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Tuesday, July 27, 2021

From rural, defence to taxpayers: Revisiting Modi govt’s last five budgets

In the first Budget of Modi 2.0, the armed forces will be vying for an increase in the budgetary allocation with its eye set on modernisation and upgradation projects to deal with challenging security aspects both within and outside India.

By: Express Web Desk | New Delhi |
Updated: July 4, 2019 7:42:06 pm
From rural, defence to taxpayers: Revisiting Modi govt's last five budgets As we head for the first full-Budget of Prime Minister Narendra Modi’s second term, we take a look back at the previous budgets on key sectors since 2014.

Union Finance Minister Nirmala Sitharaman will table her first full-Budget on Friday, a month after her party BJP won a second term with a landslide victory in the general elections held in April and May. Earlier today, the government’s economic survey projected that economic growth in the current fiscal year could rise to 7 per cent from the 6.8 per cent in 2018-19—the slowest rate of growth in five years.

As we head for the first full-Budget of Prime Minister Narendra Modi’s second term, we take a look back at the previous budgets on key sectors since 2014.


In the first Budget of Modi 2.0, the armed forces will be vying for an increase in the budgetary allocation with its eye set on modernisation and upgradation projects to deal with challenging security aspects both within and outside India.

2018: Defence gets 1.58% of GDP, lowest allocation since 1962

The defence budget estimated at 1.58 per cent of GDP saw an increase of 5.91 per cent for FY 2018-19 to Rs 2,95,511.41 crore. Sitharaman, then in the Defence ministry, had said it was a “very reasoned and realistic accommodation of our expectations”. The defence budget accounted for 12.10 per cent of the total central government expenditure, 7.81 per cent more than the Rs 2,74,114.12 crore announced in the previous budget for FY 2017-18 — the figure was later revised to Rs 2,79,003.85 crore.

Meanwhile, the allocation for defence pensions, at Rs 1,08,853.30 crore also shot up by 26.60 per cent above the Budget Estimate 2017-18 of Rs 85,740 crore and by 14.26 per cent over Revised Estimate 2017-18 of Rs 95,000 crore. Then Finance Minister Arun Jaitley had also announced, “measures to develop two defence industrial production corridors in the country”.

2017: Defence budget sees modest 6% hike

In his 2017 budget, the then finance minister Jaitley gave a modest 6 per cent hike to the defence sector allocating Rs 3,59,854 crore. For defence expenditure, excluding pension, a sum of Rs 2,74114 crore including Rs 86,488 crore for capital was announced. Among the defence services, the India Army received the highest cut with Rs 1,49,369 crore followed by Indian Air Force, Navy, Defence Research and Development Organisation and Ordnance factories. In the 2017-18 budget, 17 per cent of the Army’s total allocation was earmarked for capital expenditure.

2016: OROP, Seventh Pay Commission recommendation take centre stage

The defence sector, which had been under the process of modernisation received Rs 3,40,921.98 crore in the 2016-17 budget presented by Jaitley. With the implementation of the One Rank One Pension (OROP) and Seventh Pay Commission recommendations, the focus was on setting the balance for the next fiscal. The Indian Army received the largest share of the pie with Rs Rs 1,29,580 crores, Air Force with 22 per cent share got Rs 53,451 crore while Navy managed with 16 per cent of defence budget at Rs 39,425 crore. However, all three services faced a decline in the share compared to the 2015 allocations at a time when they had several mega procurement contracts to be finalised. The defence sector in the FY 2016-17 also witnessed a push towards ‘Make in India’ with a slew of tax incentives and benefits extended towards those making in India.

2015: A 7.7% hike in allocation raises morales in the defence sector

The 2015 budget earmarked Rs 2,46,727 crore for the defence sector. This was a 7.7 per cent hike in the defence allocation compared to the FY 2014-15. The allocations were also hiked with the newly-formed government pushing for its ‘Make in India’ initiative. As always, the Indian Army received the lion’s share of the budget with 53 per cent share in Rs 1,30,874 crores. The Air Force was distant at Rs 56,658 crores and the Navy third with Rs 40,529 crore from the corpus. The budget also proposed to reduce corporate tax from 30 to 25 per cent over a period of four years in a bid to boost Indian industries for defence manufacturing.

