Jun 3, 2016


While there has been a significant focus on bettering government programmes by allotting more budgets, little attention has been paid to education. Take a look at the hits and misses of this year's budget. 

Three Hits

1. The Jan Aushadhi Scheme with its promise of setting up 3000 generic medicine stores. 

It is heartening to see that the government acknowledges the increasing out of pocket expenditure towards healthcare as a critical vulnerability. 

2. Budget for the national right to work programme (the Mahatma Gandhi National Rural Employment Guarantee Scheme) increased by about Rs. 3,800 Crores. (US $564 Million) 

The scheme provides right to work to about 5.2 crore people in India. This is good news that the amount allotted is close to what was demanded for by the Ministry as well as by the activists on the ground.

3. An additional tax at the rate of 10% on dividends earned by High Net-worth Individuals (HNIs). 

There is welcome increase in the surcharge by 3% on HNIs with an income above Rs. 1 crore (US $ 150,000) and a proposed 1% tax deduction on purchase of luxury cars priced over Rs. 10 lakhs (US S 15,000) and goods and services paid in cash over Rs. 2 lakhs (US 3,000)

Three Misses

1. There is a push to promote insurance-based mode of healthcare provision as the new health protection scheme provides a Rs. 1 lakh (US$ 1500) cover per family with an additional top-up package of Rs.30,000 (US$ 450) for senior citizens. 

This only looks at the demand side and fails to address existing supply side constraints. This includes the basics such as better physical infrastructure (beds per 1000), number of doctors per 1000 population, or the challenge of having an effective governance framework to manage the quality of healthcare delivery. 

2. There is hardly any focus towards education sector. 

The proposals pertaining to education are flawed as they promote skills and job creation. The focus only on digital literacy and Skill India Mission belie our hopes of having in place an education system that is of intrinsic and instrumental.

3. On the tax policy front, indirect taxes continue to be a disproportionately higher share of total taxes. 

These taxes negatively impact the vulnerable and most marginalised sections disproportionately. To add to this, a slew of cesses have been introduced to boost revenue collection that even conservative economists object to given that they are not shared with the states.


Written by Pooja Parvati

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