytic
opportunity to give shape to a golden
“virtuous cycle” of savings, investment from traditional economic thinking
‘New India’ (#India75). The Prime based on consumption-led economic
and exports supported by a favourable
Minister has outlined the vision of
making India a US$ 5 trillion economy
demographic phase. Investment, growth.
especially private investment, is the
by 2024-25 (#Economy@5trillion).
“key driver” that drives demand, creates spiritual heritage, social norms play
Economic Survey 2018-19 has
capacity, increases labour productivity, a very important role in shaping our
consciously adopted the theme of
introduces new technology, allows behaviour. Behavioural economics
empowering the economy and its
creative destruction, and generates provides the necessary tools and
citizens to enable realising this vision. principles to not only understand
jobs. This is another departure from
The Survey employs unfettered, how norms affect behaviour but
traditional economic thinking based on
“blue sky” thinking to evolve the also to utilize these norms to effect
consumption-led economic growth.
appropriate economic model for India behavioural change. An ambitious
along with the tactical tools to stay on After laying out this strategic agenda can be aspired for behavioural
the path of the strategic blueprint. It blueprint for fulfilling the vision of change by applying the principles of
also lays down a blueprint to enable #Economy@5trillion, the Survey behavioural economics to several
a “shifting of gears” through the describes some of the tactical devices issues including gender equality, a
‘virtuous cycle of growth’ to sustain required to navigate an uncertain healthy and beautiful India, savings,
a real GDP growth rate of 8 per cent. world in constant disequilibrium. The tax compliance and credit quality.
This endeavour is reflected in the sky Survey attempts to examine policy
nudges at micro-level to integrate The Survey also focuses on
blue cover of the Survey and the cover
nourishing MSMEs to create jobs and
design depicting several inter-linked into desirable outcomes at the macro
become more productive so that they
gears. level and facilitate creation of a self-
can become internationally competitive.
sustaining virtuous cycle which spurs
The Survey departs from traditional It presents evidence that while firms
investment and thereby growth.
thinking by viewing the economy as with less than 100 workers, despite
being either in a virtuous or a vicious The Survey delineates the impact being more than ten years old, account
cycle, and thus never in equilibrium. created by Government’s flagship for more than half of all organised firms
Another significant departure is initiatives such as Swachh Bharat in manufacturing by number, their
that it views the national priorities Mission (SBM), Jan Dhan Yojana contribution to employment is only 14
of fostering economic growth, and the Beti Bachao Beti Padhao, per cent and to productivity is a mere 8
demand, exports and job creation as which provide testimony to the per cent. In contrast, large firms (more
complementary to each other rather potential for behavioural change in than 100 employees) account for three-
than viewing as operating in ‘silos’. India. Given our rich cultural and quarters of such employment and close
Krishnamurthy V Subramanian is Chief Economic Adviser, Government of India. Surbhi Jain is Director, Department of Economic
Affairs, Ministry of Finance, Government of India.

QHZWHFKQRORJ\DOORZVFUHDWLYHGHVWUXFWLRQDQGJHQHUDWHVMREV7KLVLVDQRWKHUGHSDUWXUH
WUDGLWLRQDOHFRQRPLFWKLQNLQJEDVHGRQFRQVXPSWLRQOHGHFRQRPLFJURZWK

to 90 per cent of productivity despite
accounting for about 15 per cent by
number. It is, therefore, imperative
that MSMEs are facilitated to grow in
size and that all size-based incentives
must have a sunset clause of less
than ten years with necessary grand-
fathering. Further, deregulating labour
law restrictions can create significantly
more jobs, as seen by the recent
changes in Rajasthan when compared
to the rest of the states.
Heading into a century where
data has become the new oil and
analytics from data the new tool
for decision making, the Survey
foresees countless opportunities in
creating data as a public good “of Figure 1: The ‘virtuous cycle’ of growth
the people, for the people and by the )LJXUH7KHµYLUWXRXVF\FOH¶RIJURZWK
people”. Governments already hold system, this may well be the best as a whole will enjoy the “demographic
a rich repository of administrative, investment India can make. dividend” phase, some states will start
survey, institutional and$IWHU OD\LQJ RXW Economic
transactions WKLV VWUDWHJLF EOXHSULQW
policy IRU IXOILOOLQJ
uncertainty WKH to
transitioning YLVLRQ RIsociety
an ageing #Economy@5trillion
by the
data about citizens, but these data c o r r e l a t e s s t r o n g l y w i t h t h e 2030s. The southern states, Himachal
are scattered across 6XUYH\GHVFULEHVVRPHRIWKHWDFWLFDOGHYLFHVUHTXLUHGWRQDYLJDWHDQXQFHUWDLQZRUOGLQFRQ
numerous macroeconomic environment, business Pradesh, Punjab, West Bengal and
government bodies. Utilizing the conditions and other economic variables Maharashtra now have fertility rates
GLVHTXLOLEULXP 7KH 6XUYH\ DWWHPSWV WR H[DPLQH SROLF\ QXGJHV DW PLFUROHYHO WR LQWHJUDWH
information embedded in these distinct that affect investment. Surges in well below the replacement rate. The
national Total Fertility Rate (TFR)
GHVLUDEOHRXWFRPHVDWWKH
datasets would, inter alia, enable the economic policy PDFUROHYHODQGIDFLOLWDWHFUHDWLRQRIDVHOIVXVWDLQLQJYLUWXRXVF
uncertainty increase is expected to be below replacement
Government to enhance ease of living the systematic risk, and thereby the
ZKLFKVSXUVLQYHVWPHQWDQGWKHUHE\JURZWK
for citizens, enable truly evidence- cost of capital in the economy which level by 2021. The age distribution,
however, implies that India’s working-
based policy, improve targeting in may lower investment. Unlike generic

welfare schemes, integrate fragmented economic uncertainty, which cannot be
age population will grow by roughly
97 lakh per year during 2021-31 and
7KH6XUYH\GHOLQHDWHVWKHLPSDFWFUHDWHGE\*RYHUQPHQW¶VIODJVKLSLQLWLDWLYHVVXFKDV6Z
markets, bring greater accountability controlled, policymakers can reduce 42 lakh per year in 2031-41. Meanwhile,
in public services and generate greater economic policy uncertainty to foster
the proportion of elementary school-
citizen participation in %KDUDW 0LVVLRQ 6%0investment
-DQ 'KDQ <RMDQD DQG WKH
going%HWL %DFKDRi.e., %HWL 3DGKDR
group ZKLFK SUR
governance. a salutary climate in the children, 5-14 age
The Survey recognizes country. will witness significant declines. Many
WHVWLPRQ\WRWKHSRWHQWLDOIRUEHKDYLRXUDOFKDQJHLQ,QGLD*LYHQRXUULFKFXOWXUDODQGVSLU
that the
single biggest constraint to ease of India is set to witness a sharp states, therefore, need to pay greater
KHULWDJH
doing business in India is the ability VRFLDO QRUPVinSOD\
to slowdown D YHU\
population LPSRUWDQW
growth in the UROH LQ to
attention VKDSLQJ RXU EHKDYLRXU %HKDYL
consolidating/merging
enforce contracts and resolve disputes. next two decades. Although the country schools to make them viable rather
This is not surprising HFRQRPLFVSURYLGHVWKHQHFHVVDU\WRROVDQGSULQFLSOHVWRQRWRQO\XQGHUVWDQGKRZQRUPVD
given the 3.5 than building new ones. At the other
end of the age scale, policymakers need
crore cases pending inEHKDYLRXUEXWDOVRWRXWLOL]HWKHVHQRUPVWRHIIHFWEHKDYLRXUDOFKDQJH$QDPELWLRXVDJHQGD
the judicial The importance of ALP-enabled to prepare for ageing. This will need
system. A case clearance rate of 100
MGNREGS in alleviating distress
EHDVSLUHGIRUEHKDYLRXUDOFKDQJHE\DSSO\LQJWKHSULQFLSOHVRIEHKDYLRXUDOHFRQRPLFVWRVH
per cent (i.e., zero accumulation) investments in healthcare as well as a
can be achieved with the addition is particularly pronounced for the plan for increasing the retirement age
of merely 2,279 judgesLVVXHV
in the LQFOXGLQJ
lower JHQGHU
vulnerableHTXDOLW\ D KHDOWK\
sections of society, DQGinEHDXWLIXO ,QGLD VDYLQJV WD[ FRPSOLDQFH
a phased manner.
courts and 93 in High Courts even including women, persons with
FUHGLWTXDOLW\ SBM has been hugely successful
without efficiency gains. This is disability, Scheduled Castes and as 99.2 per cent of rural India has
already within sanctioned strength and been covered in the last four years.
only needs filling vacancies. Scenario Scheduled Tribes. As data on
It has significantly improved health
analysis of efficiency gains needed to demand for work under MGNREGS outcomes by helping reduce diarrhoea
clear the backlog in five years suggests is available almost real-time, it and malaria among children below five
that the required productivity gains can be developed into a real-time years, still birth and low birth weight
are ambitious, but achievable. Given
measure to track distress at the (new born with weight less than 2.5 kg).
the potential economic and social This effect is particularly pronounced
multipliers of a well-functioning legal level of a district/panchayat. in districts where IHHL coverage was

lower in 2015. Financial savings from
The Survey recognises that the society is reflected in the individual and the
a household toilet exceed the financial
costs to the household by 1.7 times, dynamism of the economy is reflected in each economic unit. It, therefore,
on average and 2.4 times for poorest appreciates the role of policy nudges in influencing
households. As sanitation gained the behaviour of an individual to achieve optimal outcomes and
over the last four years contributes ease of doing business at the micro level to lend vibrancy
to Sustainable Development Goals to economic growth at macro level.
(SDGs), especially the SDG 6.2, the
momentum must be sustained to make
Aadhaar and Mobile (JAM) trinity to unskilled workers across various states.
cleanliness an integral part of India’s
credit wages directly into MGNREGS Despite its complex structure and
consciousness.
workers’ bank accounts, thereby proliferation of scheduled employments
Energy is vital for development reducing scope for delays in payment. over time, the Minimum Wages Act,
and prosperity of any economy. India, Post DBT payment delays in the 1948 does not cover all wage workers.
however, lags behind significantly in payment of wages, under MGNREGS, One in every three wage workers in
energy usage: despite accounting for has reduced significantly thereby India has fallen through the crack and
18 per cent of world’s population, providing livelihood security to people is not protected by the minimum wage
India uses only around 6 per cent of in distress. Both demand and supply law. A chapter in the Economic Survey
the world’s primary energy. Energy of work under MGNREGS increased, reviews the situation pertaining to
poverty has been more pervasive in especially in districts suffering from minimum wages in India and suggests
India than income poverty: 53 per distress. The increase in the number the way forward for rationalising and
cent of our population could not of filled muster rolls also implies that streamlining the policy for minimum
access clean cooking in 2017 when distressed workers indeed turn up more wages.
compared to 30 per cent for China, frequently for work. The importance
4 per cent for Brazil and less than 1 per of ALP-enabled MGNREGS in To demystify the Survey and
cent for Malaysia. With an increase of alleviating distress is particularly enable common people to access
per capita energy consumption by 2.5 pronounced for the vulnerable sections the ideas in it, the presentation of
times, India will be able to increase of society, including women, persons the Survey has important changes.
its real per capita GDP by US$ 5000 with disability, Scheduled Castes Every chapter has an abstract and a
(in 2010 prices). Additionally, if India and Scheduled Tribes. As data on “chapter at a glance” which enable
has to reach the HDI level of 0.8, it demand for work under MGNREGS the reader to capture the gist of the
has to increase its per capita energy is available almost real-time, it can be chapter. Furthermore, these have been
consumption by 4 times. India’s developed into a real-time measure to supplemented with short, two-minute
emphasis on energy efficiency over track distress at the level of a district/ videos on each chapter where the
the decades has helped significantly panchayat. The successful redesign of main idea of the chapter is explained.
in serving the country’s energy needs. MGNREGS highlights that skilful use The videos have been constructed
While the share of renewables in of technology, when combined with an bought in English and in Hindi to
total generation has increased from unwavering commitment to monitoring enable maximum number of readers
6 per cent in 2014-15 to 10 per cent in effectiveness of government schemes, to understand the Survey.
2018-19, India still needs investment can make a substantial difference on
in renewable energy of more than US$ the ground. The Survey recognises that the
250 billion over the next decade. As society is reflected in the individual
Despite India’s outstanding growth and the dynamism of the economy
electric vehicles represent the next
in the last two decades, low pay is reflected in each economic unit.
generation in sustainable mobility,
and wage inequality remain serious
access to fast charging facilities must It, therefore, appreciates the role
obstacles towards achieving inclusive
be fostered to increase the market of policy nudges in influencing the
growth. An effective minimum wage
share of electric vehicles. behaviour of an individual to achieve
policy that targets the vulnerable
optimal outcomes and ease of doing
While MGNREGS was made bottom rung of wage earners can
business at the micro level to lend
effective from 2006, the streamlining help in driving up aggregate demand
vibrancy to economic growth at
of the programme occurred in 2015 and building and strengthening the
middle class, and thus spur a phase macro level. It exhorts every citizen
when the Government harnessed the
to adopt an unfettered approach to
benefits of technology. This, inter alia, of sustainable and inclusive growth.
However, the present minimum wage issues and find solutions to achieve
included the implementation of Direct
the vision of #India@75 and
Benefit Transfer (DBT) and linking system in India is extremely complex
it with Aadhaar linked Payments with 1,915 minimum wages defined for #Economy@5trillion. q
(ALP). It leveraged the Jan Dhan, various scheduled job categories for (E-mail: cea@nic.in)

YE-1191/2019

FM SpeaKS...
“ In India’s growth story, particularly in the rural
economy, ‘grameen arth vyavastha’ the role of women is
a very sweet story. This Government wishes to encourage
”
and facilitate this role of women.
“ We do not look down upon legitimate profit-earning.

