3/1/2015 Budget201516insevenchartsTheHindu

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BusinessBudget

Budget201516insevencharts

RukminiS.

FinanceMinisterArunJaitley.Filephoto.

ThereweresomebignewdevelopmentsinSaturdaysbudget,butthestoriesemergedfromtheBudgetsfineprint,notthespeechinParliament.

1.ThebiggeststoryofthisBudgetisamajorchangeinthewaytheUnionGovernmentspendsitsmoney.Earlierthisweek,FinanceMinisterArunJaitleyannouncedthatthegovernmenthadacceptedtherecommendationsofthe14thFinanceCommissionandraisedtheStatesshareinthenetproceedsofuniontaxrevenuesfrom32percentto42percent.

WithmoreofitspiegoingdirectlytoStatestospendastheylike,theUnionGovernmentwouldbeginreducingitsallocationstotheStateplanandwindupsomeCentrallySponsoredSchemes.Thishasalreadyhappenedinthisbudget.

WhattheUnionGovtspendson

othernonplanexpensubsidiesdefenceinterestpaymentscentralplanplanassistancenonplanassistancestate'shareoftaxesan

201415 2015160%

25%

50%

75%

100%

ThemajorchangeisabigincreaseinStatesshareintaxesandduties,andabigdecreaseinplanassistancetoStatesandUTs.ThebottomthreecategoriesmakeuptransferstoStatesasaproportiontototalgovernmentspendingalltransferstoStatestakentogetherhaventgrown.

Inabsoluteterms,totaltransferstoStateshaveindeedgrown.

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3/1/2015 Budget201516insevenchartsTheHindu

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Transferstostates

AssistanceforCentralandCentrallySponsoredCentralAssistanceforState&UT(withLNonPlanGrants&LoansStates'shareoftaxesandDuties

201011

201112

201213 201314 201415 2015160

250000

500000

750000

1000000

Rs.

cro

re

2.WhatdoesthismeanforCentralGovernmentspendingonmajorwelfareministriesandkeysocialsectorschemes?ThecuthasbeenparticularlydramaticforsomethePanchayatiRajMinistryhasgonefromRs.7,000croreinlastyearsBudgetestimatestoRs3400croreintherevisedestimatestojustRs95croreinthisBudget,datacompiledbyYaminiAiyar,directorofAccountabilityInitiative,shows.

Allocationstoministries

PanchayatiRajDrinkingWaterandSanitationHealth&FamilyWelfareRuralDevelopmentWomen&ChildDeveEducation

201415BudgetEstimates

201415RevisedEstimates

201516BudgetEstimates

0

75000

150000

225000

300000

Rs.

cro

re

Ofcourse,themoneyhasntbeencutsotospeakmoremoneyhasgonetoStateswhicharenowfreertospendthemoneyastheychoose.Weshouldntcallitafall.ThemoneyhasgonetoStatesanditisuptothemtospenditonimportantsectorslikehealthandsanitation,anofficialoftheMinistryofDrinkingWaterandSanitationtoldTheHindu.

3.Wheredoesthisleavemajorofficialschemes?

Whichschemesgo,whichstay?

Woundup Onusnowonstatestofundagreater

share

Uniongovernmentwillfullyfund

0

10

20

30

40

No.

ofs

chem

es

SomehavebeencompletelywounduptheseincludetheBackwardRegionsGrantFunds,aschemeforthestrengtheningofpanchayats,aschemeforthemodernisationofpoliceforces,andtheNationaleGovernancePlan.Stateshavetodecidewhethertheywouldliketocontinuewiththeschemeornot.Foranadditional24schemes,States

3/1/2015 Budget201516insevenchartsTheHindu

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willnowhavetoshoulderagreaterburdenastheUnionGovernmenttakesastepback.TheseincludeflagshipschemesincludingtheSwachhBharatAbhiyaan,theNationalHealthMission,theRashtriyaMadhyamikShikshaAbhiyaan,theIntegratedChildDevelopmentScheme,theNationalAIDSandSTDControlProgrammeandtheRuralHousingscheme.Thirtyoneschemes,includingtheMahatmaGandhiNationalRuralEmploymentGuaranteeScheme(MGNREGS),theMidDayMealScheme,theSarvaShikshaAbhiyaanandscholarshipschemes,willremainfullyfundedbythecentralgovernment.

4.SpendingonDefencegrewalittleandspendingonsubsidiesfellalittlethegapbetweenthetwoasashareoftotalexpenditureisthesmallestithasbeeninawhile.

SubsidiesvDefence

Subsidiesasa%oftotalexpenditureDefenceasa%oftotalexpenditure

201011

201112

201213 201314 201415 20151610.00%

12.50%

15.00%

17.50%

20.00%

5.BorrowingsformnearlyaquarterofthegovernmentsreceiptsIndiasinternationallylowtaxGDPratiohasnotimprovedyet.

Governmentearnings

borrowingsandotherliabilitiescorporationtaxincometaxcustomsunionexcisedutiesservicetaxandothertaxesnontaxrevenuenondebtcapitalreceipts

24%

20%

10%

9%

10%

9%

14%

6.Theshareofschemesfocussedonwomeninthetotalbudgetisextremelylow,datacompiledbymycolleagueAjaiSreevatsanshows.Butashepointsout,moremoneyhasgonetotheStates,andpresumablytheyshouldbemakingtheirownwomenfriendlyschemes.

3/1/2015 Budget201516insevenchartsTheHindu

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Genderbudgeting

PercentageofGenderBudgettoTotalBudget

2005 2007 2009 2011 2013 20152.00%

3.10%

4.20%

5.30%

6.40%

7.Taxconcessionsandrelaxationsoncustomsdutyandexcisecollectivelyknownasrevenueforegonearemeanwhilealargeandgrowingamount,uptoRs5.89lakhcrorein201415.Exemptionsondiamondsandgoldarethebiggestcontributorstorevenueforegone.

RevenueForegone

CustomsdutyExciseDutyPersonalIncometaxCorporateIncometax

201011 201112 201213 201314 2014150

150000

300000

450000

600000

Rs.

cro

re

Toputthatnumberinperspective,thetotalrevenueforegonebyIndiaintaxexemptionsin201415wasmorethantheamounttheIndiangovernmentneededtoborrowfromthemarketinthislastyeartobeabletofullyfunditsbudget.

Keywords:Budget201516,revenueforegone,