New Delhi: Budget for the next fiscal year needs to provide Rs 1.10 lakh crore for implementing the One Rank One Pension (OROP) and the 7th Pay Commission award, besides a higher allocation for the farm sector, Finance Minister Arun Jaitley said on Friday.
Addressing the Consultative Committee attached to the Finance Ministry, he also said that India has potential to grow at a much faster pace even as he exuded confidence that fiscal deficit for the current financial year will be within target.
"During the financial year 2016-17, the central government has to make provision for about Rs 1.10 lakh crore in order to meet the liabilities on account of implementation of 7th Pay Commission recommendations and One Rank One Pension (OROP) Scheme," Mr Jaitley said.
He also said that the agriculture growth in the last two years has suffered mainly due to insufficient monsoons and highest ever amount was given to the states for drought relief during the current financial year (2015-16).
"More incentives will be given to agriculture sector for increasing agriculture production and productivity," he said.
India, he said, continues to be one of the fastest growing economies in the world, but there is still potential to grow at a much faster pace.
"The world economy is passing through an uncertain and fragile situation... The silver lining is low international commodities and oil prices which in turn has helped in better macroeconomic situation of the country," Mr Jaitley said.
The 7th Pay Commission in November recommended an increase in remuneration of about one crore government employees and pensioners which is estimated to impose an additional burden of Rs 1.02 lakh crore in 2016-17. The new pay scales, subject to acceptance by government, will come into effect from January 1, 2016.
The government had last year announced that it will implement OROP, under which a uniform pension would be given to armed forces personnel retiring at the same rank with the same length of service. The scheme would be implemented from July 1, 2014.
According to a Finance Ministry statement, Mr Jaitley said that this year was the first time that the real expenditure amount was higher than budget proposal.
During the meeting, the members suggested that tax exemption limit for middle and salaried class be raised from existing Rs 2.5 lakh to Rs 4 lakh as well as more stress be given on widening of tax base, while there should be severe punishment for those evading taxes.
They also suggested that the threshold limit of Rs 2 lakh for mandatory PAN card quoting for any transaction be raised to Rs 5 lakh.
"Some members suggested that there should be accountability of assessing officers for passing unreasonably high tax liability orders to harass the assessees which are later on turned down by the Appellate authorities," said the statement.
They also suggested that higher allocations be made to improve the agriculture related irrigation projects in different states which are in bad shape.
There was also suggestion to change the labour ratio in MGNREGA such that it can be more productive and used for infrastructure building along with providing jobs, it said.
Some members sought more focus for providing employment opportunities in rural areas, increasing agriculture productivity and agriculture credit at cheaper rate.
"It was also suggested that forthcoming budget be poor and common man-oriented and should make higher provision for removing child malnutrition among others," the statement said.
There was also a suggestion that funds from CSR must be used in developing the area where the company is functioning and making profits.
There was also a suggestion made to give tax incentive to MSMEs for their betterment which, in turn, would help in creating more employment opportunities, it added.