Gone are the days of policy paralysis and license-quota-
control regimes. India Inc. are India’s Job-creators. They
are the nation’s wealth-creators. Together, with mutual
trust, we can gain, catalyze fast and attain sustained
”
national growth.
“ The Government of India has decided to extend the

pension benefit to about three crore retail traders & small
shopkeepers whose annual turnover is less than 1.5 crore
under a new Scheme namely Pradhan Mantri Karam
Yogi Maandhan Scheme. Enrolment into the Scheme
will be kept simple requiring only Aadhaar and a bank
”
account and rest will be on self-declaration.
“ The Stand Up India Scheme has made human

dignity and self-esteem go up. “Kayakave Kailasa”. The
Ministry of Petroleum & Natural Gas has enabled SC/
ST entrepreneurs in providing Bulk LPG Transportation.
In a matter of two years over 300 entrepreneurs have
emerged. Machines and robots have been deployed to
do scavenging which also saved the manual scavengers
”
their dignity.
“ To take connectivity infrastructure to the next level, we will build on the successful model in ensuring
power connectivity - One Nation, One Grid. I propose to make available a blueprint this year for developing
”
gas grids, water grids, i-ways, and regional airports.
“ I propose to initiate steps to create an electronic fund raising platform - a social stock exchange - under
the regulatory ambit of SEBI for listing social enterprises and voluntary organizations working for social
”
welfare objective so that they can raise capital as equity, debt or as units like a mutual fund.
“ Large public infrastructure can be built on land parcels held by Central Ministries and CPSEs. Through
innovative instruments such as joint development and concession, public infrastructure and affordable
”
housing will be taken up.
Source:www.pib.nic.in and
unionbudget.gov.in

Some highlights of Union Budget 2019-20
10-point Vision for the decade
l Building Team India with Jan Bhagidari: Minimum Government Maximum Governance.
l Achieving green Mother Earth and Blue Skies through a pollution-free India.

l Making Digital India reach every sector of the economy.
l Launching Gaganyan, Chandrayan, other Space and Satellite programmes.
l Building physical and social infrastructure.
l Water, water management, clean rivers.
l Blue Economy.
l Self-sufficiency and export of food-grains, pulses, oilseeds, fruits and vegetables.
l Achieving a healthy society via Ayushman Bharat, well-nourished women & children, safety of citizens.
l Emphasis on MSMEs, Start-ups, defence manufacturing, automobiles, electronics, fabs and batteries, and medical
devices under Make in India.
Towards a 5 Trillion Dollar Economy
l Indian economy to become a 3 trillion dollar economy in the current year.
l Government aspires to make India a 5 trillion dollar economy.
l Need for investment in:
 Infrastructure.
 Digital economy.
 Job creation in small and medium firms.
l Initiatives to be proposed for kick-starting the virtuous cycle of investments.
l Common man’s life changed through MUDRA loans for ease of doing business.
Measures related to MSMEs
l Pradhan Mantri Karam Yogi Maandhan Scheme
l Pension benefits to about three crore retail traders & small shopkeepers with annual turnover less than Rs. 1.5
crore.
l Enrolment to be kept simple, requiring only Aadhaar, bank account and a self-declaration.
l Rs. 350 crore allocated for FY 2019-20 for 2 per cent interest subvention (on fresh or incremental loans) to all
GST-registered MSMEs, under the Interest Subvention Scheme for MSMEs.
l Payment platform for MSMEs to be created to enable filing of bills and payment thereof, to eliminate delays in
government payments.
Social stock exchange:
l Electronic fund raising platform under the regulatory ambit of SEBI.

l Listing social enterprises and voluntary organizations.
l To raise capital as equity, debt or as units like a mutual fund.
l SEBI to consider raising the threshold for minimum public shareholding in the listed companies from 25 per cent
to 35 per cent.
l Know Your Customer (KYC) norms for Foreign Portfolio Investors to be made more investor friendly.
l Government to supplement efforts by RBI to get retail investors to invest in government treasury bills and securities,
with further institutional development using stock exchanges.
Measures to make India a more attractive FDI destination:
l FDI in sectors like aviation, media (animation, AVGC) and insurance sectors can be opened further after multi-
stakeholder examination.
l Insurance Intermediaries to get 100 per cent FDI.
l Local sourcing norms to be eased for FDI in Single Brand Retail sector.
l Government to organize an annual Global Investors Meet in India, using National Infrastructure Investment
Fund (NIIF) as an anchor to get all three sets of global players (pension, insurance and sovereign wealth
funds).
l Statutory limit for FPI investment in a company is proposed to be increased from 24 per cent to sectoral foreign
investment limit. Option to be given to the concerned corporate to limit it to a lower threshold.
l FPIs to be permitted to subscribe to listed debt securities issued by ReITs and InvITs.
l NRI-Portfolio Investment Scheme Route is proposed to be merged with the Foreign Portfolio Investment
Route.
l Cumulative resources garnered through new financial instruments like Infrastructure Investment Trusts
(InvITs), Real Estate Investment Trusts (REITs) as well as models like Toll-Operate-Transfer (ToT) exceed
Rs. 24,000 crore.
Tax Simplification and Ease of living - making compliance easier by leveraging technology:
l Interchangeability of PAN and Aadhaar
 Those who don’t have PAN can file tax returns using Aadhaar.
 Aadhaar can be used wherever PAN is required.
l Pre-filling of Income-tax Returns for faster, more accurate tax returns
 Pre-filled tax returns with details of several incomes and deductions to be made available.
 Information to be collected from Banks, Stock exchanges, mutual funds etc.
l Faceless e-assessment
 Faceless e-assessment with no human interface to be launched.
 To be carried out initially in cases requiring verification of certain specified transactions or discrepancies.

Ease of Living
l About 30 lakh workers joined the Pradhan Mantri Shram Yogi Maandhan Scheme that provides Rs. 3,000 per
month as pension on attaining the age of 60 to workers in unorganized and informal sectors.
l Approximately 35 crore LED bulbs distributed under UJALA Yojana leading to cost saving of Rs. 18,341 crore
annually.
l Solar stoves and battery chargers to be promoted using the approach of LED bulbs mission.
l A massive program of railway station modernization to be launched.
Naari Tu Narayani/Women
l Approach shift from women-centric-policy making to women-led initiatives and movements.
l A Committee proposed with Government and private stakeholders for moving forward on Gender budgeting.
l SHG:
 Women SHG interest subvention program proposed to be expanded to all districts.
 Overdraft of Rs. 5,000 to be allowed for every verified women SHG member having a Jan Dhan Bank
Account.
 One woman per SHG to be eligible for a loan up to Rs. 1 lakh under MUDRA Scheme.
India’s Soft Power

l Proposal to consider issuing Aadhaar Card for NRIs with Indian Passports on their arrival without waiting for 180
days.
l Mission to integrate traditional artisans with global markets proposed, with necessary patents and geographical
indicators.
l 18 new Indian diplomatic Missions in Africa approved in March, 2018, out of which 5 already opened. Another
4 new Embassies intended in 2019-20.
l Revamp of Indian Development Assistance Scheme (IDEAS) proposed.
l 17 iconic Tourism Sites being developed into model world class tourist destinations.
l Present digital repository aimed at preserving rich tribal cultural heritage, to be strengthened.
Digital Payments
l TDS of 2 per cent on cash withdrawal exceeding Rs. 1 crore in a year from a bank account.
l Business establishments with annual turnover more than Rs. 50 crore shall offer low cost digital modes of
payment to their customers and no charges or Merchant Discount Rate shall be imposed on customers as well
as merchants.
Mega Investment in Sunrise and Advanced Technology Areas

l Scheme to invite global companies to set up mega-manufacturing plants in areas such as Semi-conductor
Fabrication (FAB), Solar Photo Voltaic cells, Lithium storage batteries, Computer Servers, Laptops, etc.
 Investment linked income tax exemptions to be provided along with indirect tax benefits.
Source:pib

resources for women
Analysis
Spearheading Women Empowerment

Shahin Razi, Naushin Razi
“There is no chance for the welfare of the world unless the condition of women is improved. It is not possible for a bird
to fly with one wing.”
- Swami Vivekananda
ari Tu Narayani” (All Highlighting gains in women’s political participation in terms of voter
women are Goddesses)
N
“
has been the tradition turnout in the recent general election and number of women in the
of this country. With Parliament, the Finance Minister emphasised the shift in the Government’s
these words, the Union approach from women-centric to Women-led Initiatives (“Naari tu Narayani”).
Finance Minister made a
push for women empowerment in the over decision-making in the home, Minister, who spearheaded GRB in
Budget 2019-20. community, society and nation and to 2003-04 as a member of the National
gain “power”. Commission for Women.
Empowerment is a multi-faceted,
multi-dimensional and multi-layered The Union Budget 2019-20 is the In several countries across the
concept. Women empowerment is a 15 th Budget to incorporate Gender world, GRB is considered a powerful
process in which women gain greater Responsive Budgeting (GRB) since fiscal tool to back efforts towards gender
share of control over resources – its adoption by India in 2005-06. GRB equality with financial commitments.
material, human and intellectual, assumes particular significance this GRB is not just about resource
like knowledge information, ideas year as the maiden budget of Modi allocation for women’s programmes
and financial resources like money government 2.0 has been presented by but the application of a gender lens to
– and access to money and control India’s first full-time female Finance the entire budgetary exercise, keeping
Dr. Shahin Razi is a U.G.C. Emeritus Fellow, economist and an academician. Ms. Naushin Razi is a Management Consultant and Social
Activist.

in view the different needs of women
and men.
Overall, the Gender Budget
Allocation for 2019-20 is
Rs. 131,699.58 crores – an increase
from Rs. 121,961.32 crore in 2018-
19, remaining close to 5 per cent as
a proportion of total expenditure. To
say anything meaningful regarding
the adequacy of the allocation would
require an in-depth analysis of the
utilisation of the current allocation. A
positive development in the Interim
Union Budget 2019-20 was that
information on actual spend was
introduced in the Gender Budget
Statement. This is in line with the
practice already followed for the rest
of the Budget – a good beginning for
monitoring of the gender component.
The Finance Minister has proposed to
form a broad-based Committee with
Government and private stakeholders
to evaluate GRB and suggest actions
for moving forward. The Union Budget set aside more (PMMVY), a maternity benefit
than Rs. 29,000 crore for the Women programme, was more than doubled
Highlighting gains in women’s and Child Development (WCD) to Rs. 2,500 crore from Rs. 1,200
political participation in terms of voter Ministry for the next fiscal, a 17 crore. Under the programme, Rs. 6,000
turnout in the recent general election per cent increase over the 2018-19 crore is given to pregnant women and
and number of women in the Parliament, financial year, as part of a boost for the lactating mothers for the birth of the
the Finance Minister emphasised the social services. first living child.
shift in the Government’s approach
from women-centric to Women-led The total amount allocated for The allocation for the Child
Initiatives (“Naari tu Narayani”). the sector, which includes nutrition Protection Services progamme under
Quoting Swami Vivekananda on the and social security and welfare was the Integrated Child Development
importance of women’s welfare for the increased from Rs. 2,551 crore in Services was increased to Rs. 1,500
world, Finance Minister Ms. Nirmala 2018-19 to Rs. 4,178 crore in the fiscal crore from Rs. 925 crore.
Sitharaman put forth the government’s 2019-20.
belief that we can progress with A sum of Rs. 29,164.90 crore has
T h e C e n t r e ’s p r o g r a m m e s been earmarked for the WCD ministry
greater women’s participation. She of Maternity Benefit and Child
further said that the role of women for the next financial year, a 17 per
Protection Services also got a major cent increase over Rs. 24,758.62 crore
in India’s growth story, particularly boost in the Budget.
in the rural economy, is a very sweet allocated to it last year. A major chunk
story and that the government wishes The allocation for the Pradhan – Rs. 19,834.37 crore, is earmarked
to facilitate and encourage this role. Mantri Matru Vandana Yojana for Anganwadi Services. This will
The Economic Survey 2018-19, too, give further impetus to women-led
presents an interesting approach to development.
If India is to decidedly transform
women’s economic empowerment:
drawing inspiration from the gender equation, women’s The project ‘Beti Bachao, Beti
Padhao’ will get Rs. 280 crore in the
Nobel Laureate Richard Thaler’s nudge issues will need to form a core current financial year.
theory and the successful behavioural part of the national policy
change effected by the Swachh Bharat The National Nutrition Mission,
Mission and Beti Bachao, Beti Padhao
agenda and a bold campaign which strives to reduce the level of
campaigns, the Survey coins the should be formulated and stunting, under-nutrition, anaemia
slogan of BALDAV (Beti Aapki Dhan launched at the scale of recent and low-birth weight babies and aims
Lakshmi Aur Vijayalakshmi) to inter successful initiatives, such as to benefit 10 crore people across
alia enhance the contribution of women the country, was allocated Rs. 3,400
in the workforce and economy. Swachh Bharat. crore.

The allocation for the Mahila victims, has been increased from Stand-up India for female
Shakti Kendras has been increased Rs. 20 crore to Rs. 30 crore. entrepreneurship, Ujjwala for smokeless
from Rs. 115 crore to Rs. 150 crore. kitchens, and the Swachh Bharat
Similarly, the budget for widow’s Mission for protecting the dignity of
The total allocation for the centrally homes was increased from Rs. 8 crore women. A few new measures to support
sponsored schemes was Rs. 28,914 to Rs. 15 crore. women Self-Help Groups (SHGs)
crore, upto Rs. 4,400 crore from the were presented, such as expanding the
Making a push for women
last fiscal. interest subvention programme to all
empowerment, the Finance Minister,
The allocation for the National proposed to strengthen Self-Help districts. These are important ongoing
Creche Scheme was also enhanced Groups (SHG), by allowing every initiatives that have benefitted women
member an overdraft of Rs. 5,000 on in recent years.
from Rs. 30 crore to Rs. 50 crore, to
enable working women leaving their her Jan Dhan account, and a loan of
If India is to decidedly transform the
children in crèches while they are away upto Rs. 1 lakh for one woman per SHG
gender equation, women’s issues will
at work. under the MUDRA scheme. About
need to form a core part of the national
70 per cent of MUDRA beneficiaries
policy agenda and a bold campaign
Similarly, the allocation for are women.
should be formulated and launched at
Working Women’s Hostel scheme the scale of recent successful initiatives,
saw an increase of over three times The government proposes to expand
the Interest Subvention Scheme – such as Swachh Bharat.
from Rs. 52 crore to Rs. 165 crore.
allowed to women SHGs to avail credit
Road to development cannot be
On the issue of providing safety for to all districts.
travelled without the health, education
all women, the budget for Ujjawala, a Mentioning how Ujjwala and and empowerment of women who
scheme for prevention of trafficking, Saubhagya Yojanas have made form almost 50 per cent of the Indian
rescue and rehabilitation of the women’s lilfe easier, she mentioned population. A multi-directional
that 7 crore LPG connections have o rg a n i s e d a p p r o a c h t o w o m e n
Making a push for women been made and by 2022, “every rural development is sure to take the country
empowerment, the Finance family, except those unwilling to take way beyond this path. And in India
the connection, will have electricity the forces are marching in the right
Minister proposed to strengthen and clean cooking facility.” direction to take the nation to new
Self-Help Groups (SHG), by Effectively, the total budget
horizons.
allowing every member an under the Mission for Protection References
overdraft of Rs. 5,000 on her Jan and Empowerment of Women was 1. G u l a t i , N a l i n i – Wo m e n - l e d
increased from Rs. 1,148 crore to
Dhan account, and a loan of upto initiatives
Rs. 1,315 crore. 2. Different Newspapers q
Rs. 1 lakh for one woman per SHG
However, the budget speech did (Email: shahin.razi@gmail.com
under the MUDRA scheme. not go much beyond Mudra loans and naushin.razi-1@gmail.com)

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Long-term projects
Priorities
Transport Infrastructure and Connectivity

G Raghuram
hile presenting the Union having higher volumes of traffic. It
Budget 2019-20, the also brought in State involvement in Like Bharatmala, Sagarmala is
W Union Finance Minister

said that connectivity is the
lifeblood of an economy.
She stated that the
the maintenance of roads. The Phase 3
of PMGSY has now been announced
to upgrade 1.25 lakh kms of roads at
an estimated cost of Rs. 80,250 crore.
an integrated garland of projects
along India’s coastline. Apart from
facilitating exports and imports,
Government has given a massive push Digital technology is being leveraged it is also expected to improve
to all forms of physical connectivity to monitor progress of construction and coastal transportation, a sector
through Pradhan Mantri Gram Sadak maintenance requirements of roads. that is under leveraged. Of course,
Yojana, industrial corridors, dedicated While the PMGSY has increasingly the biggest challenge of coastal
freight corridors, Bharatmala and focused on need based road upgradation
and maintenance, connectivity through transportation is the intermodal
Sagarmala projects, Jal Marg Vikas and
UDAN Schemes. In many ways, these services is still a challenge. Many of hinterland and the last mile
statements of the Finance Minister the habitations which have single- connectivity. At an aggregate level,
reflected the priorities. There was also sided connectivity to a main road do port capacity in India, developed
emphasis on related domains, like not attract services into the habitation
since service providers are not sure of significantly through private
digital connectivity and use of Electric
Vehicles (EVs). the possibility of to-and-fro demand participation, has been keeping up
and hence the viability. Two-sided with export-import demand.
The positive point of this annual connectivity for habitations will enable
budget exercise over the years has service providers to go from habitation corridors, with the Delhi-Mumbai
been the fact that annual allocations to habitation and develop viable industrial corridor having advanced the
are part of a longer term project/ ‘through’ routes. most in terms of perspective planning.
scheme to drive reforms and quantum The other corridors are Chennai-
development in different sectors. The Moving on to industrial corridors-
as of now, there are five industrial Bengaluru, Bengaluru-Mumbai,
above remarks of the Union Finance
Minister highlighted many of such
projects/schemes. For example, the
rural road development allocations are
part of long-term phases of the Pradhan
Mantri Gram Sadak Yojana (PMGSY).
This project has been one of the most
successful ‘yojanas’ of the country.
Having begun in the year 2000, the
Phase 1 completion reached 93 per
cent of the target 178,184 eligible
habitations in March 2019, peaking at
140 kms of roads being built each day.
The remaining 7 per cent are either
not yet feasible or States have taken
them up under other schemes. A total
of nearly 6 lakh kms of all-weather
roads have been constructed. The
Phase 2 project started in 2013, with a
focus on upgradation of Phase 1 roads
The author is Director, Indian Institute of Management, Bangalore.

