Budget 2017: PM Modi’s schemes put up mixed performances; NHPS lags but DBT, LPG schemes script a success

Several schemes announced in the 2016-17 Budget are yet to get off the drawing board though one for free LPG connections to the poor and another for more inclusive and affordable crop insurance have done well.

narendra modi gopio
Currently, NRIs holding Indian Passport are only allowed to deposit or exchange the demonetised currencies at five Reserve Bank India branches in Delhi, Mumbai, Kolkata, Chennai and Nagpur. (PTI)

Several schemes announced in the 2016-17 Budget are yet to get off the drawing board though one for free LPG connections to the poor and another for more inclusive and affordable crop insurance have done well. The national health protection scheme (NHPS) under which R1 lakh medical care will be provided to the poor free of cost to them, for instance, is yet to see the light of the day. Similarly, the plan for the strategic sale of identified PSUs, including profitable ones, has remained just that; it is unlikely that any major PSU will be sold off in the current fiscal.

The NDA government has also done well to enlarge the direct benefit transfer (DBT) platform and make the Aadhaar-enabled beneficiary identification virtually a must for release of subsidies and sundry other doles, though more could have been achieved. However, little has been done to create more jobs — although the government had said it would do so — except for increasing the government’s EPF contribution for new jobs in the employment-intensive garment sector.

The Modi government could take credit for issuing 1.62 crore free LPG connections to below poverty line households since the Pradhan Mantri Ujjwala Yojana was launched on May 1, 2016, against a target of 1.5 crore for the whole of FY17. It has promised to provide 5 crore such connections in three years.

The scheme was powered by a government campaign since March 2015 that led 1.06 crore well-off people to lose/give up LPG subsidy. A crucial piece of legislation —the Targeted Delivery of Financial and Other Subsidies, Benefits and Services Act — was approved by Parliament in March 2016, virtually making use of the unique identification number Aadhaar mandatory for receiving doles. After the success of DBT for LPG subsidy, Aadhaar-enabled DBT pilot projects have been rolled out for kerosene, fertiliser and food subsidies. An ambitious target has been set to transfer Rs 3-lakh-crore annually for various welfare schemes using Aadhaar-enabled platform by March 2018. The government estimates that it has saved about Rs 36,000 crore since FY15 after DBT implementation for LPG subsidy disbursal and in some other schemes.

In a short span of a few months, 3.7 crore farmers have been enrolled under PM Fasal Bima Yojana, widening the crop insurance cover. To protect the farmer from the adverse weather and natural disasters, the government has implemented the universal crop insurance scheme in the last kharif season (July-October) at a very nominal cost to the farmers. Nearly 70% of the farmers enrolled have already taken crop loans. With the good response to the scheme, the government has decided to revise the budget allocation for it from Rs 5,501 crore to Rs 13,240 crore for FY17.

NHPS, a more generous scheme than the earlier Rashtriya Swasthya Bima Yojana that provided annual health cover of Rs 30,000 – is still in incubation. NHPS is estimated to cost Rs 24,000 crore for a 5-year period and is expected to benefit nearly 10 crore families. With proper safeguards against misuse, it could enable the poor to access free public as well as private health care facilities for expenditure up to Rs 1 lakh annually.

The government had announced in FY17 budget that it would contribute the 8.33% employer’s contribution towards the employees’ pension scheme for all new employees, earning up to Rs 15,000/month enrolled under EPFO
for the first 3 years. It has, however, implemented this only in the garments sector from August, 2016 with the government contribute entire 12% of the employers’ contribution of the EPF Scheme, at a cost of Rs 1,170 crore over three years.

Among other plans awaiting execution include listing of the five PSU general insurance companies. This apart, there has been little policy intervention to boost job creation.

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