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Uttar Pradesh State Budget 2016 – 17

By The Indian Economist 

The Fifth State Budget released by the Akhilesh Yadav government comes at the back foot of the 2017 state elections. All eyes are on Yadav to come up with deliverables in the new budget. While the previous budgets have focused on infrastructure development, employment generation and poverty alleviation, pressure is on for the government to perform well in this budget session and focus on maximizing welfare for its citizens. Here, we look at some of the highlights of the budget:

Bifurcation of Funds

Total budget for this year stands at Rs.3, 46, 935 crore. This year’s budget shows an increase of 14.6% from last year. Within the incremental amount, Rs.13, 842 crore has been earmarked for new schemes focusing on agriculture, health and education. The budget estimates receipts of over Rs. 3,40,120 crore including Rs. 2,81,555 crore and Rs 58, 565 under revenue and capital heads respectively. Expenditure has been estimated at Rs. 3, 46, 935 crore. In absolute terms, the fiscal deficit is expected to be 4.04 percent of the gross state domestic product (GSDP). The fiscal deficit includes bonds worth Rs 13, 303 crores issued under the central government’s financial reorganization scheme – Ujjwal Discom Assurance Yojana (UDAY). Rs. 28, 200 crore is the estimated revenue surplus and Public debt is estimated at 30. 30 percent of the GSDP.

Special Programs:
 Rs. 814 crore has been earmarked for the Lucknow metro and Rs. 50 crore for the metro in Varanasi and Kanpur. Two new government engineering colleges are set to open in Devipatnam and Basti and a medical college in the Bijnor district has been planned for the next fiscal year as well. 1200 new skill development centers will be opened. As we can see, the government is pushing for skilling of the population in much needed areas. These goals are in alignment with larger national schemes as well. The CM has also promised to develop two new Greenfield cities, in the east and the west regions respectively. These cities will be hubs of future growth and will house high tech facilities. It was further reiterated that efforts will be maintained to provide at least 22 hours of electricity in urban areas and rural areas were promised 16. While these developments are welcome, the fact that the basic amenity of electricity 24/7 has not been ensured  calls into question the dedication of the previous governments to development.“Electricity availability will be increased from 11,000 megawatts (MW) to 21,000MW,” Yadav said in his speech. Crop loans disbursement has been targeted at Rs. 93, 212 crore for purchase of fertilizers, seeds etc. and Rs 4,003 crore have been provided for construction of the Agra – Lucknow expressway.

Critical Reception:

ASSOCHAM has hailed the budget as being ‘pro- farmer and pro poor’ aimed at fostering rural development and infrastructure in the state. D.S. Rawat, Secretary General of The Associated Chambers of Commerce and Industry of India (ASSOCHAM) said:

“The state government’s thrust on rural and urban electrification together with providing financial support to power distribution companies, construction and maintenance of roads, growth of housing sector, industrial development, increasing exports, tourism development and other related measures like strengthening law and order also makes it a balanced budget” .

ASSOCHAM has appreciated the focus on drought hit Bundelkhand region and stated that focus on rural development and assistance to farmers is crucial. The opposition has in turn claimed that the budget is a populist one.

The Uttar Pradesh government claims to be a welfare state and has put in place new social security nets for its citizens. The government has decided to implement the largest social security scheme—Samajwadi Pension. “Arrangement has been done to transfer pension in bank accounts of 45 lakh women from poor families. We have proposed to increase the target from 45 lakh to 55 lakh,” chief minister Akhilesh Yadav said in his speech.

Kanpur based political analyst- A K Verma has called it a poll bound budget which plays well into the strengths of the Samajwadi party and capitalizes on the shortcomings of the opposition. In the end, it is the citizen of the state who decides whether the budget and their leader have been effective or not. All eyes will be set on the voters in 2017 as they decide the fate of Uttar Pradesh!

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