Amritsar-Kolkata and Visakhapatnam- the service part that first gets privatised, started with the Golden Quadrilateral,
Chennai. More than a ‘corridor’ focus, followed by the hard infrastructure, if followed by the National Highways
there seems to be a focus on nodes at all. Examples are the aviation and Development Project (NHDP) and
along or near the corridor. This reflects shipping sectors where services are the more recent Bharatmala. The
that perceived synergies are still among primarily in private hands following outlay for the Bharatmala Phase 1 is
industries in a node rather than along which the hard infrastructure like estimated at over Rs. 5 lakh crore to
the corridor. airports and ports are moving into PPPs construct 34,800 kms of highways.
mode. Amongst various infrastructure The Bharatmala Phase 2 is to focus
Rail-based dedicated freight
sectors, railways have been falling on 3,000 kms of expressways, 4,000
corridors (DFCs) are to provide the
behind in leveraging PPPs. kms of greenfield roads and support
backbone transportation for the Delhi-
to State Governments for their road
Mumbai corridor and the Amritsar- The road sector has seen significant development. While the road sector has
Kolkata corridor. It should be noted experimentation and progress through
that the 2016 budget had announced moved along, it has also been a fertile
the PPP route. This sector has had the ground for legal disputes, especially
the Kolkata-Mumbai, Delhi-Chennai benefit of incessant thrust on PPPs, on matters related to land acquisition
and Kharagpur-Vijayawada DFCs. exploring concepts such as tolling,
The Visakhapatnam-Chennai industrial and environmental clearances, and
non-toll income, viability gap funding, subsequent time and cost overruns.
corridor would be supported in part operate-maintain-transfer (OMT),
by the Delhi-Chennai and Kharagpur- toll-operate-transfer, hybrid annuity The Central Government initiatives
Vijayawada DFCs. This budget has model, etc. Right from the early days of PMGSY and NHDP/Bharatmala
addressed the Western DFC and Eastern in late 90s/turn of the century, the have also shown the way for State
DFC, currently under construction. idea of a large project with long-term Governments to add to the road network.
This, presumably, is to focus on the vision has driven the investments. It Many States have set up State Road
completion of the two corridors.
The budget had a clear statement of
policy that public-private partnerships
(PPPs) would be the way to go in
enabling modernisation. A total
investment of Rs. 50 lakh crore until
2030 has been envisaged. It is hoped
that the rail share of freight traffic in
tonne kms will go up from the current
35 per cent to 50 per cent by 2032.
While this is a good target to strive for
an environmental perspective, it cannot
happen unless there are appropriate
investments and customer-oriented
services.
It should be kept in mind that in
almost all infrastructure sectors, it is

night navigation need to be overcome to
make inland waterways competitive.
In the aviation sector, after a long
hiatus, PPPs in airports are back. The
initial five airports (Cochin, Hyderabad,
Bengaluru, Mumbai and Delhi) were
done in the 2004-07 period. After
many concerns related to tendering and
bidding, contracts and the environment,
the privatisation of airports was put
on hold. We have seen activity on
this front over the past couple of
years, with Navi Mumbai and Mopa
(Goa) being awarded. Bhogapuram
(Visakhapatnam) is being reviewed by
Development Corporations to improve pollution levels and carbon impact the new State Government, after the
high density corridors, including significantly, if adopted. earlier Government had awarded it. Six
modernised Airports Authority of India
through PPPs. Similarly, many States
Like Bharatmala, Sagarmala is (AAI) airports have been awarded
have schemes such as the Mukhya
an integrated garland of projects on the OMT framework to the one
Mantri Gram Sadak Yojana (MMGSY) along India’s coastline. Apart from bidder who won all of them. PPPs are
to add all weather connectivity to facilitating exports and imports, it expected to improve customer service
habitations with population below the is also expected to improve coastal and increase the viability of airports
PMGSY levels. transportation, a sector that is under especially through non-aeronautical
leveraged. Of course, the biggest income.
Improved road connectivity alone
challenge of coastal transportation
has been a significant driver of the is the intermodal hinterland and In terms of service connectivity,
GDP growth in India, given that road the last mile connectivity. At an the Government has done well with the
share of freight traffic is over 60 per aggregate level, port capacity in India, UDAN scheme which is now running
cent. It has provided major benefits developed significantly through private into its third round where letters of
to the trucking industry in improving participation, has been keeping up with intent have been issued to selected
reliability of deliveries, utilisation per export-import demand. operators. Under-served airports and
vehicle, confidence to leverage digital routes have been mainstreamed, with a
Inland water transportation is also
opportunities (thanks to improving combination of regulated (subsidised)
viewed as a big opportunity, through
digital connectivity) for supply chain the Jal Marg Vikas Project. This and unregulated fares. The budget has
visibility and enabling new age includes development of national also brought focus on the privatisation
trucking companies to positively waterways and terminals at important of Air India, the Government owned
disrupt the logistics business. The locations. The challenge would be carrier which has been consistently
focus on Electric Vehicles, with all intermodal and last mile connectivity. incurring losses.
the attendant incentives announced in In addition, technological challenges, Overall, the budget has recognised
this budget, is expected to bring down such as ensuring draft on rivers and the ongoing efforts and the required
increase in momentum for infrastructure
development. The Union Finance
Minister stated that over the next five
years, the successful achievement of an
investment target of Rs. 100 lakh crore
in the infrastructure sector would need
extensive planning, monitoring, and
implementation.
The critical challenges would
be land acquisition, environmental
clearances, leveraging PPPs and
providing for intermodal and last mile
connectivity. q
(E-mail: director@iimb.ac.in)

YE-1185/2019

boosting growth
perspective
Budget 2019-20: Some Reflections

A K Dubey
udget of the new
B
Government was presented
in the Parliament on 5thof
July this year. Budget is
largely a policy declaration
of the Government
showing its priorities, programmes
and targets and the provisions to
implement those programmes and steps
to achieve the targets. Through various
measures, Budget seeks to regulate the
economy.
Before the presentation of Budget
for the year 2019-20, the Economic
Survey for the year was presented in
the Parliament. The Economic Survey
throws up certain significant figures
which one has to keep in mind while
attempting to understand and analyse
the Budget. A few of these basic facts
are summarised below:
(a) The rate of growth of Gross
Domestic Product (GDP) in the
year 2018-19 has been 6.8 per
cent against 7.5 per cent in 2017-
18. The Budget aims at 7 per cent
GDP growth rate. The average
growth rate during the last five
years has been 7.5 per cent. G o v e r n m e n t ’s a n d S t a t e Budget: Main Points
(b) There is a declaration of an intent Government’s fiscal deficit is The current year’s Budget has
to become a 5 trillion economy combined, it would go up to some popular announcements and
by 2024. This will necessitate 5.8 per cent. This is actually a some initial measures for systemic
8 per cent rate of growth of GDP decline from the previous year;
in next 5 years. when it had been 6.4 per cent. Budget announces an intent to invest
(c) The Survey also informs that (e) Current Account deficit has Rs. 100 lakh crores in infrastructure
the macro economic conditions increased from1.9 per cent in next five years. It proposes an
are expected to be stable during in 2017-18 to 2.6 per cent in expert committee to study, analyse
2019-20, thanks to the structural the period April to December, and determine where the funds will
reforms effected during the last 2018. This has been because of
five years. higher trade deficit which rose
come from. Therefore, the path and
(d) The fiscal deficit has been from 162.1 billion dollars in sources of financing infrastructure
at the rate of 3.4 per cent of 2017-18 to 184 billion dollars in remains to be chalked out.
GDP. However, if the Central 2018-19.
The author is a former civil servant. He retired as Secretary (Youth Affairs), Government of India.

improvements. A few of them are There are some popular on case to case basis. This would
summarised below: mean that while taking a decision
announcements also, some of which to this effect, the peculiar facts
1. Excise and road cess on petroleum
and diesel has been hiked by
are indeed interesting, such as and circumstances of the company
Rs. 1 per litre. This has caused making Aadhaar a substitute of and its business would be kept
an increase in the price of petrol PAN. One would really not argue in consideration. The budget
and diesel. against having one unique number envisages 1.06 lakh crores as
contribution from dividends
2. Customs duties on gold and assigned to a person (citizen) which and surplus from RBI and
precious metals has been increased should have multiple applicability. financial institutions including
from 10 per cent to 12.5 per cent.
This would make gold costlier. disinvestment.
(b) Companies with turnover
Despite being costlier, gold has up to Rs. 400 crore shall 6. Public sector banks will get a
been a significant expenditure item pay lower tax at the rate of capital infusion of Rs. 70,000
because of traditional preference 25 per cent. crores. Banks have been under
for it. To an extent, it is price stress because of non-performing
(c) In order to increase the ease of
inelastic. Therefore, one can argue assets and stranded assets. This
interaction with Income Tax
that the gold would, in any case, capital infusion is expected to ease
Department, an element of
get purchased in certain quantity the stress.
automated tax assessment has
even if it is costlier. been introduced to make it a 7. Budget seeks to encourage the
3. An additional Rs. 1.5 lakh would be faceless interaction. Besides, corporates of up to 400 crore by
deductible from income tax for the there would be prefilled tax lowering the corporate tax rate to
spend on affordable housing (up to return forms also. 25 per cent. For investors too, there
Rs. 45 lakhs). This is expected to (d) There is a new element of tax are some incentives. The entire
give a flip to the sluggish housing deduction at source by 2 per lump sum withdrawal from New
sector. Budget also seeks to bring cent for the cash withdrawals Pension Scheme (NPS) which is
housing finance companies under of over a crore in a year. This is otherwise limited to 60 per cent of
the regulation of Reserve Bank aimed at discouraging the cash the accumulated amount, shall be
of India (from National Housing transactions and at promoting exempted from tax.
Board at present). cashless transactions. In 8. Long term capital gains from
4. Income tax too is going to see an ideal situation, lesser sale of housing property has been
significant changes: currency in circulation and exempted from tax if capital
(a) Income tax liability on annual more cashless transactions gains are invested in a start-
income between Rs. 2 to 5 would increase the velocity of up. To facilitate this, the Sunset
crore has been hiked by 3 per money, and in turn the GDP. Clause has been extended till 31st
cent and income above Rs. 5. Government is willing to consider March, 2021.
5 crores has been taxed by less than 51 per cent stakes in 9. There is an interesting incentive
additional 7 per cent. certain PSUs. It will be decided for electrical vehicles which will
entitle to a concession of up to Rs.
1.5 lakh on its purchase.
10. NBFCs have now been brought
under RBI’s pooled assets of
NBFCs regulation. Further, a
relief on defaults on loans in form
of partial government guarantee
has also been provided.
11. There are some interesting steps
on the consumption side. For
example, those with foreign trips
and massive power bills will also
get into the tax net. This means
that this aims at expanding the tax
base.
Keynesian wisdom suggests that
at the time of stagnation and inflation,
increase in Government spending will

result in multiplier effect. As far as for investment. Needless to reiterate sought to be tackled by Government’s
returns and investments are concerned, that while going for external global initiatives of minimum support price
we do see some indications of abiding borrowings, the prudent commercial for certain produce even though it is
by Keynesian postulates, like intention and financial practices will have to be confined to a few States. There is no
to go for global borrowings so that the adhered to. universal applicability of this because
funds for investments are available in of the agro-geographic diversity. So,
A Budget is indicative of both
the country and Government would not we can’t have one size fits all approach
the quantity of investments and the
be competing with the private sector. in agricultural sector. There is a need to
priorities of investments. Budget also
concentrate on higher farm productivity
Some General Points indicates how should the revenue be
in its entirety which would require
assessed, understood, collected and
There are some popular significant investment. For example
allocated. A good portion of receipts has
announcements also, some of which Punjab farm productivity, can be quoted
to be allocated to the various initiatives
are indeed interesting, such as making where higher productivity has had its
in social sector in a developing economy
Aadhaar a substitute of PAN. One associated problems such as salination
like ours. Besides, certain expenditure
would really not argue against having of soil, loss of underground water etc.
on public good including defence have
one unique number assigned to a person which have since aggravated. In order
to be provided for, without much option
to conserve and restore soil, massive
(citizen) which should have multiple to tweak with the figures.
applicability. Every PAN cannot become investment are required. Therefore,
a substitute of Aadhaar but every There is a provision for 20 per cent increased farm productivity cannot be
Aadhaar can always be a substitute for tax on buy back. The corporates feel an approach in isolation; it has to keep
PAN. That is because every Aadhaar that 20 per cent tax of buy back schemes in consideration the consequential
number may not be an income tax of listed companies is a dampener. This corrective measures and its cost.
assessee but essentially every income will make the buyback costlier. In any Perhaps a revisit to the farm economic
tax assesse will have an Aadhaar case, the buyback option, being a form imperatives has become due.
number. Then through this measure, of disinvestment, is usually exercised
by the cash rich companies. However, Budget usually generates arguments
are we heading towards Single National on the perceived priorities of the
Identity Number for every citizen which the size of ‘buy back’ in a year would
determine its actual impact. scholars and experts to put up a case
will have multiple applicability and that one particular sector should get
universal acceptability? On similar It is seen that average productivity more and the other should have got less.
lines, Aadhaar number could substitute from farm sector has been falling. The But certain objectives viz., revival of
the Companies Directors Index Number reasons are not difficult to understand. agriculture, encouragement of medium
(DIN), NPS number, EPF number etc. The work force that is added largely and heavy industries and expansion of
This may perhaps make digital linking constitutes additional hands without services remain a common concern. But
easier. additional skills and additional guiding the investments and returns do
Budget announces an intent to invest capital. So the unskilled work force necessitate changes in the system such
Rs. 100 lakh crores in infrastructure gets disguised employment in the as simplification of tax procedures,
in next five years. It proposes an agricultural sector which subsequently simplification of GST procedures, relief
expert committee to study, analyse and reduces the marginal productivity in and support for expansion of supply
determine where the funds will come farm sector. Ideally, if the farm sector of goods and services and also for the
from. Therefore, the path and sources is employing lesser number of people, companies which provide goods and
of financing infrastructure remains to per capita productivity will go up. services. Taxing consumption has been
be chalked out. Further, the input cost too is a matter the easier way of tax collection. Direct
of concern. It is this situation which is tax forms such as Tax deduction at source
The Budget indicates to going for is fine, but limited in its applicability and
borrowing from global markets. This
would mean that the Government does
The Budget indicates to going for ease of business. Things like making
tax assessment faceless, expanding the
not want to compete with private sector borrowing from global markets. This
tax base etc. would be a positive step in
for funds in the domestic market. This would mean that the Government this direction. Tax reforms are of course
also is an indication of the fact that does not want to compete with absolutely necessary without which
Government has full confidence in the private sector for funds in the the fiscal management will remain a
Rupee exchange rate as well as foreign
domestic market. This also is difficult task. But at the same time,
exchange reserves. This, in one way is there is a need to address the issues
very significant because the source of an indication of the fact that emanating from Non-performing assets’
finance available for investment to the Government has full confidence in financial stress, diversion of funds and
entrepreneurs across the country is not the Rupee exchange rate as well as consequent starvation of the sector. q
unlimited. This intent of Government
will add to the availability of funds foreign exchange reserves. (E-mail: akdubey23@hotmail.com)

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YE-1205/2019

improving amenities
measures
A Railway Budget Focussed on Reforms

Shine Jacob
n July 5, when India’s
first full-time woman
O Finance Minister Smt.

