The big thrust areas of Union Budget 2016-17, which is Finance Minister Arun Jaitley’s most closely watched budget, will be the agriculture and transport sectors and big-ticket disinvestment, including strategic sales in high-value companies such as Bharat Heavy Electricals Limited (BHEL), and oil and defence public sector units (PSUs) such as Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL), Bharat Petroleum Corporation (BPCL), Hindustan Aeronautics Limited (HAL) and Bharat Earth Movers Ltd (BEML).
Mr. Jaitley will announce in his budget speech a new centrally sponsored scheme for irrigation.
On the expenditure side, the big outgo will be on account of the implementation of the 7th Central Pay Commission recommendations for pay and pension hikes with effect from January 1 this year.
The government has decided, an official source told The Hindu , to announce hikes slightly more generous than the Commission’s recommendations. The payouts that will begin from April 1 will include arrears for three months. More than Rs. 1 lakh crore has been budgeted under the head.
Although this payout has turned out to be the biggest challenge for the Finance Minister in meeting the fiscal deficit target, the source said “full effort is [on] to ensure there are no further pauses in the committed fiscal consolidation targets.”
The Finance Ministry earlier sent its budget calculations including proposals related to the fiscal deficit for approval to the Prime Minister, the source said. Mr. Jaitley will present the budget in Parliament on February 29.
To meet the fiscal deficit target, the government will rely on proceeds from disinvestment for which the budget will set ambitious targets.