ANALYSIS OF INDIAN UNION BUDGET

The research paper focuses on the impact of budget allocation the four sectors namely health sector, education sector, defence sector and agricultural sector. To analyse the impact we have used CRYSTAL MAZE TECHNIQUE. This technique will help readers to easily read and understand the budget under Modi Government. All the policies, schemes and improvement have been discussed in the paper. In order to improve the quality of life of the people, the government has increased the budget in each successive year keeping all the priorities in mind.

KEYWORDS: Corpus, Dedicated funds, Revitalizing, Interim.

INTRODUCTION:

Budgets are the tools which are recognized world-wide. It enables us to do planning and efficient management of resources and economic activities. Budget includes plans, revenues and expenses. This paper presents the analysis of budget of 6 years (2014-2019) under the Modi Government in the following sectors namely agriculture, defence, health and education. This paper evaluates the impact of budget allocation by Modi Government in these four sectors.
The paper will benefit the citizens of India to understand the budget in an easy way. It will help the people to know the allocation of budget in various sectors whether it has increased or decreased in comparison to previous year’s budget.It can help the government that on which sector they should focus.

We can analyse the union budget through various angles by using crystal maze technique and we can link the budget to a particular sector. The Crystal Maze concept was given by Prof. Subhash Sharma in his article- “Crystal grazing for budget analysis: seven ways framework of looking at the budget”. He wants that budget should be understood by each and every citizen. Hence this technique provides holistic view to look at the budget from seven angles viz common man, security, corporate, sectoral, fiscal, local global and development.

Common man’s view: The impact of budget on common man is in terms of ‘cost of living’. Nature of distribution of benefits and burdens are needed to be analyzed. The budget is then divided into ‘pro-rich’ or ‘pro-poor’ budget.
Security view: This will show the concern of government towards nation and internal security. We can analyse the allocation of budget for defence and nation’s security.

Corporate view: This will analyse the impact of budget on ‘bottom lines’ of corporate. There  is comparison of minimum advantages or restrictions  which are given to corporate sector.

Sectoral view: From three sectors of economy- Agriculture, Industry or Service, government will focus on one of these sector more. This will show the sectoral biasness of the government.

Fiscal view: The financial position of the government can be analysed in form of revenue and expenditure. The true financial health of budget (fiscal deficit) can be known.
Local global view: This will tell us that whether government has focused on local perspectives (Swadeshi Budget) or on global perspectives ( Videshi Budget). This will tell the preferences of government from vidshi-swadeshi angles.
Development view: This will tell us about ‘SHE (Shelter, Health, & Education) factors, science and technology and rural development.

REVIEW OF LITERATURE:

Various authors have analyzed the various aspects of Indian Union Budget at different time period. The following are the reviews of studies conducted in the past in relation with Budget Analysis.

Joshi and Mehta (2019) conducted a study to know the effect of announcement of union budget on stock market from 2011-2017. Data from daily closing values from stock market indices (BSE 500, BSE SENSEX, BSE AUTO, BSE BANKEX, BSE IT, and BSE Finance) was collected. These were collected before and after announcement of budget. T-test and F-test was used to check the impact of union budget on stock market. They found the significant impact of budget on stock market.

Shastri and Aggarwal (2018) did the analysis of union budget 2017-2018 by using crystal maze technique. Crystal maze concept is proposed by Prof. Subhash Sharma in his article “Crystal Grazing for budget analysis: 7 way framework of looking at the budget”. Through this technique they analysed that developmental and common man requirements are neglected in budget.

Dhar (2014) an analysis was done on interim budget for the FY 2014-2015. Under this he has explained how budget is going to affect the various sectors like agriculture, defence, education, railway, health sector of India. The main concern was to make the common man happy as it was a start for the new government. All possible efforts was done by the NDA government to make this budget allocation a success.
Mooij and Dev. (2002) an analysis of expenditures and budgets of priority sectors was done in 1990. The main concern was poverty. In 1996, the interest diverted to human development aspects.

It included rural roads, education, health and housing. From 1996, share of rural development went down from total social sector expenditure. They found that change is required for betterment of other sectors of economy.
Wadhwa (2016)data collected under his study was secondary data and it was collected from the various RBI bulletins, currency and finance reports, economic surveys and. The study was based on Fiscal Deficit to GDP ratio. For keeping the expenditures under control the economy was needed to be restructured and reformed.

Devan Jana Nag (2014): In this report analysis was done on the railway budget where the Modi government in its last budget allocated around Rs 1.6 lakh crore for Indian Railways, according to an IE report. According to the report, despite having a challenging year in terms of revenue earnings, Indian Railways is likely to project a revenue target exceeding Rs 2 lakh crore for 2019-2020, the same as last year. This report studies the behavior&impact of the financial railway budget through research methodologies.
Gupta and kundu(2006):studied the union’s budget impact on stock market keeping in mind the volatility and returns in Sensex. There was less impact on medium and long term average returns than short term period of post budget.as there is increase in time period volatility didn’t increased in post budget.

Gakhar, Kushwaha and Ashok (2015):under their study they had found that CNX NIFTY had not affected by the budget significantly. In pre or post budget period the effect of budget on average return is not significant. The observation made was that the budget has more impact in short run whereas in medium and long run the impact of budget diminishes.