Nirmala Sitharaman
presented her maiden
Budget, the expectations
from the Railways sector was on a
high.
The Budget highlighted that the
Indian Railways need another Rs. 50
lakh crore worth of investments in
the next 11 years or by 2030. Though
it may sound unrealistic for many, as
this much investment may take at least
three decades’ time, considering the
current pace of capital expenditure,
the Finance Minister herself has
given the answer, “raise private sector
participation.”
Raising The Bar

For the financial year 2019-20, the
total outlay for capital expenditure is
kept at Rs. 1,60,175.64 crore, up 15
per cent from Rs. 1,38,857.52 crore
during the previous financial year. The
Budget also estimates an all-time high
government investment of Rs. 65,837
crore, posting an increase of 24 per
cent over Rs. 53,060 crore that came
as Budgetary Support in 2018-19. On
the other hand, borrowings through resources and Rs. 79,297.52 crore for 2018-19. This may further increase
Indian Railway Finance Corporation from Extra Budgetary Resources. as the National Transporter is going
(IRFC) was kept at Rs. 55,471 crore, for a massive recruitment drive.
However, a concern for the Indian Already, the process of recruiting
up from Rs. 52,297 crore in the revised
Railways is its rising staff cost that over 1.5 lakh candidates in various
estimate for 2018-19.
increased to Rs. 86,554.31 crore safety categories like assistant loco
The key components of the during the financial year, up by pilot and technicians, safety category
capex plan for the year comprised of Rs. 8,758 crore, compared to Rs. posts of operating departments and
Rs.10,500 crore that came in the form 77,796.24 crore in the revised estimates technical departments such as civil
of internal resources; Rs. 83,571 crore
from Extra Budgetary Resources The major projects that are under the Railways platter include completion
and Rs. 267.64 crore from Nirbhaya of 100 per cent electrification, advanced signalling, improving passenger
Fund. This was compared to a lower amenities and station redevelopment.
Rs. 6,500 crore lined up as internal
The author is a journalist with Business Standard, India.

engineering, electrical, mechanical,
signal and telecommunication, in
both the Level-1 and Supervisory
Categories have started. In the month
of February, notification for hiring
another 100,000 staff in Level-1 was
also issued.
During the financial year, the
gross traffic receipts – including
passenger, freight and other earnings
– is expected to see 14.1 per cent
increase and reach Rs. 2,16,675 crore,
compared to Rs. 1,89,903.95 crore in
2018-19. As per the Budget document,
the Government expects receipts from
passenger services to increase by 9.7
per cent from Rs. 51,066.64 crore in
2018-19 to Rs. 56,000 crore this year.
On the other hand, the freight services, In terms of physical performances, advanced signalling, improving
which is the main revenue earner freight loading target increased to passenger amenities and station
for the Indian Railways, may see an 1274 Million Tonne (MT). This is redevelopment.
increase of 12.2 per cent in its receipts 52.61 MT or 4.3 per cent over 2018-
to Rs. 1,43,000 crore, compared to 19. Similarly, originating passengers In addition, the focus will be on
Rs. 1,27,430.08 crore in 2018-19. too increased to 8593.79 million, increasing the Railway’s share in
1.8 per cent over actuals (Prov) of India’s freight traffic from a mere 30
Interestingly, the operating ratio
2018-19. per cent to around 60 per cent by 2030.
for the year was pegged at 95 per cent,
This is mainly because passengers
compared to the actual 97.3 per cent
last year. Operating ratio is calculated Where Will the Investments Come are being heavily subsidised taking
based on how much money railways is From? revenue from freight, making it the
spending to earn each rupee (spending breadwinner of the Railways. Based
Shri Goyal lined up the key on an estimate, the Railways bear 73
95 paise to earn each rupee in 2019- areas in which the Rs. 50 lakh crore
20). The merger with main Budget in paise in cost for every 10 kilometre
investments are going to come by
2017 has helped the Railways in doing travel, while it charges only 36 paise
2030. His roadmap included a whole
away with the around Rs. 9,700 crore to passengers.
gamut of investments for regional
of annual dividend that it used to pay
connectivity, through government Stressing on the importance of
to the Government for gross budgetary
expenditure and private funding. more private sector participation in
support.
The major projects that are under the the sector, NITI Aayog cited in a
Still, private sector participation Railways platter include completion recent report that the Railway’s share
should increase multi-fold to make the of 100 per cent electrification, in the transportation of surface freight
Rs. 50 lakh crore target a reality. During has declined from 86.2 per cent in
the current year, the investments
through public-private partnerships
The Railway Board has lined up 1950-51 to 33 per cent in 2015, due
to a shortfall in carrying capacity and
were pegged at only Rs. 28,100 crore at least 600 stations across the
a lack of price competitiveness. The
in 2019-20. After the Budget, the country for redevelopment, for planned Dedicated Freight Corridors
Railways Minister Shri Piyush Goyal which an overall investment of (DFCs) are likely to be game changers
said that the Government may be open
to ideas like setting-up of separate Rs. 1 trillion is expected. The in increasing the freight share. Two
lines by private parties, if it benefits authorities have already kicked DFCs – Eastern and Western – are
expected to be commissioned by
the passengers as well. “We already off the process in many stations
have partnerships with companies 2022 at an estimated investment of
like Anand Vihar, Habibganj in Rs. 81,459 crore. Similarly, two other
like Coal India and NTPC. We have
to expand and fast track this,” he Madhya Pradesh and Gandhinagar DFCs – East West and East Coast
said. The idea is to invite private in Gujarat. The idea is to have – with investment of Rs. 1.23 lakh
participation in passenger and freight airport-like facilities at railway crore are also in the pipeline and may
services, tracks and rolling stock be on track by 2027. Smt. Sitharaman
stations too.
manufacturing too. said that the proposed DFCs will also

mitigate the congestion in the existing To improve passenger amenities, existing signalling system is also in
rail network. all the Railway stations (excluding place. This may bring in Automatic
halt stations) may soon be provided Train Protection (ATP) system using
The Government is planning to go with Wi-Fi facilities. So far, the a mix of proven European Train
for electrification of its entire broad facility is available in 1,603 stations Control System (ETCS) and an
gauge network by 2021-22. Based on indigenous developed system to
and balance 4,882 stations are
July data available with the Ministry enhance safety, create additional
targeted for provision by August
of Railways at least 28,810 km is
31, 2019 under the ambitious 100 capacity and increase efficiency in
taken up for electrification at a cost train operations.
days programme of the Government.
of around Rs. 27,000 crore, out of
Similarly, bringing all stations under The Budget also proposed an
which around 7,000 km is lined up
for 2019-20. The target of new lines, CCTV based Surveillance System at increased focus in suburban networks
gauge conversion and doubling was all stations by 2021-22 is also being through increasing investments in the
also increased to 3,750 km this year, taken up at a rapid pace. Already 455 suburban networks through special
up from 3,596 km in 2018-19. stations are having this facility. purpose vehicles like rapid regional
transit systems. One existing model
On the other hand, station One of the projects of the Prime
on this is the upcoming Delhi-Meerut
redevelopment is one key area where Minister that is going to revolutionise Regional Rapid Transit System (Delhi-
private investments are expected the travel experience in India is the Meerut RRTS) that is expected to
to come. The Railway Board has Mumbai-Ahmedabad High Speed be ready by 2025. Based on the
lined up at least 600 stations across Rail (MAHSR) or bullet train, which roadmap, with a maximum speed of
the country for redevelopment, for may come up at a cost of Rs. 88,000 160 km per hour, the distance between
which an overall investment of Rs. 1 crore. This is likely to be in place Delhi and Meerut may be covered in
trillion is expected. The authorities by 2023. A major portion of the around 62 minutes once the project is
have already kicked off the process proposed investment may also come commissioned.
in many stations like Anand Vihar, for procuring and making ultra-
Habibganj in Madhya Pradesh and modern trains like train 18s and train If these plans turn a reality, the
Gandhinagar in Gujarat. The idea 20s and for coming up with 7500 end beneficiary will be the Indian
is to have airport-like facilities at km of very high speed rail systems.
passenger. q
railway stations too. A massive plan to overhaul the (E-mail: shinejac@gmail.com)
YE-1201/2019

YE-1206/2019

access & equity
vision
Building a New India through Education Reforms

Alok Kumar, Sarah Iype and Urvashi Prasad
ver the last few years,
major reforms have been
O initiated by Government
of India to improve
access, equity and quality
in the education sector.
In the area of school education, the
Government has taken significant steps
to address the challenges of suboptimal
learning outcomes. In higher education,
the emphasis has been on setting
up new premier institutions across
the country, marking the highest
ever such expansion in history after
Independence. Moreover, there is a
conscious effort at rearchitecting the
higher education regulatory landscape
to ensure quality without compromising
the autonomy of institutions.
The Government has also recently
put out a draft of the National Education
Policy which aims to systematically
transform school and higher education
in the public domain for comments.
Further, financial allocations for
education have evolved over the years.
Since the Millennium Budget in the
year 2000, spending on education
has increased around 17-fold from
Rs. 5,635 crore to Rs. 94,853.64 to a school. Initiatives to promote Ratio pan-India touched an impressive
crore in Union Budget 2019-20 1 Education for All included the launch 99.89 per cent at the primary level in
(Figure 1). Of the total education of the Sarva Shiksha Abhiyan, the 2014-15. Currently, the Indian school
budget, Rs.56,536.63 crore has been passage of the Right to Education education landscape includes around
allocated for school education while Act and the scaling up of Mid-Day 15 lakh schools with 89 lakh teachers,
Rs. 38,317.01 crore has been dedicated Meal Schemes. These efforts have catering to a population of over 25
for higher education. This represents yielded success. Gross Enrolment crore students.
a 12.8 per cent Year-on-Year (Y-o-Y)
increase in FY20 for school education As highlighted by the Union Finance Minister in her Budget Speech
and a 14.3 per cent Y-o-Y rise in
budgetary allocation for higher
2019-20, the Higher Education Commission of India (HECI) legislation has
education. been drafted for repealing the UGC Act, 1956. The legislation proposes
to completely overhaul the regulatory framework governing higher
School Education
education; moving from an intrusive, fragmented, input-based
Flashback to 20 years ago, regulatory system to a more open, outcome and
Governmental policy focused on
ensuring that every child has access accreditation-based regulatory system.
Alok Kumar is Adviser (HRD), Sarah Iype is Young Professional and Urvashi Prasad is Public Policy Specialist, NITI Aayog,
Government of India.

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education to all’. A distilled focus linked funding as envisioned in the
enrolment over 95 per cent over the
last 10 years in primary education. )LJXUUH $OORFDDWLRQV IRU NHH\ LQLWLDWLYHHV LQ VFKRRO HGXFDWLRQ LQ WKH 8QLR RQ %XGJHW
The number of schools with toilets 5VLQFU Figure 2: Allocations for key initiatives in school education in
URUH
has doubled reaching 66.4 per cent the Union Budget 2019-20 (Rs. in crore)
in 2018. However, the percentage of
Ͷ
ͶͲͲͲͲ ͵͸ͶͶ͹ǤͶ
children in Std. III who can read a
͵ͷͲͲͲ
͵ ͵Ͳͺ͵͵Ǥͻͻͻ
Std. II level text has increased only
by around 6 per cent; from 21.6 per ͵
͵ͲͲͲͲ
cent in 2013 to 27.2 per cent in 2018. ʹ
ʹͷͲͲͲ
ʹͲͲͲͲ ͻͻͶͻǤͲͶ ͳͳͲͲͲ
In short, while India has witnessed
a schooling revolution, a learning ͳͷͲͲͲ
ͳͲͲͲͲ
revolution is the need of the hour.
ͷͲͲͲ
Consequently, the focus of the Ͳ
Union Government has shifted to ȋʹͲ
ͲͳͺǦͳͻȌ ȋʹͲͳͻ
ͻǦʹͲȌ
improving the delivery of quality
education, which also constitutes

