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Decoding the Budget 2016

Reinforcing the credibility of GOI's medium term fiscal targeting framework, is a positive step by the government in the Budget 2016.

ICRA        Last Updated: February 29, 2016  | 17:43 IST
Naresh Takkar, ICRA
Naresh Takkar, MD & CEO, ICRA


Positives

  1. Reinforcing the credibility of GOI's medium term fiscal targeting framework
  2. Expenditure priorities well defined with the focus on rural, farm and infrastructure sectors. In particular, the substantial allocations for roads and railways to have a strong multiplier effect on the rest of the economy.
  3. Proposal for dispute resolutions in PPP infrastructure projects
  4. Step up in NREGA allocation to augment social security
  5. Improving the targeting of beneficiaries for various subsidies and schemes through greater use of Aadhar is expected to result in fiscal savings over medium term. 
  6. Proposal to do away the with plan/non-plan classification from FY18 onwards as well as the plan to review the FRBM framework.
 Negatives
  1. Low growth of about 9000 (<5 per cent) in allocation of overall capital expenditure
  2. Inadequate allocation for Banks recapitalization though the commitment to infuse higher amount if required was re-iterated.

HIGHLIGHTS:Union Budget 2016


 

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