2014: 9.8 per cent hike as candidate Modi makes national security poll plank

With then PM candidate Narendra Modi running a heated electoral campaign on retaliating against Pakistani incursions, the defence budget for FY 2014-15 witnessed a 9.8 per cent hike.


One of the biggest moves of the NDA government came in 2017, when the Modi government decided to merge the Railways Budget and the Union Budget, thus ending a 92-year old practice. While NDA government spent the last five years on long-term infrastructure building in Railways, laying of second, third, and fourth lines on busy routes to enhance network capacity, and bringing in Northeast connectivity through broad-gauge conversion have been top on the government’s to-do list. Electrifying routes also got a major thrust and the government finalised the Ahmedabad-Mumbai Bullet Train project.

2019 Interim Budget: Railways gets highest ever allocation

This year’s interim Budget saw the railways get the highest-ever allocation of Rs 1,58,658 crore for the year 2019-20. The government also announced the country’s first indigenously developed and manufactured semi high-speed ‘Vande Bharat Express,’ which will offer world-class travel experience to passengers.


2018: Govt puts doubling of railway lines on track

With capital spending pegged at Rs 1.48 lakh crore in Budget 2018-19, Jaitley proposed doubling 18,000 km of lines and also laid out a plan of 36,000 km of rail track renewal and also announced that 4,267 unmanned railway crossings on broad gauge routes were to be eliminated in the next two years.

2017: Rail safety fund, elimination of unmanned crossings in spotlight

In 2017, the Modi government decided to merge the Railways Budget and the Union Budget. In the first combined speech, Jaitley announced a rail safety fund, namely ‘Rashtriya Rail Sanraksha Kosh’, with a corpus of Rs 1 lakh crore over a period of five years for critical safety-related works in the railways. Besides, elimination of unmanned level crossings on broad gauge lines by 2020 also formed part of Budget announcement.

2016: Four new trains, including Antodaya, Tejas, Humsafar announced

With expenditure pegged at Rs. 1.21 lakh crore, 2016-17 saw the announcement of three new superfast trains: ‘Humsafar’, a fully air-conditioned 3AC service with the option of meals; ‘Tejas’ which could reach speeds up to 130 km per hour and offer on-board services such as entertainment, local cuisine and Wi-Fi; and ‘Uday’, Utkrishit Double-decker Air-conditioned Yatri, an overnight double-decker train on busy routes. For unreserved passengers, Railway Minister Suresh Prabhu offered Antyodaya Express, a long-distance superfast train service, to be deployed on dense routes.

2015: Focus on improving infrastructure gets prominence

In his maiden Railway Budget, the then Union Minister Suresh Prabhu kept fares unchanged, and avoided populist promises of new trains and stations, instead choosing to improve existing amenities. He laid out a Rs 8.5 lakh crore investment plan over the next five years, marking a 52 per cent increase from 2014-15 figures of Rs 65,445 crore to Rs 1, 00, 011 crore in 2015-16. Construction of 917 under-bridges and over-bridges to replace 3,438 railway crossings was mooted.

2014: Bullet train, FDI in rail infrastructure announced

Presenting his maiden Railway Budget, Union Minister DV Sadananda Gowda proposed an investment of Rs 65,445 crore for 2014-15 — a three per cent increase from 2013-14. The major announcement was the introduction of bullet train between Mumbai and Ahmedabad. He also proposed setting up of Diamond Quadrilateral Network of high-speed trains connecting major metros and growth centers. Gowda also proposed FDI in building rail infrastructure.


Over the last five years, healthcare has featured prominently in the policies of the Narendra Modi government. From Jan Aushadhi scheme to Mission Indradhanush and National Health Policy, the first tenure of the NDA government has seen the Ministry of Health and Family Affairs getting a push in monetary allocation. AIIMS as apex centres of tertiary care has been taken forward — 18 AIIMS are coming up.

However, the government has now put all its resources and focus on the flagship Ayushman Bharat scheme to improve primary healthcare, covering 10 crore families with Rs 5 lakh insurance cover per family per year.