62 9DULRRXVLQLWLDWLYHHVWRZDUGVUHHDOLVLQJWKLVYLVLRQDUHEEHLQJXQGHUWD
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quality remains a challenge as does
employability of graduates.
In order to increase the enrolment
in higher educational institutions,
various steps have been taken
including issuing of new University
Grants Commission regulations for
Open and Distance Learning that
allow the entry of reputed institutions
for offering education in the distance
learning mode and the expansion of
centrally funded institutions.
Additionally, State Governments
are being encouraged to set up
institutions through the Rashtriya
Uchchatar Shiksha Abhiyan (RUSA).
Ministry’s maiden PGI report will be multiple innovative interventions
The key components of the scheme
critical to incentivizing States/UTs in being undertaken at the grassroot include upgradation of autonomous
bringing tangible changes focused on levels are strong signs that the colleges to universities, clustering of
improving outcomes. country is taking the right steps colleges for setting up a University,
towards ensuring the success of establishing new professional
NITI Aayog is driving systemic
our school system. These reforms colleges in underserved areas and
transformation through academic
will help build a New India, where providing infrastructure grants to
and administrative reforms in its
every teacher delivers effective and Universities and colleges for ramping
Sustainable Action for Transforming
engaging lessons; every child is in a up capacity. Quality enhancement has
Human Capital in Education
school which fosters joyful learning been prioritized during the second
(Project SATH-E). This project,
and critical thinking and every school phase of RUSA (2017-20) along with
implemented in partnership with the addressing concerns of access and
is equipping our citizenry with future-
State Governments of Jharkhand, equity in the aspirational districts
ready skills to navigate and succeed
Odisha and Madhya Pradesh, is identified by NITI Aayog.
in a continuously evolving world.
transforming the school education
ecosystem by ensuring effective Higher Education The Government has also
school units through State-wide undertaken reforms in the National
learning enhancement programmes, India’s higher education sector Assessment and Accreditation
school consolidation and mergers, is grappling with a twin burden of Council (NAAC) as part of which
teacher rationalisation, organisational expanding access to cater to the accreditation of higher education
restructuring, as well as enhancing ever-growing aspirations of youth institutions has been made mandatory.
transparency and accountability in while maintaining quality to ensure Crucially, the reforms signal a
the system through digital innovation. graduates become a part of the departure from an intrusive system
productive workforce. to a more enabling, mixed method
A diagnostic done in each State
of assessment and accreditation.
has helped formulate a customised
India now has 864 university- Additionally, greater emphasis has
roadmap with targeted interventions.
level institutions, 40,026 colleges and been placed on self-assessment, data
SATH-E’s ‘Theory of Change’ along gathering and validation by third-party
11,669 stand-alone institutions.2 The
with its challenges and successes will evaluation as well as objective peer
number of university-level institutions
be documented and disseminated as review.
has grown by about 25 per cent and
scalable models that can be taken up
the number of colleges by about 13 Further, an autonomous and
across the country.
per cent in the last five years. India’s self-sustaining National Testing
The decision by India to participate higher education GER (calculated for Agency has been established to
in the Programme for International the age group, 18-23 years) increased conduct entrance examinations for
Students Assessment (PISA) in 2021; from 11.5 per cent in 2005-06 to higher education institutions thereby
the move to revamp one of the world’s 25.2 per cent in 2016-17. However, relieving agencies like the Central
largest Management Information we lag behind the world average of Board of Secondary Education from
Systems (Unified District Information 33 per cent and that of comparable their responsibility of conducting
System on School Education) towards economies, such as Brazil (46 per entrance examinations as well as
collecting data in real-time as well as cent) and China (30 per cent). Further, ensuring greater standardisation and

reliability in the methodology for of India (HECI) legislation has been creating centres of excellence and
assessing students. drafted for repealing the UGC Act, encouraging public-private R&D
1956. The legislation proposes to partnerships, among others. In this
In another major reform, a three- completely overhaul the regulatory year’s budget speech, the Union
tiered graded autonomy regulatory framework governing higher education; Finance Minister has announced
system has been initiated, with the moving from an intrusive, fragmented, a National Research Foundation
categorisation of institutions as per input-based regulatory system to a (NRF) for funding, coordinating and
their accreditation score by the NAAC more open, outcome and accreditation- promoting research in India. NRF
or other empaneled accreditation based regulatory system. will assimilate the research grants
agencies or by their presence in
being given by various Ministries,
reputed world rankings. Category In the recent past we have seen the
independent of each other, thereby
I and Category II Universities will inclusion of three institutions from
have significant autonomy. Similarly, India in the QS World University reducing the duplication of effort and
the University Grants Commission Rankings (IIT Bombay, IIT Delhi and expenditure as well as allowing us to
has also issued new regulations IISc), an achievement which has eluded focus on the thrust areas relevant to
for granting autonomy based on us thus far. A sum of Rs. 400 crore has our national priorities.
accreditation scores for colleges. been allocated for the development of Successive national policies have
These colleges will have the freedom “World Class Institutions” in the 2019- accorded due importance to the
to conduct examinations, prescribe 20 financial year, a substantial increase education sector in charting India’s
evaluation systems and even announce from the Rs. 128.90 crore allocated in
development trajectory. Education is
results but are not allowed to grant the 2018-19 RE (Figure 3).
well placed to build sound foundations
degrees.
Furthermore, a programme called for sustainable development, evidenced
On a similar theme, the IIM Bill ‘Study in India’ has been implemented by its evolution through constitutional
was passed by both the houses of to attract foreign students to higher and legislative reform, Union and
Parliament on 19 December, 2017, educational institutions and make State schemes, key budgetary
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(IIMs) and strengthen their position Networks has also been developed for the Transformation of Aspirational
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as institutions of excellence. As per encouraging international scholars to
IUDJPHQWHG LQSXWEDVHG UHJXODWRU\ V\VWHP WR D PRUH RSHQ RXWFRPH DQG Districts Programme, towards its
the provisions of the Bill, IIMs will pursue visiting professorships in Indian
DFFUHGLWDWLRQEDVHGUHJXODWRU\V\VWHP implementation. Its presence in the
be instituted as body corporates and universities. concurrent list highlights the symbiotic
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governed by a Board also comprising
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alumni. The Board will have the play in deciding learning priorities,
been given due priority in the Union
KDVHOXGHGXVWKXVIDU$VXPRI5VFURUHKDVEHHQDOORFDWHGIRUWKHGHYHORSPHQW
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design and granting of degrees. With
243.6 crore in RE 2018-19. Research latest Draft National Education Policy
the passage of the Bill, IIMs will also
)XUWKHUPRUH D SURJUDP FDOOHG µ6WXG\ actualises a synthesis of historic
be able to award MBA degrees instead LQ ,QGLD¶
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)LJXUH $OORFDWLRQV IRU NH\ LQLWLDWLYHV LQ KLJKHU HGXFDWLRQ LQ WKH 8QLRQ %XGJHW and effectiveness of expenditure
Figure 3: Allocations for key initiatives in higher education in the
5VLQFURUH on education. Translating policy to
Union Budget 2019-20 (Rs. in crore)
observable outcomes would require
ʹͲͲͲ
holistic alignment, catalysing the New
Ƭ Ͷ͸ͻǤͳͺ India vision into will and action.
ͶͲͲ
ͳʹͺǤͻ References
͸ͲͺǤͺ͹
Ƭ ȋʹͲͳͻǦʹͲȌ 1 https://www.indiabudget.gov.in/
ʹͶ͵Ǥ͸
ͶͶͷǤͷ͵ ȋʹͲͳͺǦͳͻȌ 2 NITI Aayog’s ‘Strategy for New

͵͹ʹ India @ 75’ q
͸ͶͲͻǤͻͷ
ͷ͹ͳͶǤ͹ (E-mail: alokkumar.up@ias.nic.in
sarah.iype@nic.in
Ͳ ͳͲͲͲ ʹͲͲͲ ͵ͲͲͲ ͶͲͲͲ ͷͲͲͲ ͸ͲͲͲ ͹ͲͲͲ
urvashi.prasad@nic.in)

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DQGJURZWKRIUHVHDUFKLQWKHFRXQWU\LQFOXGLQJHVWDEOLVKLQJ,QVWLWXWLRQVRI(PLQHQFH
FUHDWLQJ FHQWUHV RI H[FHOOHQFH DQG HQFRXUDJLQJ SXEOLFSULYDWH 5 ' SDUWQHUVKLSV
agriculture
initiatives
Towards Farmers’ Welfare

Jagdeep Saxena
n the Union Budget
(FY 2019-20) farmers’
I welfare and agriculture

got a record boost both
in terms of financial
allocations and vision
for transformation. The Government
reiterated its commitment to double
farmers’ income by 2022 by enhancing
support to ongoing schemes, initiating
new schemes and introducing a
series of measures that help to raise
socio-economic status of the farming
community. While presenting the
Budget, Finance Minister Smt. Nirmala
Sitharaman, expressed the intent of
the Union Government by saying,
that at the centre of everything that
we do, we keep gaon, garib or kisan
(village, poor and farmer). In tune with
this statement, the Budget proposals
responded well to the aspirations of
farmers and also initiated processes to
transform the agriculture sector.
Positive Allocation for Prosperity

Total allocation for agriculture
Allocation to various core and central In a bid to strengthen rural
and allied sector have been enhanced
schemes involving crops, livestock infrastructure, the Budget has allocated
to Rs. 1,51,500 crore over the earlier
and fishery and also price interventions Rs. 19,000 crore for rural roads, a jump
allocation of Rs. 86,600 crore (revised
including Minimum Support Price of 22.5 per cent over the expenditure
Budget estimate in FY 19). This leap
(MSP) for crops (other than wheat and in the previous year. Better road
is mainly due to huge allocation of Rs.
paddy) have been given a boost by 6 connectivity facilitates easy access
75,000 crore to the Pradhan Mantri
to 50 per cent increase in budgetary to markets and helps diversification
Kisan Samman Nidhi (PM-KISAN).
provisions. To enhance the positive of agriculture. The Finance Minister
This unique scheme provides direct
impact of interest subsidy, it has emphasised that to accelerate the speed
cash assistance to farmers to the tune
been raised to Rs. 18,000 crore, a net of achieving universal connectivity
of Rs. 6,000 to each farmer in three
increase of 20 per cent over last year. of eligible habitations, the target
equal installments during a year. Cash
This assistance is applicable to all the was advanced from 2022 to 2019.
assistance is likely to boost local
short-term credits to farmers. Besides construction of new roads,
income and consumption in rural
areas, giving way to economic growth.
But the allocation to agriculture does
Besides construction of new roads, Pradhan Mantri Gram Sadak Yojana-III
not include fertiliser subsidy, which (PMGSY-III) envisages to upgrade 1.25 lakh km of road length over the
now stands at Rs. 80,000 crore with next five years with an estimated cost of Rs. 80,250 crore.
an increase of nearly 14 per cent.
The author is Former Chief Editor, Indian Council of Agricultural Research, New Delhi.

Pradhan Mantri Gram Sadak Yojana- Cooperatives Act (APMC) should not during 2019-20 in which 50,000 rural
III (PMGSY-III) envisages to upgrade hamper farmers from getting a fair artisans will receive a hand-holding
1.25 lakh km of road length over the price for their produce. Ease of doing from Government in the form of
next five years with an estimated cost business and ease of living, both should capacity development and market
of Rs. 80,250 crore. Committed to the apply to farmers too, she said. To support. Very soon, rural artisans
agenda of sustainable development, ensure economies of scale for farmers, will be a part of economic value
30,000 km of PMGSY road have been it is proposed to form 10,000 new chain. Additionally, to infuse elements
built using Green Technology, Waste Farmer Producer Organizations (FPOs) of science and technology in these
Plastic and Cold Mix Technology, over the next five years. FPOs are industries, Government proposes to
thereby reducing carbon footprints. basically farmer-oriented companies strengthen scheme for Promotion
Along with rural roads, Government that follow a B2B model for marketing of Innovation, Rural Industry and
has also increased allocation under of their produce according to policy Entrepreneurship (ASPIRE) to set up
Pradhan Mantri Krishi Sinchai Yojana and process guidelines of Ministry of 80 livelihood Business Incubators and
(PMKSY) to the tune of 17 per cent. Agriculture. FPOs enable farmers to 20 Technology Business Incubators
This scheme, launched in 2016, has enhance productivity through efficient, during 2019-20. The initiative is likely
made significant progress in expansion cost-effective and sustainable resource to develop 75,000 skilled entrepreneurs
of irrigated areas by supporting and use and realise higher returns for in agro-rural industry sectors. These
accelerating major and medium their produce. In many states, FPOs measures will promote growth and
irrigation projects and promoting other have recorded grand success, as such, development of Medium, Small and
measures, such as micro-irrigation, enhancement in its numbers is a Micro enterprises (MSME) in rural
watershed development and harnessing right step for augmenting sustainable areas, especially in agro-processing
of traditional water bodies. livelihood for farmers. sector. At present, the growth rate of
food processing sector is stagnating
Boost to Business Further, the Scheme of Fund for at about 1 per cent, but according to
Upgradation and Regeneration of experts, a growth rate of more than
Electronic National Agriculture Traditional Industries (SFURTI) aims
Market (e-NAM) was launched in 3 per cent will help in agricultural
to set up more common facility centres transformation. Recent initiatives
2016 with a view to ensure best market to facilitate traditional industries
price to farmers for their produce. This proposed in the Budget will have a
sector. Government has identified favourable impact on the agri-food
year, Government proposes to work Bamboo, Honey and Khadi industries sector.
with State Governments to implement for cluster development to make such
e-NAM mechanism in such a way traditional ventures more productive, Attracting Investments
that farmers can take full benefit of profitable and for generating sustained
it. The Finance Minister said that employment opportunities. SFURTI Government has realised that like
the Agriculture Produce Marketing scheme aims to set up 100 new clusters other sectors, agriculture also requires

substantial investment from the
corporate world. At present, only 14 per
cent of gross value added in agriculture
is invested in the sector. This includes
78.01 per cent investments by farmers,
19.4 per cent by public sector and a
dismal 2.5 per cent by private sector.
Hence, Finance Minister in her Budget
speech stated that the Government
will support private entrepreneurship
in driving value-addition to farmers’
produce from the field and for those
from allied activities, like bamboo
and timber from the hedges and
for generating renewable energy.
“Annadata (Farmers) can also be
Urjadata (energy provider)”, she said. Yojana (PMMSY), to establish a robust from natural resources. ‘Zero Budget’
In this regard, Government has already fisheries management framework. does not mean that farmer is going
taken initiatives by launching a specific The comprehensive scheme will to have no costs at all, but rather that
scheme Kisan Urja Suraksha evam address critical gaps in the value chain, any costs will be compensated for
Utthaan Mahabhiyan (KUSUM) in including infrastructure, modernisation, by income from intercrops or other
March, 2019. The scheme envisages traceability, production, productivity, resources of additional income. With
solarisation of agriculture pumps post-harvest management and quality due recognition and promotion from
and installation of solar power plants control. Union Government has already Union Government, ZBNF is likely to
(500 KW to 2 MW) on the barren or created an exclusive Ministry of Animal create a wave across the country.
agriculture lands of individual farmers/ Husbandry, Dairying and Fisheries to
After pulses, now Government
cooperatives/panchayats/FPOs. The promote these sectors with more
is focusing its attention to increase
scheme would provide extra income resources and attention. Livestock act
production and productivity of oilseeds.
to farmers by giving them an option to as “livelihood insurance” in case of
With concerted efforts, the country
sell surplus power to the grid. Besides, weather anomalies and adversities
has already become self-sufficient
it will help abatement of air pollution when crops fail to generate income.
in pulses, saving valuable foreign
and would generate employment at
Back to Basics exchange that was earlier incurred
local level. on import of pulses. In oilseeds, the
As a first, Government has shown country witnessed ‘Yellow Revolution’
Dairy is another sector in which
intent and desire to promote Zero during 1990s but soon it faded away
private sector and cooperatives can
play a central role in enhancing Budget Farming, which has become due to various agrarian factors and
income of farmers. A large number of popular now in some States. “We policy issues. With the budgetary
entrepreneurs, especially youth, are shall go back to basics on one count: proposal to enhance productivity of
taking up dairy as a full-time profession Zero Budget Farming”, said Finance oilseeds, we are again on the path
for livelihood, and also creating Minster in her Budget speech and of self-sufficiency in oilseeds. “Our
employment opportunities in sub-urban also underlined the need to replicate import bill shall be reduced by their
or rural areas. Hence, Government has this innovative model through which, (Farmers) Seva”, hoped the Finance
proposed to encourage dairy through in a few states, farmers are also Minister.
cooperatives by creating infrastructure already being trained in this practice.
Karnataka, Himachal Pradesh, Kerala, Union Budget with its proposal
for cattle food manufacturing, to invest widely in agricultural
milk procurement, processing and Uttarakhand, Chhattisgarh and Andhra
infrastructure and support to private
marketing. Similarly, fisheries have Pradesh have already adopted the
entrepreneurship has fast forwarded
been identified as a critical sector to method which needs less water, lower
farmers’ welfare to chase the goal of
push up rural prosperity, especially in input costs, yet gives higher yields.
doubling farmers’ income by 2022.
coastal areas. “Fishing and fishermen Shri Subhesh Palekar, a Padma Shri
Along with, a fresh impetus has been
communities are closely aligned awardee and 70 year old farmer from
Vidarbha, is a pioneer of this unique given to revive the rural economy. All
with farming and are crucial to rural these measures are expected to bring
India”, observed Finance Minister technique which he calls Zero Budget
Natural Farming (ZBNF). ZBNF cheer on the faces of farmers and help
in her Budget speech. It is proposed reduce the agrarian distress. q
to launch a focused scheme, the promises to drastically cut production
Pradhan Mantri Matsya Sampada costs as most of the inputs are drawn (E-mail:jagdeepsaxena@yahoo.com)