GAP ANALYSIS:

Though many studies have focused on Budget Analysis but to the best of my knowledge, studies have not covered the analysis of 6 years using Crystal Maze Technique. Hence, to fill this gap, we are making Crystal Maze Analysis of Budget in Defence, Agriculture, Health and Education sector for time period 2014-2019.
OBJECTIVES:
To check the optimum growth ofagriculture, education, health and defence sectors.
To check the positive and negative impact of all four sectors.
RESEARCH METHODOLOGY
Type of research: Descriptive
Data collection type: Secondary Data
Source: websites and e-paper
DATA ANALYSIS:
In this paper we are analyzing the Budget of Defence, Agriculture, Health and Education sector to know the positive and negative changes happening in the budget from different perspectives.

AGRICULTURE SECTOR ANALYSIS
YEARS BUDGET ESTIMATES (IN CRORE)
2014-2015 21,006
2015-2016 22,958
2016-2017 47,912
2017-2018 41,885
2018-2019 57,600
2019-2020 1,40,764

Above graph depicts the estimated budget allocated in agriculture sector from 2014 -2019. In 2014 the budget allocated was Rs. 21006 crore and that was being utilized in different activities and funding to different schemes but the overall growth of the sector was not done as it  didn’t gave the targeted growth of 4% and this year was the year of crisis. In 2015, the budget allocated was Rs. 22958 and it was being utilized for the welfare of the farmers by providing them 2.85 crore hectare for per drop more crop yojana. Year 2015 was more efficient for farmers in manner of growth. In 2016, the budget allocated took a hike and raised to Rs. 47912 crore this allocation was done as the past years didn’t show effective growth.

Under this agriculture credit was also increased but the private sector investment was decreased to 1.8% that cause decline in investments. But overall growth was done in this year. In year 2017, the budget allocated was Rs. 41885 lesser than previous year as some of the plans was dropped and due to which allocation needed was less. Under this the main aim was interest waiver and initiative of dedicated fund was also a part of it. This year budget allocated was appropriate and the targets was achieved. In year 2018, the budget allocated was Rs. 57600 crore with an aim of up-lifting farmers by giving them fair prices after taking into consideration all elements. Minimum selling price was set by government and to check the price volatility operations green was established. Overall the check on price was done by the government for the betterment of farmers. In the last budget 2019, the budget known as vote on account was allocated with the maximum fund of Rs. 140764 crore  with a view keeping in mind regarding the minimum support price and direct income support where government will provide Rs. 6000 per annum to farmers for the basic needs. Apart from this loans benefit are also taken under consideration. In the era of Modi Government agriculture sector is grown very efficiently and rapidly. As requirements of farmers are being considered under the budget.
Year wise analysis of agriculture sector:-

On 10th July 2014, the total budget allocated to agriculture sector was Rs. 21006 crorewith an aim of 4% sustainable growth. Apart from this allocation of funds an amount of Rs. 100 Crores was given to Agri-tech infrastructure fund. An initiative is also taken by the government to open agriculture universities in Andhra Pradesh, Rajasthan and Horticulture University in Telengana and as well as in Haryana. For this purpose Rs. 200 crore was allocated. Rs. 100 crore was provided to every farmer for soil health card. For setting up 100 mobile soil testing laboratories additional Rs. 56 Crores was provided.

Price stabilization fund was established with a sum of Rs. 500 crore was given to minimize the risk of price volatility.For the upliftment of inland fisheries and indigenous cattle breeds Rs 50 crore was allocated. Financing activities was also done by providing finance to landless farmers. A target was also set by government for agriculture credit was Rs. 8 Lakh crore. And on the other hand corpus of rural infrastructure development fund was raised by an additional 5000 crore rupees from the target given rupees 25000 crore in the interim budget.

Allocation of Rs. 5000 crore was done for the warehouse infrastructure fund. Long term rural credit fund was set up for the support of regional rural banks and cooperative banks with fund allocation of Rs. 5000 crore. Short term cooperative rural credit was provided with Rs. 50,000 crore. After providing all these schemes and funds the year 2014- 15 was the drought year in succession as it provides only 0.1% growth p.a. and contribution to the gross domestic product ranges between 0.3 to 0.4% only.

On 28th February 2015, total budget allocated to agriculture sector was Rs. 22958 crore with an aim of taking major focus on soil and water which is essential for agricultural production. For this purpose ‘Paramparagat Krishi Vikas Yojna’ was fully supported. Under this budget a support was given to micro- irrigation sector and watershed development as well by allocating Rs. 5300 crore to them.

Apart from this a Yojana was made named as Pradhanmantri Gram Sinchai Yojana to provide ‘Per Drop More Crop’ by providing 2.85 million hectare under the flagship of this yojana.  As compared to previous year agriculture credit was increased to Rs. 8.5 crore. Activities of MGNREGA was under supervision. For long term rural credit fund Rs. 15000 was allocated and in short term Rs. 45000 was allocated for rural credit. Under this budget short term refinance fund for regional rural banks was created with a fund of Rs. 15000 crore. The budget introduced a farmer’s welfare cess of 0.5 % points on all services which are taxable and where the growth rate is estimated to be dismissal of 1.1%.

In 2016, the total budget allocated to agriculture sector was increased by approximately   84% and amounted Rs 47,912 crore. Allocation of funds was increased due to crisis faced in past two years. Implementation of Unified Agriculture Marketing Scheme was done and e- platforms was also made. In association with NABARD a long term irrigation fund was allocated Rs. 20000 crore.

For ground water Rs. 6000 crore was allocated and for development of dairy projects Rs. 850 crore was allocated. Agriculture credit was raised to Rs. 9 crore. Measures taken for increasing the income of farmers through farming and allied activities. An online portal named as e- pashudhan haat formed for connecting farmers and breeders. Rs. 1858 was allocated for research and education. In this year private sector investment to GDP ratio had declined from 2.2% to 1.8% that led to overall decline in investments.