Budget 2016 – Bottom up Approach
The falling oil prices has helped the government save about USD 1.7 billion in subsidy bills which is major boost to India’s finances. The direct benefit scheme for LPG subsidy, that transfers subsidies directly to beneficiaries through bank accounts, could help the government save about USD2.3 billion every year. Recently economic survey had revealed that India’s rich feed off subsidies worth over Rs. 1 lakh crore a year that are meant for the poor. So did budget consider all the factors. The BIG Question was….will priority be given to Growth or Fiscal Deficit? People used to big bang announcements will be disappointed. Well in one line this is a social transformative budget which provides roadmap for fiscal consolidation. The thrust has been on three main areas Rural, Agriculture & Social sector. The target for fiscal deficit 2016/17 has been retained at 3.5% of GDP. This is positive for bond market & banking in general. Also will give c...