YE-1192/2019

INCLUSION
QUANTIFIABLE BENEFITS
Welfare and Empowerment of Marginalised

through Budgetary Interventions
Muniraju S B, Chaitra Devoor
he Prime Minister, has h. Self-sufficiency and export of In addition there are certain social
visualised that “In the last
T
food-grains, pulses, oilseeds, groups which need Government
five years our government fruits and vegetables; interventions such as Persons
has taken several steps with Disabilities, Senior Citizens,
to empower the poor, i. Healthy society – Ayushman Transgender Communities and De-
farmers, Scheduled Bharat, well-nourished women Notified, Nomadic and Semi Nomadic
Castes, oppressed and the down- and children. Safety of citizens; Communities.
trodden. In the next five years this j. Team India with Jan Bhagidari.
empowerment will make them the There has been visible impact on
Minimum Government Maximum the socio-economic indicators with
powerhouse of development. . . .This Governance.
is a Budget that will enrich the country respect to SCs, STs and others. For
and make its people more empowered. Article 46 of the Constitution states instance, rural poverty ratio amongst
The poor will get strength and the youth that, “The State shall promote, with the SCs, which was 53.5 in 2004-05,
a better tomorrow from this Budget.” special care, the education and has decreased to 31.5 in 2011-12. In
economic interests of the weaker case of STs rural poverty ratio has
The theme of Ek Bharat Shresht sections of the people, and, in particular decreased from 61.18 in 2004-05 to
Bharat is prime focus of the Government of the Scheduled Castes and Scheduled 45.3 in 2011-12. Literacy rate amongst
to achieve inclusive growth with Tribes, and shall protect them from SCs was 21.38 per cent in 1981, but
agenda of ‘no one left behind’ in the social injustice and all forms of social has increased significantly to 66.07 per
area of development. The current exploitation.” cent in 2011. Similarly for STs in the
Government has clearly visualised the corresponding period, has increased
development with following visions to As mandated in the Constitution, from 16.35 per cent to 58.96 per cent.
make it real: every successive Government strives
to ensure inclusive development of The Union Government and States
a. Building physical and social have obligation to earmark funds
infrastructure; weaker sections. Weaker sections
are the sections which are included and ensure welfare and development
b. Digital India reaching every sector in the Schedules of the Constitution opportunities for SCs, STs, Women and
of the economy; under Article 341 and 342. Castes/ Children through Gender Budgeting,
c. Pollution free India with green communities included in the list of Budgeting for Children and budgetary
Mother Earth and Blue Skies; Other Backward Classes, and the six allocations for SCs and STs. The
Religious Minorities viz. Muslims, Union Government in its Full Budget
d. Make in India with particular
Christians, Sikhs, Buddhists, Jains and 2019-20 has allocated Rs. 81340.74
emphasis on MSMEs, Startups,
Parsis (Zoroastrians). crore for Scheduled Castes Sub-Plan,
defence manufacturing,
automobiles, electronics, Fabs and The Union Government and States have obligation to earmark funds and
batteries, and medical devices;
ensure welfare and development opportunities for SCs, STs, Women and
e. Water, water management, clean Children through Gender Budgeting, Budgeting for Children and budgetary
rivers;
allocations for SCs and STs. The Union Government in its Full Budget
f. Blue Economy;
2019-20 has allocated Rs. 81340.74 crore for Scheduled Castes Sub-Plan,
g. Space programmes, Gaganyan,
Chandrayan and Satellite Rs. 52884.82 crore for Tribal Sub-Plan, Rs. 136934.10 crore for Women
programmes; empowerment and Rs. 91644.29 crore for welfare of Children.
Muniraju S B is Deputy Adviser (Social Planning), NITI Aayog, Government of India and Smt. Chaitra Devoor is Technical Officer
CPHEE, Ministry of Urban Development, Government of India.

Budget Allocation for marginal sections in 2019-20
Chart: 1 Budget Allocation
Rs.for
in Marginal
crores Section in 2019-20 Rs. 434607.3 women empowerment
Rs. in crores and Rs. 360807.2 crore for welfare
andSCSP
S development of Children in total
Budget for Rs. 22%
1272534 crore has been spent or
Budget for Children
Children, 91644.29 28% allocated for various schemes being
SCSP, implemented for marginal sections
81340.74
of India.TSP
14%
Gender Budget
B
36%
The Nodal Ministries dealing with
%
TSP, marginal groups viz. Ministry of Social
52884.82
Justice and Empowerment has allocated
Gender Rs. 8.885 crore, while the Department
Budget, 136934.1 of Empowerment of Persons with
Sourc ce: Union Budget; ExpendituE
Disabilities
ure profilee
has allocated Rs. 1204.90
crores; Ministry of Tribal Affairs has
allocated Rs. 6894.96 crore; Ministry
Source: Union Budget; Expenditure profile 2019-20 The Noda al Ministrries dealiing with marginal groups viz. Ministry of
of ocated
MinorityRss.
Affairs hascrore,
allocated Rs.
Social Justice and Emp powermen nt has allo 8.885 c whhile the
nion Budget; Expenditure profile
Rs. 52884.82 crore for Tribal Sub- Depar rtment
The of Empower
present Government rment of the
over 4700
Persons with
w
crore
Disa
and Ministry
abilities ha
of Women and
as allocatted Rs.
present Plan,
Government
Rs. 136934.10over the
crore for last six
Women last years
1204.9 90years
six of
ofs;itsits
crores tenure
Ministry
tenure yhas has
of incurred
Triba incurred
Child
al Affairs
Development
has alloc
has allocated Rs.
cated Rs. 6894.96 crore;
29164.90 crore; in theand
Financial year
e/allocated Rs. 288279.4
empowerment crore
and Rs. 91644.29 croreforMinist
Scheduled
try of Min nority
expenditure/allocated Castes
Aff
fairs
Rs. Sub-Plan,
has
288279.4 allocated Rs.
d Rs.
2019-20
470
for
00 crore a
inclusive
Ministry of
development of
for welfare of Children. The total Wome crore nforand Ch hild Deve elopment has alloccated Rs. 29164.9
Rs. groups. 90 crore; in the
Scheduled Castes Sub-Plan,
crore for amount
Tribalallocated
Sub-Plan, in the Rs. 434607.3
Financial Rs. women
188839.7 crore empowerment
for Tribal Sub-Plan, and
their target
Financ cial year 2019-20
2 f inclusiive develo
for opment off their targ get groups.
rore for Year
welfare and
2019-20 development
for marginal sections isof Children in total Rs. 1272534 crore
pent or allocated
Rs. 229289.94for various schemes
crores. Chart:
Chart being 3 Indicates
t: 3 Indic implemented the amount allocated
cates the amountfor
for the nodal ministries
marginal
allocatedd for the nodal m
in the
ministries in the
India. Chart: 2 Percentage of amount
spent/allocated for social groups in ϯϱ͕ϬϬϬϬ͘ϬϬ
last 6 years Ϯϵϭϲϰ͘ϵ
ctuals RE and BE for marginal groups in the last six years of present
ϯϬ͕ϬϬϬ
Ϭ͘ϬϬ D/o Social Justice &
Empowerrment
t. Ϯϱ͕ϬϬϬ
Ϭ͘ϬϬ D/o Emp
powerment off
eaker between 2014-15 to 2017-18 SCSP
S
22%
and RE&BE for 2018-19 and 2019-20, Rs. in Crore Persons with w Disabilities
ϮϬ͕ϬϬϬ
Ϭ͘ϬϬ
Budget for Children
Actual Expenditure
28% incurred RE BE Grand M/o Tribal Affairs
ϭϱ͕ϬϬϬ
Ϭ͘ϬϬ total in
six yearsM/o Minoority Affairs
2014-15 2015-16 2016-17
TSP 2017-18
ϭϬ͕ϬϬϬ
Ϭ͘ϬϬ ϴ2018-19
ϴ͕ϴϴϱ͘ϬϬ 2019-20
14% ϲϴϵϰ͘ϵϲ
b- Gender Budget
36%
B
% ϰ
ϰϳϬϬ
Ministry of Women an nd
Child Devvelopment
30035.07 30603.70 34333.67 49492.31
ϱ͕ϬϬϬ
Ϭ͘ϬϬ 62473.86 81340.74 288279.4
ϰ͘ϵ
ϭϮϬϰ Linear (D
D/o Social Ju
ustice
19920.72 21216.54 21810.56 31913.72 41093.33 52884.82 188839.7 & Empow werment)
Ϭ
Ϭ͘ϬϬ
79257.87 96331.83* 71817.96* 92883.74 125531.58 136934.10 434607.3
ϮϬϭϵͲϮϬ
urc 64635.09*
ce: Union Budget; 66248.62*
Source:Expenditu
EUnion Budget; e 117221.47
Expenditure
ure profile profile 70705.81 81235.63 91644.29 360807.2
2014-15 to 2019-20 Source:
Sourcce:Union
UnionBudget; Expenditure
Budget; E
Expendituprofile 2019-20
ure profile e
s
The 129213.7
Nodaal Ministrries51820.24
dealiing with marginal
173365.7 groups viz. Ministry of 310334.4
244995.6 362804 1272534
cial Justice and Emp powermen
Table-1 Actuals
nt has allo
REs.and
ocated Rs
BEcrore,
8.885 c
for marginal
The
wh
hile the
groups in the last six
totall amountt allocated
years ofe present
d for the margina
Government
al section
ns in the Union
e concerned Financial Year
parrtment of Empowerrment of Persons with w Disa
abilities haas allocat
Budge etted Rs. 0 is Rs. 50,849.76
2019-2 6 crore, while
w the Ministry of Wome en and
Funds spent for weaker between 2014-15 to 2017-18 and RE&BE for 2018-19 and 2019-20, Rs. in Crore
nion Budget; Expenditure profile
04.9 90 croress; Ministry y of Triba
al Affairs has alloccated Rs. 6894.96 crore;
nisttry of Min nority Afffairs has allocatedd Rs. 470 00 crore Actual
a
and Mini stry of
Expenditure incurred RE BE Grand total
men and Ch Ministry/Deptt.
hild Deveelopment has alloc cated Rs. 29164.9 90 crore; in the in six years
nanc cial year 2019-20
2 f inclusiive develo
for opment off their targ
get group s.
ercentage of amount spent/allocated for social groups in last 6 years
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
artt: 3 Indic
cates the amount
Scheduled Castesallocated
d for the30035.07
Sub-Plan nodal m
ministries in the
30603.70 34333.67 49492.31 62473.86 81340.74 288279.4
ion Budget 2019-20
2 Tribal Sub-Plan 19920.72 21216.54 21810.56 31913.72 41093.33 52884.82 188839.7
ϱ͕ϬϬϬ
Ϭ͘ϬϬ
Gender Budget 79257.87 96331.83* 71817.96* 92883.74 125531.58 136934.10 434607.3
Ϯϵϭϲϰ͘ϵ
Ϭ͕ϬϬϬ
Ϭ͘ϬϬ D/o Social Justice &
Budget for Children 64635.09*
Empowerrment 66248.62* 117221.47 70705.81 81235.63 91644.29 360807.2
ϱ͕ϬϬϬ
Ϭ͘ϬϬ
Year wise total funds for D/o Emppowerment off
Persons with
w Disabilities
Ϭ͕ϬϬϬ
Ϭ͘ϬϬ Social Inclusion 129213.7 51820.24
M/o Tribal Affairs
173365.7 244995.6 310334.4 362804 1272534
ϱ͕ϬϬϬ
Ϭ͘ϬϬ * RE of the concerned Financial Year M/o Minoority Affairs
Ϭ͕ϬϬϬ
Ϭ͘ϬϬ ϴ Source:
ϴ͕ϴϴϱ͘ϬϬ Union Budget; Expenditure profile 2014-15 to 2019-20
ϲϴϵϰ͘ϵϲ Ministry of Women an
nd
ϰ
ϰϳϬϬ Child Devvelopment
ϱ͕ϬϬϬ
Ϭ͘ϬϬ
ϰ͘ϵ
ϭϮϬϰ Linear (D
D/o Social Ju
ustice
Ϭ
Ϭ͘ϬϬ
70 & Empow werment) YOJANA August 2019
ϮϬϭϵͲϮϬ
urc
ce: Union Budget; Expenditu
E ure profile
e
The totall amountt allocated

d for the
e margina ns in the Union
al section
Table: 2 Funds spent for weaker sections between 2014-15 to 2017-18 and RE&BE for 2018-19 and 2019-20
Rs. in crore
Ministry/Deptt. Actual Expenditure incurred RE BE Grand total
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 in six years
D/o Social Justice & Em- 5330.95 5752.74 6516.09 6747.02 9963.25 8,885.00 43195.05
powerment
D/o Empowerment of Per- 337.84 554.97 772.56 922.47 1070.00 1204.90 4862.74
sons with Disabilities
M/o Tribal Affairs 3831.95 3654.86 4816.92 5316.63 6000.00 6894.96 30515.32
M/o Minority Affairs 3069.01 4479.88 2832.46 4057.18 4700.00 4700.00 23838.53
Ministry of Women and 18436.18 17248.72 16873.52 20396.36 24758.62 29164.90 126878.3
Child Development
marginalised
Year wise total funds for
31005.93 communities
31691.17 percentage
31811.55 37439.66 wise distribution
46491.87 50,849.76 of funds
229289.9can be see
Social Inclusion
n has got an allocation of 57% ofbelow.
funds followed by Ministry of Social
Source: Unionand
and Empowerment Budget; Expenditure
Ministry profile Affairs.
of Tribal 2014-15 to 2019-20
Chart: 4 The percentage Chart: 5 Indicates

of funds allocated for nodalthe percentage of funds
Chart: 5 Indicates spent/spending
the percentage in the last
of funds spent/
4 The percentage of funds
Ministries allocated
dealing withyearsforand
marginalnodal Ministries
sections in the dealing with
the current year spending
for their target
in the last 5groups.
years and the current year for
al sections in the Union Union
Budget 2019-20
Budget 2019-20 their target groups
D/oSJE D/o SJE D/o EPwD

