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Big Rural Push & Major Financial Reforms in Budget Ahead of Assembly Polls

New Delhi: FINANCE Minister Arun Jaitley’s Budget for 2016-17 focused on lifting up rural incomes and boosting infrastructure besides ushering in long-pending reforms in the financial sector like the abolition of the Foreign Investment Promotion Board (FIPB) to enable a new policy for foreign direct investments (FDI).

One of the world’s biggest ecommerce players, the Indian Railways Catering and Tourism Corporation (IRCTC) will be now be listed, the FM said, along with a veiled warning to fugitives like Vijay Mallya and Lalit Modi that a new legislation was in the offing to bring back economic offenders.

The scrapping of FIPB will mean that more FDI will now be allowed to come in through the automatic route, leading to speculation as to which sectors will be allowed to avail the benefits in the new FDI policy on the anvil.

The steps taken for providing affordable incomes and kickstarting the job economy are expected to give a leg up to the BJP’s campaign in the 5 states going for assembly polls later this month.

Expectations were rife that the Narendra Modi government will announce a populist budget given the fact that five states are going to assembly polls later this month. Measures aimed at soothing the adverse impact of demonetization are also expected.

As if on cue, the government announced a renewed focus on SCs, STs and minorities

The flagship NREGA programme, a UPA pet project panned by Prime Minister Narendra Modi earlier, ended up getting one of its biggest allocations ever in Rs 48,000 crore with additional emphasis like geo-tagging for transparency and priority to drought-proofing.

The FM raised total allocations to rural, farm, and allied sectors saw a whopping 24% hike in outlay at over Rs 1, 87,000 crore. The housing sector was given infrastructure status that is expected to give a leg up to cement and steel sectors, one of the biggest employment creators.

The “bold and decisive” measure of demonetization, as the finance minister called it today, was announced by Prime Minister Narendra Modi in a surprise address to the nation on November 8. The move to scrap overnight 86% of the value of total cash in the system was panned by Opposition, prominent economists and the international media that called it a “self-imposed cash crisis.”

In his speech, Jaitley claimed the harsh effects of demonetization would not spill over to the next financial year.

In what could be bad news for fugitive liquor baron Vijay Mallya, the government also vowed to strengthen the legislative framework to freeze assets of accounts of financial offenders declared absconding.

Source: News18