The Indian finance minister, Arun Jaitley, on Monday announced a budget aimed at ensuring the benefits of growth were more widely shared, while reiterating that amidst slowdown in global growth and trade, the Indian economy has held its ground firmly.
Jaitley, delivering his second full-year budget since Indian Prime Minister Narendra Modi’s landslide election victory in May 2014, said fiscal deficit for financial year 2016-17 is targeted at 3.5 per cent.
The Finance Minister announced new rural aid and health programmes.
The Finance Minister vowed 100 per cent village electrification to be achieved by May, 2018.
He reiterated a forecast that the economy would grow by 7.6 per cent in the fiscal year that is drawing to a close.
Jaitley on Monday in the Indian Parliament listed $16 billion in government measures targeted at rural India, including spending on a job creation scheme, farmers’ welfare and building of rural roads.
He targeted a total of $130 billion in credit to farmers.
The Finance Minister also said India will not resort to retrospective taxation in the future.
T N Ninan, editor of Indian daily Business Standard, said it was heartening to hear the Finance Minister’s assurances on maintaining fiscal discipline.
“Budget speech has several references to the poor, none to the neo-middle class that was the govt’s earlier focus,” Ninan said.
An overhaul of economic data has propelled India to the top of the league of fast-growing major economies.
The stock market on Monday gave a thumbs down to the budget.
Immediately after the budget taxation proposal announcements were made, the Sensex crashed over 600 points and Nifty was down over 200 points.
Auto stocks fell steeply as Finance minister Arun Jaitley in his Union Budget 2016 speech on Monday proposed to increase the cess on passenger vehicles by up to 4 per cent.
Highlights of the budget for the fiscal year beginning April 1:
Plan expenditure seen at 5.5 trillion rupees in 2016/17
Looks to double farmer income by 2020
Rural jobs programme allocated 385 billion rupees ($5.61 billion) in 2016/17
Target of agriculture credit at 9 trillion rupees
Farmer welfare budget to total 359.84 billion rupees
Rural road development to get 190 billion rupees