18% D/o EPwD 19%
2% 2%
M/o TA M/o TA
14% M/oWCD
M/o WCD 13%
57% 55%
M/o
MOMA M/o MA
9% 11%
Source: Union Budget; Expenditure profile 2019-20 Source: Union Budget; Expenditure profile 2014-15 to 2019-20
: Union Budget; Expenditure profile Source: Union Budget; Expenditure profile
The total amount allocated for the distribution of funds can be seen to become US$5 trillion economy in
he last six years
marginalfunds allocated
sections for nodal
in the Union BudgetMinistries/Departments
below. the world by active contribution of
d in achieving social
2019-20 inclusion
is Rs. 50,849.76iscrore, The implementing Ministries/Departments
as follows:
while are mainly
marginal communities focusing on th
in economic
The implementing Ministries/ growth.
the Ministry of Women and inclusive development of their target groups in convergence with other lin
Children
has got an allocation of 57 per cent of Departments are mainly focusing on
Ministries to inclusive
the ensuredevelopment
“No one ofleft their behind”
Referencesand achieve the Sustainab
2 Funds spent for weaker
funds followed sectionofbetween
by Ministry Social 2014-15 to 2017-18 and
Justice
E for 2018-19 andand2019-20,
Empowerment and Development
Ministry target Goals (SDGs) by providing adequate resources throug
groups in convergence with other
of Tribal Affairs. line Ministries to ensure “No one left 1. India@75, Strategy document of
budgetary behind” interventions.
and achieve the The Crore implementing
Rs.Sustainable
in NITI Aayog Ministries/Departmen
Grand
ptt.
Actualthe
Over Expenditure continue to strive to ensure total
last six incurred
years, funds D e vRE
e l o p m e n BE
t G o a l sdirect
( S in and 2.
D G s ) quantifiable
Union Budgetbenefits
2015-16 toare 2019-delivered
allocated for nodal Ministries/ by providing adequatesixresources years 20, Expenditure Profile
2014-15 2015-16 2016-17 the 2017-18
target groups,
2018-19 so that the objective of Social Inclusion is achieved a
2019-20
Departments engaged in achieving through budgetary interventions. The
e&
social inclusion
5330.95 5752.74 is as follows:
6516.09
visualised
6747.02
by9963.25
the Prime
implementing Minister
Ministries/Departments
8,885.00 43195.05
of India.
3. This
Economicwould definitely
Survey 2019-20 lead India t
In total all these Centralbecome Ministries US$5

nt of
continuetrillion
to strive toeconomy
ensure direct in and the world Estimates
4. Poverty by active contribution
2004-05 &
bilities 337.84 554.97 772.56 922.47 quantifiable
1070.00 benefits1204.90are delivered
4862.74 to
have spent/spending Rs. 2,29,289.94 marginal communities in economic growth. 2011-12, Planning Commission
3831.95 3654.86 4816.92 5316.63 the 6000.00
target groups, so that
6894.96 the objective
30515.32
crore for welfare, empowerment References: of Social Inclusion is achieved as 5. Census 2011 q
irs 3069.01 4479.88
and development of2832.46
marginalised4057.18 4700.00 4700.00
visualised by the Prime Minister of
23838.53
n and c o m m u n i t i e s p e r c e n t a g e 1.
w iIndia@75,
s e India. This Strategy document of NITI Aayog;
24758.62 would definitely lead India (Email: mraju.sb@gov.in; chaitra.d@nic.in)
nt 18436.18 17248.72 16873.52 20396.36 29164.90 126878.3
unds
2. Union Budget 2015-16 to 2019-20, Expenditure Profile;
ion 31005.93
YOJANA31691.17 31811.55 3.
August 2019 Economic
37439.66 Survey
46491.87 2019-20;
50,849.76 229289.9 71
: Union Budget; Expenditure profile 4. Poverty Estimates 2004-05 & 2011-12, Planning Commission; and
5. Census 2011
n total all these Central Ministries have spent/spending Rs.
renewable resources
sustainability
Power for All and Energy Security

Manoj Kumar Upadhyay
nergy is a key indicator estimated to be roughly about 300 the same amount of power at current
level of efficiencies.
E
of the living standards of billion tonnes. It has been the mainstay
citizens of any country and of the Indian electricity system so
instrumental in raising it. far and is likely to remain so in the Oil and Gas
The correlation between immediate future as well. Due to the As far as oil and gas is concerned,
per capita consumption vast availability of this fuel source, these resources in India are not
of electricity (a proxy for all energy it could remain the cheapest source adequate to meet its growing
forms) and Human Development Index of energy for India for a long time, requirement. Of the two, the price
(HDI), makes it the fundamental input if explored and used efficiently. It of oil has been much more volatile,
to any economic activity. Despite is the only energy source for which where the slightest increase puts
accounting for 18 per cent of the India is not dependent on imports tremendous pressure on the economy.
world’s population, India uses only (except coking coal used for steel Compared to oil, gas is cheaper and
around 6 per cent of the world’s making). The import of thermal coal more environment friendly. Though
can also be reduced to zero if a proper oil comprises 29 per cent of total
primary energy. The four primary
policy framework for exploration- primary commercial energy mix and
sources of energy are coal, oil, gas
cum-mining for commercial use is gas only 7 per cent, it is imperative
and renewable energy. Out of the four,
put in place. Coal is however not an that India’s dependence on oil and
India is well endowed in coal as well
environment friendly fuel compared gas as a source of energy is reduced to
as renewable energy sources including
to renewable energy and is likely the extent possible by encouraging a
bio-energy. to lose out in the long run. Though switch to other forms of energy, such
Coal when compared to renewable energy, as electricity which can be derived
particularly solar energy, thermal from renewable sources. Even then,
From an availability perspective, power plants take up only about 1/50th India would have to remain dependent
coal reserves in India have been of the land required for generation of on import for oil, as it cannot meet its
requirement from local sources. Our
endeavour in this regard necessitates
putting in place a policy framework
that limits the consumption of oil and
gas, especially oil, while encouraging
exploration and production of liquid
and gaseous hydro-carbon to meet
requirements indigenously as far as
possible. The prices of domestically
produced oil and gas would have
to necessarily remain linked with
The prices of renewable sources,

particularly solar and wind, have
been reducing drastically and are
now almost at par with electricity
generated using coal.
The author is Deputy Advisor, NITI Aayog, Government of India.

7RWDO*HQHUDWLRQ&DSDFLW\)XHO:LVHDQG6HFWRU:LVH$SULO
the international prices due to large Total Generation Capacity- Fuel Wise and Sector Wise- April, 2019
import dependency which is likely to
continue for a long time.
Renewable Energy
The third source is renewable
energy from solar, wind, biomass,
hydro and more such sources. It is
also the most environment friendly.
Fortunately, being located in the tropics
endows us with virtually unlimited
potential of solar and wind energy. The
huge availability of biomass sources
in the form of crop residue, cattle
dung, human waste and food waste, Nuclear Energy The share of renewables in total
also present large scale opportunities Nuclear energy also constitutes
8QLRQ%XGJHW3RZHU6HFWRU
generation has increased from
for biomass based energy production. a significant part of the energy and 6 per cent in 2014-15 to 10 per
The prices of renewable sources, electricity mix. However, unless the
8QLRQ%XGJHWDOORFDWHV5VFURUHIRUSRZHUVHFWRUIRUWKLVILQDQFLDO\HDUZKLFKLVKLJKHUWKDQ
cent in 2018-19. India has been
particularly solar and wind, have cost of nuclear
5V reactors is
FURUH LQ FRPSDULVRQ WR controlled
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significantly, electricity generated undertaking one of the world’s
been reducing drastically and are now FURUH DQG SHWUROHXP VHFWRU 5V fromFURUH IRU WKLV ILQDQFLDO \HDU 7KH 8QLRQ %XGJHW IRU
almost at par with electricity generated nuclear reactors may not be as cost- largest renewable energy expansion
SRZHUVHFWRUIRFXVRQHOHFWULFLW\DFFHVV)ROORZLQJVDUHPDMRUDQQRXQFHPHQWLQWKHEXGJHW
using coal. However, the issue with effective as energy from renewable programmes in the world.
renewable energy is its volatility, sources. Government
(QHUJ\$FFHVV may consider
uncertainty and seasonality. Further, budgetary support for non-electricity at a significant cost) and undergo
7KH *RYHUQPHQW KDV
components. FRQWLQXHGa LWV
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liquid RQ HQHUJ\ DFFHVV E\ VHWWLQJ D WDUJHW RI SURYLGLQJ DQ
solar energy, though at par with thermal regasification.
electricity in terms of cost, requires produced from natural gas or coal,
HOHFWULFLW\FRQQHFWLRQDQGDFFHVVWRFOHDQFRRNLQJIXHOWRDOOUXUDOKRXVHKROGVLQWKHFRXQWU\H[FHSW
more than 50 times the land to generate has ZKR
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DUH XQZLOOLQJ ,W FODLPHG WRalter Energy
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the same quantum of electricity as the way gas or coal is used. Methanol
6DXEKDJ\DDQGJLYHQRXWFURUHV/3*F\OLQGHUVXQGHU8MMZDODVFKHPH
I m p r o v e d e n e r g y s e c u r i t y,
from thermal power plants. This can extracted from natural gas is likely
to bringWKHdown transportation costs normally associated with reduced
become a limiting factor, even though +RZHYHU FKDOOHQJH LQ HQHUJ\ DFFHVV LV QRW MXVW RI FRQQHFWLRQ EXW RI DFFHVVLELOLW\ DQG
compared to gas, which needs to dependence on imports, is also an
rooftops and farm land offer a solution. DIIRUGDELOLW\
Yet, while the issue of volatility be liquefied, transported in liquid important goal of the policy. Today,
and uncertainty is being addressed )RFXV
formRQatUXUDO
veryHQHUJ\
low DFFHVV (and 1HZIndia
DQG IDUPHUV
temperature is heavily dependent on oil
8MMZDODW\SH VFKHPH WKDW ZLOO SURPRWH VRODU
by a number of economical storage VWRYHV DQG EDWWHU\FKDUJHUV 3ULYDWHLQLWLDWLYHVZLOO EH VXSSRUWHGWR GHYHORS UHQHZDEOH HQHUJ\DVDQ
solutions, the problem of seasonality DOWHUQDWHVRXUFHRILQFRPHIRUIDUPHUV
may still limit the full exploitation of
this source. For this, the conversion )RFXV RQ GLVWULEXWLRQ UHIRUPV 3HUIRUPDQFH RI 8MZDO ',6&20 $VVXUDQFH <RMDQD 8'$< LV
of solar energy into hydrogen and EHLQJH[DPLQHG
methanol would have to be seriously
5HQHZDEOH(QHUJ\7KHUHQHZDEOHHQHUJ\LQGXVWU\H[SHFWHGWKH%XGJHWWRSURYLGHVRPHLPSHWXVWR
researched and made viable.
UHYLYHJURZWK+RZHYHUWKHUHLVQRWKLQJVSHFLILFLQWKH%XGJHWLQWKLVUHJDUG
Bio-Energy
Bio-energy can play a major role
in strengthening the energy basket
of India. Biogas derived from cattle
dung, human waste and vegetative
waste, can, to a very large extent,
provide cooking solutions which are
cheap and environment friendly. Being
cheaper, locally available and much
more environment friendly, it has the
potential to replace LPG in rural areas.
Biomass can also become the source of
bio-fuel which would help in reducing
the requirement of petroleum oil.

sector focus on electricity access.
Followings are major announcement
in the budget:
Energy Access
The Government has continued its
focus on energy access by setting a target
of providing an electricity connection
and access to clean cooking fuel to all
rural households in the country (except
those who are unwilling). It claimed to
already have connected 99 per cent of
the households under Saubhagya and
given out 7 crores LPG cylinders under
Ujjwala scheme.
However, the challenge in energy
access is not just of connection but of
accessibility and affordability.
Focus on rural energy access and
farmers: New Ujjwala-type scheme
that will promote solar stoves and
and gas imports and also imports India improved its ranking in the battery chargers. Private initiatives
coal. Energy security of the country Energy Transition Index published will be supported to develop renewable
could be undermined if imports are by World Economic Forum (76th energy as an alternate source of income
disrupted. It can be enhanced through position). Its installed capacity has for farmers.
both, diversification of import sources increased from 3,44,002 MW in 2018
and increased domestic production, to 3,56,100.19 MW in 2019. Total Focus on distribution reforms:
and reduced requirement of energy. generation of energy during 2018- Performance of Ujwal DISCOM
Given the availability of domestic 19 was 1376 BU (including imports Assurance Yojana (UDAY) is being
reserves of oil, coal and gas and the and renewable sources of energy). examined.
prospects of their exploitation at Along with generation capacities, Renewable Energy: The renewable
competitive prices, there is a strong transmission and distribution capacities energy industry expected the Budget
case for reduced dependence on have made a huge progress. The to provide some impetus to revive
imports. In due course, we may also capacity of thermal power is 64 per cent growth. However, there is nothing
consider building strategic reserves as followed by renewable energy. 46 per specific in the Budget in this regard.
insurance against imported supplies. cent of power generation comes from
When it comes to power sector,
private sector.
In India, access to energy for the budget focused on structural
all at rational prices is of utmost The share of renewables in total and tariff policy reforms to improve
importance. As of June 2, 2019, generation has increased from 6 per distribution sector efficiency. The
the access to electricity has been cent in 2014-15 to 10 per cent in priority is well placed, as distribution
substantially improved with a 2018-19. India has been undertaking sector efficiency is at the core of all
household electrification percentage one of the world’s largest renewable power sector challenges including
energy expansion programmes in 24x7 power supply, generation sector
of 99.99 per cent. Providing clean,
the world. stress, including inadequate demand
non-polluting cooking fuel in the form
for renewable energy. This is a massive
of LPG, to nearly 139 million people challenge for the Government. Going by
Union Budget 2019: Power Sector
who are still dependent on biomass past experience, improving distribution
for cooking is also expected within Union Budget allocates Rs.16400.57 sector’s efficiency requires broader
a reasonable time frame. While it is crore for power sector for this financial structural reforms, such as carriage
envisaged that financial support to the year which is higher than Rs.1988.02 and content separation proposed
vulnerable sections will be extended crore in comparison to last financial in the Electricity Act amendment.
to ensure that they make the switch, it year. The MNRE sector get allocated Meanwhile, a key area that also
is hoped that competitive prices will Rs. 4653.45 crore and petroleum sector needs dedicated attention is solar
also drive affordability to meet the Rs. 38982.05 crore for this financial rooftop. q
above aims. year. The Union Budget 2019 for power (E-mail: mk.upadhyay@nic.in)

YE-1212/2019

financial gains
services
Comprehensive Reform for Banking Sector

Shishir Sinha
he need of the hour is to Scheduled Commercial Banks
T
boost both consumption
and investment demand
Scheduled Commercial Banks The Budget speech emphasised
and this necessitates
(SCBs) and especially Public that financial gains from cleaning
Sector Banks are passing through of the banking system are now
strengthening the
transformation. Credit growth is in
entire banking sector
double digit for last two successive amply visible. NPAs of commercial
which comprises mainly scheduled
years (13.34 per cent in 2018-19 and banks have reduced by over Rs.
commercial banks and Non-Banking 10.42 per cent in 2017-18). At the 1 lakh crore over the last year,
Financial Companies (including
housing finance companies). The
same time as a result of Government's record recovery of over Rs. 4
4R's strategy of recognition, resolution,
Union Budget 2019-20 has tried recapitalisation and reforms, Non-
lakh crore due to Insolvency and
to provide impetus for all three. Performing Assets (NPA) of all SCBs Bankruptcy Code (IBC) and other
Most important aspect is that the (public and private) has declined by Rs. measures have been effected
provisions contained in the budget 1,02,562 crore to Rs. 9,33,625 crore as over the last four years, provision
address liquidity and regulation on 31st March, 2019.
issues together, thus ushering coverage ratio is now at its
comprehensive reform in the entire According to RBI’s Financial highest in seven years, and
banking sector. Stability Report (FSR), published in domestic credit growth has risen
to 13.8 per cent. Government has
smoothly carried out consolidation,
reducing the number of Public
Sector Banks by eight. At the
same time, as many as six Public
Sector Banks have been enabled
to come out of Prompt Corrective
Action framework.
June, 2019, growth of gross NPA has

decelerated across all bank groups,
including Public Sector Banks
(PSBs). Now, due to regulatory
mechanism for recognition of
stressed assets, NPAs declined to 9.3
per cent in March 2019. The report
has projected further decrease in the
gross NPA ratio of all Scheduled
Commercial Banks to 9 per cent by
next March, driven by a decline in
the gross NPA ratios of PSBs to 12
per cent from 12.6 per cent during
this period.
The author is a Senior Journalist with Hindu Business Line.

