Merger likely to save `9,500 crore `1.31L cr

SANJAY BASAK | DC NEW DELHI, FEB. 1 With polling in high-stake Assembly elections just three days away, finance minister Arun Jaitley has reached out to farmers, the backward classes and small traders in a big way through his Union Budget.

Keeping his focus on the huge backward class vote bank in Uttar Pradesh and Punjab, Mr Jaitley announced over 30 per cent increase in Budget outlay for the welfare of the scheduled castes and scheduled tribes.

As per the 2011 Census, Uttar Pradesh has the largest chunk of the total SC population, while Punjab has the largest share of dalits.

Aware that demonetisation has dealt a severe blow to the agriculture sector as it came during the kharif harvest and the start of rabi sowing, the finance minister announced a total allocation of `1,87,223 crore for rural, agricultural and allied sectors for 201718.

With the promise of doubling farmers’ income in five years, he has set aside `10 lakh crore for loans to farmers, increased the allocation for Pradhan Mantri Fasal Bima Yojana to `13,240 crore, set a target of 10 lakh farm ponds till March, 2017, under MGNREGA and doubled the pace of road construction, among other things.

He has also announced a massive 25 per cent hike in the MNREGA budget.

If the majority of Uttar Pradesh’s population depends on farming activities, Punjab’s agriculture sector remains the largest contributor to the state’s GDP.

Also, to soothe frayed nerves of others hit by demonetisation, Mr Jaitley has provided tax relief to the middle class and the Sangh’s core vote bank micro, small and medium enterprises (MSME). Page 7: BJP tries to get the Dalit support ■

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The budget has allotted a lion’s share of `3.95 lakh crore for infrastructure development, terming it as a top priority area for the government. Mr Jaitley said the magnitude of investment in the space is bound to spur growth.

Mr jaitley said, “total allocation for infrastructure stands at a record level `3,96,135 crore in 2017-18.” The allocation for infrastructure in 201617 budgetary estimate was `3,48,952 crore which was revised to `3,58,634 crore.

He said infrastructure was the thrust area of the government for efficiency, productivity and quality of life. The historic decision of merging the Railway Budget with the General Budget for the first time since it began in 1924 was apparently done to stop politicisation of the sector.

However, the government’s contention was dismissed by the Opposition parties and former railway ministers, who questioned the rationale behind the move.

Traditionally, the railway ministers had used the Budget to announce new trains to connect places which were seen to be politically important for the then government. The practice of announcing new trains was stopped last year itself with the government focusing on improving rail finances.

Finance minister Arun Jaitely began his Budget speech on Wednesday by listing the merging of the general and railway Budget as one of the three major reforms in the Budget document this time.

“The merger of the railways budget with the general budget is a historic step. We have discontinued the colonial practice prevalent since 1924. This decision brings the Railways to the centre stage of Government’s fiscal policy and would facilitate multimodal transport planning between railways, highways and inland waterways,” Mr Jaitely said.

Railway minister Suresh Prabhu also said that it was just a “colonial practice” and no other country in the world had a separate budget for the Railways.

“Railways' functional autonomy will continue. It was legacy and nowhere Railways has a separate budget. Now there will be an integrated approach to transportation, including rail, road, aviation and waterways.” Mr Prabhu said Railways will no longer pay dividends to the finance ministry after the merger and is thus likely to save `9,500 crore.

Both the ministers highlighted the fact that the Railways would benefit from the merger and the decision will give a boost to the overall infrastructure sector. A record plan outlay of `1.31 lakh crore was announced against `1.21 lakh crore planned for 201617. The finance ministry will provide a gross budgetary support of `55,000 crore to the Railways in 2017-18. For the first time after the merger of the budgets, the Railways will not be required to pay annual dividend of around `9,000 crore to the finance ministry beginning 2017-18.