The Budget speech emphasised
that financial gains from cleaning
of the banking system are now
amply visible. NPAs of commercial
banks have reduced by over Rs.1
lakh crore over the last year, record
recovery of over Rs. 4 lakh crore
due to Insolvency and Bankruptcy
Code (IBC) and other measures have
been effected over the last four years,
provision coverage ratio is now at its
highest in seven years, and domestic
credit growth has risen to 13.8 per
cent. Government has smoothly
carried out consolidation, reducing Public Sector Banks NBFCs Housing Finance
the number of Public Sector Banks (Registered under various Companies (State
by eight. At the same time, as many Regional Offices of RBI) wise, registered under
as six Public Sector Banks have National Housing
been enabled to come out of Prompt Bank)
Corrective Action framework.
1. Allahabad Bank Ahmedabad (Gujarat, Andhra Pradesh 1
As per RBI guidelines, banks and UTs of Daman
are required to maintain a minimum 2. Andhra Bank and Diu, Dadra and Nagar Delhi 19
Capital to Risk-weighted Assets Haveli) 253
3. Bank of Baroda
Ratio (CRAR) of 9 per cent on an Gujarat 5
Bangalore (Karnataka) 133
ongoing basis. As on March 31, 4. Bank of India
2019, all Public Sector Banks (PSBs) Bhopal (Madhya Pradesh Haryana 3
and Private Sector Banks meet this 5. Bank of Maharashtra and Chhattisgarh) 103
Bhubaneswar (Odisha) 20 Karnataka 5
minimum CRAR requirement. As
6. Canara Bank Kolkata (Sikkim, West Bengal
per FSR, as on March 31, 2019, the
and UT of Andaman and Kerala 2
CRAR, for Scheduled Commercial 7. Central Bank of India Nicobar Islands) 4,541
Banks (which include both PSBs
8. Corporation Bank Chandigarh (Himachal Madhya Pradesh 1
and Private Sector Banks) and PSBs
Pradesh, Punjab and UT
was 14.3 per cent and 12.2 per cent
9. Indian Bank of Chandigarh) 215 Maharashtra 40
respectively.
Chennai (Tamil Nadu
Apart from capital infusion by 10. Indian Overseas Bank and UT of Puducherry) 331 Manipur 1
the Government, PSBs source capital New Delhi (Haryana
11. Oriental Bank of
through internal capital generation and and NCT Delhi) 2,013 Mizoram 1
Commerce
mobilisation of capital from markets. In Guwahati (Arunachal Pradesh,
fact, capital infusion by the Government 12. Punjab & Sind Bank Assam, Manipur, Meghalaya, Rajasthan 6
complements PSB’s internal capital Mizoram, Nagaland and
generation and mobilisation of capital 13. Punjab National Bank Tripura) 118 Tamil Nadu 15
from markets. During 2008-09 to Hyderabad (Andhra Pradesh
14. State Bank of India and Telangana) 155 West Bengal 2
2018-19, Government infused Rs.
3,15,721 crore in PSBs while during Jaipur (Rajasthan) 198
15. Syndicate Bank
the same period they mobilised Jammu (Jammu and
Rs. 2,81,616 crores of capital through 16. UCO Bank Kashmir) 32
other sources and posted net profit Kanpur (Uttar Pradesh
17. Union Bank of India and Uttarakhand) 143
of Rs. 98,373 crores, of which a
Mumbai (Maharashtra
sizeable proportion has contributed 18. United Bank of India and Goa) 1,214
to internal capital generation. Now,
Patna (Bihar and Jharkhand) 35
PSBs can leverage capital infusion
Thiruvananthapuram (Kerala
by the Government for more capital
and UT of Lakshadweep) 139
generation and in turn push credit
growth. Total 9,643 Total 101

RBI Governor, Mr. Shaktikanta Das,
feels that the provision of Rs. 70,000
crore of additional recapitalisation is
a very positive development because
it not only enables banks to maintain
the capital they need to comply with
the regulatory requirements, but it will
also give enough capital to the banks
to step up their lending and credit
disbursement. It will auger well for
the banking system. Experts hope that
PSBS are likely to see a turnaround
in profitability given that most of the
pain has been recognised and NPAs
and credit costs are peaking out. This
will lead to an improvement in return
ratios. even if his/her account is with another Government by highlighting the fact
PSB. This is similar to what is presently that till March 2020, Rs. 4.75 trillion
According to a research report available among branches of one bank of bonds and papers of NBFC sector
by State Bank of India, additional and through ATMs of various banks. are set to mature. Default means more
capital is likely to lay the basis for One can check his/her balance from NPA for banks and bad name for the
growth capital during current fiscal i.e. ATM of different bank where he/she financial sector.
2019-20 or FY20. “Assuming a 12-13 does not have an account. Now, the
per cent credit growth in FY20 with same thing will be made available at Recognising need for urgent
credit risk weighted assets of 70 per branch level. attention, the b udget proposed
cent, PSBs may be requiring around mechanism for liquidity and also change
Rs. 50,000 crore growth capital in New provision will also give in regulations. The Union Finance
FY20,” it said. However, as stated persons control over who deposits Minister said that for purchase of high-
in the report, this requirement also money in their accounts or even also rated pooled assets of financially sound
depends upon some major variables i.e. may allow them to authenticate before NBFCs, amounting to a total of Rs. 1
alternate long-term investor, recoveries receiving payments. All these will lakh crore during the current financial
from NCLT (National Company Law become clear once RBI releases the year, Government will provide one
Tribunal), investment environment, road map to implement the budget time six months partial credit guarantee
announcement. to Public Sector Banks for first loss of
out of NCLT settlements/auctions,
up to 10 per cent. Later in the evening,
treasury gains/loss, MTM (Mark-to- Non-Banking Financial Companies RBI announced window to facilitate
Market) provisioning of investments (NBFCs) banks in providing liquidity worth
and additional or provision write-
Rs. 1.34 lakh crore for the NBFCs.
back. Nearly 1000 NBFCs, registered with
RBI, are key for consumption growth. Technically speaking, RBI is the
The budget also talks about a According to the latest Economic regulator for NBFCs but it has limited
new way to do banking for common Survey, these institutions bring in regulatory authority. Keeping this in
citizens. This is called interoperability diversity and efficiency to the financial mind, the budget also proposed more
of services for account holders across sector and make it more responsive powers to RBI for regulating NBFCs.
PSU banks. “To further improve ease to the needs of the customers. In the The Finance Bill prescribed additional
of living, they will leverage technology, recent past, the NBFCs have played an powers for RBI (which is referred as
offering online personal loans and increasingly important role in resource Bank in the bill), important of them
doorstep banking, and enabling mobilisation and credit intermediation, are as follows:
customers of one Public Sector Bank thereby helping commercial sector to
to access services across all Public make up for low bank credit growth. l Where the Bank is satisfied that in
Sector Banks,” The Finance Minister These institutions depend largely on the public interest or to prevent the
said that the Government will initiate public funds which account for 70 per affairs of a Non-Banking Financial
steps to empower accountholders to cent of total liabilities of the sector. Company being conducted in a
remedy the current situation in which Bank borrowings, debentures and manner detrimental to the interest
they do not have control over deposit of commercial paper are the major sources of the depositors or creditors, or
cash by others in their accounts. of funding for NBFCs. financial stability or for securing
the proper management of such
This means one can walk into a SBI’s research report highlighted company, it is necessary so to do,
branch of a PSB and avail the services, the need for more intervention by the the Bank may, by order and for

reasons to be recorded in writing, l The Bank may, if it is satisfied, Non-Banking Financial Company
remove from office, a Director (by upon an inspection of the Books that are critical to the functioning
whatever name called) of such of a Non-Banking Financial of the financial system)”.
company, other than Government Company that it is in the public
owned Non-Banking Financial l The Bank may, at any time, direct a
interest or in the interest of
Company with effect from such financial stability so to do for Non-Banking Financial Company
date as may be specified in the said enabling the continuance of the to annex to its financial statements
order. activities critical to the functioning or furnish separately.
l Where the Bank is satisfied of the financial system, frame Housing Finance Companies
that in the public interest or to schemes which may provide for
prevent the affairs of a Non- any one or more of the following, These finance companies are
Banking Financial Company being namely:- (a) amalgamation with dedicated NBFCs for specific sector.
conducted in a manner detrimental any other non-banking institution; As of now, over 100 HFCs are regulated
to the interest of the depositors or (b) reconstruction of the Non- and refinanced by National Housing
creditors, or of the Non-Banking Banking Financial Company; Bank. Growth and performance
Financial Company (other than (c) splitting the Non-Banking of these companies are critical for
Government Company), or for Financial Company into different housing industry. According to
securing the proper management units or institutions and vesting the budget speech, it is somewhat
of such company or for financial viable and non-viable businesses conflicting that a regulator is also
stability, it is necessary so to do, in separate units or institutions refinancer and lender. Accordingly,
the Bank may, for reasons to be to preserve the continuity of the the Union Finance Minister in her
recorded in writing, by order, activities of that Non-Banking budget speech, proposed to return
supersede the Board of Directors Financial Company that are critical the regulation authority over to the
of such company for a period not to the functioning of the financial housing finance sector from NHB to
exceeding five years as may be system and for such purpose RBI. However, NHB will continue
specified in the order, which may establish institutions called “Bridge to be supervising authority for the
be extended from time to time, Institutions (temporary institutional housing finance companies. q
so that the total period shall not arrangement to preserve the
(E-mail: hblshishir@gmail.com)
exceed five years. continuity of the activities of a
YE-1188/2019

Rural India
The Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman presented the Union Budget 2019-20
before the Parliament. The key highlights related to Rural India from the Union Budget 2019-20 are as follows:
Grameen Bharat / Rural India
 Ujjwala Yojana and Saubhagya Yojana have transformed the lives of every rural family, dramatically improving
ease of their living.
 Electricity and clean cooking facility to all willing rural families by 2022.
 Pradhan Mantri Awas Yojana – Gramin (PMAY-G) aims to achieve “Housing for All” by 2022:
 Eligible beneficiaries to be provided 1.95 crore houses with amenities like toilets, electricity and LPG connections
during its second phase (2019-20 to 2021-22).
 Pradhan Mantri Matsya Sampada Yojana (PMMSY)
 A robust fisheries management framework through PMMSY to be established by the Department of Fisheries.
 To address critical gaps in the value chain including infrastructure, modernization, traceability, production,
productivity, post-harvest management, and quality control.
 Pradhan Mantri Gram Sadak Yojana (PMGSY)
 Target of connecting the eligible and feasible habitations advanced from 2022 to 2019 with 97% of such
habitations already being provided with all weather connectivity.
 30,000 kilometers of PMGSY roads have been built using Green Technology, Waste Plastic and Cold Mix
Technology, thereby reducing carbon footprint.
 1,25,000 kilometers of road length to be upgraded over the next five years under PMGSY III with an estimated
cost of Rs. 80,250 crore.
 Scheme of Fund for Upgradation and Regeneration of Traditional Industries’ (SFURTI)
 Common Facility Centres (CFCs) to be setup to facilitate cluster based development for making traditional
industries more productive, profitable and capable for generating sustained employment opportunities.
 100 new clusters to be setup during 2019-20 with special focus on Bamboo, Honey and Khadi, enabling 50,000
artisans to join the economic value chain.
 Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship’ (ASPIRE) consolidated.
 80 Livelihood Business Incubators (LBIs) and 20 Technology Business Incubators (TBIs) to be setup in 2019-
20.
 75,000 entrepreneurs to be skilled in agro-rural industry sectors.
 Private entrepreneurships to be supported in driving value-addition to farmers’ produce from the field and for those
from allied activities.
 Dairying through cooperatives to be encouraged by creating infrastructure for cattle feed manufacturing, milk
procurement, processing & marketing.
 10,000 new Farmer Producer Organizations to be formed, to ensure economies of scale for farmers.
 Government to work with State Governments to allow farmers to benefit from e-NAM.
 Zero Budget Farming in which few states’ farmers are already being trained to be replicated in other states.
 India’s water security
 New Jal Shakti Mantralaya to look at the management of our water resources and water supply in an integrated
and holistic manner
 Jal Jeevan Mission to achieve Har Ghar Jal (piped water supply) to all rural households by 2024
 To focus on integrated demand and supply side management of water at the local level.
 Convergence with other Central and State Government Schemes to achieve its objectives.
 1592 critical and over exploited Blocks spread across 256 District being identified for the Jal Shakti Abhiyan.
 Compensatory Afforestation Fund Management and Planning Authority (CAMPA) fund can be used for this
purpose.
 Swachh Bharat Abhiyan
 9.6 crore toilets constructed since October 2, 2014.
 More than 5.6 lakh villages have become Open Defecation Free (ODF).
 Swachh Bharat Mission to be expanded to undertake sustainable solid waste management in every village.
 Pradhan Mantri Gramin Digital Saksharta Abhiyan
 Over two crore rural Indians made digitally literate.
 Internet connectivity in local bodies in every Panchayat under Bharat-Net to bridge rural-urban divide.
 Universal Obligation Fund under a PPP arrangement to be utilized for speeding up Bharat-Net.
Source: PIB

YE-1193/2019

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PM ON UNION BUDGET 2019-20

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