2019 Interim Budget: PMJAY gets lion’s share of allocation

The overall allocation to health sector accelerated to Rs 61,398 crores in the Interim Budget for 2019-20, a moderate increase 13% from previous year (2018-19). Over 60% of this increase was on account of higher allocation to PMJAY. Also, Rs 1,350.01 crore has been earmarked for setting up Health and Wellness Centres under the National Rural Health Mission.

2018: Ayushman Bharat scheme steals the limelight

The showpiece of the Modi government’s 2018 Budget was the ambitious Ayushman Bharat scheme for over 10 crore “poor and vulnerable” families with coverage of up to Rs 5 lakh per family per year. The government allocated Rs 2,000 crore for the scheme. Arun Jaitley also announced one medical college for every three Parliamentary constituencies, and at least one in every state besides scholarships for 1,000 doctorate engineering students and the construction of 18.8 million toilets by 2019.

2017: Govt charts roadmap to eliminate Kala Azar, Filariasis

For the financial year 2017-18, the government allocated Rs 48,853 crore for the health sector — a 23 per cent increase. The Centre announced that India would eliminate kala-azar and filariasis in the same year and leprosy by 2018. The government also announced that measles would be eliminated by 2020 and TB by 2025. Also, Drugs and Cosmetics Rules were amended to ensure availability of drugs at reasonable prices and promote use of generic medicines.

2016: Drugs get more affordable for ‘aam aadmi’

The overall Budget allocation for fiscal 2016-17 for health was Rs 39,532.55 crore. The government announced the launch of a new health protection scheme of Rs 1 lakh to cover unforeseen illness in poor families.

In addition, the government announced plans to add 3,000 pharmacies under the Jan Aushadhi Yojana to provide generic drugs at affordable rates. In another major initiative, the Finance Minister announced that dialysis units will be installed at all district hospitals for renal patients under the National Dialysis Service Programme.

2015: Govt gives health insurance a shot in the arm

In its second budget, the Pradhan Mantri Jeevan Jyoti Bima Yojana, which covers both natural and accidental death risk, of Rs 2 lakh was announced. The premium was set at Rs 330 per year. Pradhan Mantri Suraksha Bima Yojna, which gave accidental death risk of Rs 2 lakh for a premium of Rs 12 per year, was also introduced.

The Finance Minister also increased the tax deduction limit of health insurance premium from the existing Rs 15,000 to Rs 25,000 to encourage more people to take up health insurance.

2014: Focus on affordable healthcare, four AIIMS to be set up

Presenting the first Budget of the Narendra Modi government, Finance Minister Arun Jaitley hiked the health budget by 27 per cent in 2014-15 to Rs.35,163 crore, with special focus on improving affordable healthcare for all.

Jaitley also announced the setting up of four new All India Institutes of Medical Sciences (AIIMS) with a corpus of Rs 500 crore in Andhra Pradesh, West Bengal, Vidarbha in Maharashtra and Poorvanchal in Uttar Pradesh.

Central assistance to strengthen the States’ Drug Regulatory and Food Regulatory Systems by creating new drug testing laboratories also formed a part of the Budget.


Education, Research and Development (R&D) has over the years slipped from the grasp owing to the continuous shortage of funds due to shrinking budgetary allocations. This budget comes on the heels of the interim budget announced by Piyush Goyal ahead of the completion of Modi 1.0, where no major announcements in the education sector were made. There were, however, expectations of a rise in funds especially after the passing of 10 per cent reservation for economically weaker sections in Parliament. He talked about increasing the quality of education and making it more scientific. “We will also build quality, a science-oriented educational system with Institutes of Excellence providing leadership at the top,” said Goyal.

2018: 18 new IITs, NIITs, ‘Diksha’ for training teachers announced

In his last budget in Parliament, Jaitley had said that the government had managed to get children to school but the quality of education remains a concern. An overall outlay of Rs 1.38 lakh crore was allocated combined on education, health, and social security. A key focus area remained teachers’ training with ‘Diksha’ for formal training of 13 lakh untrained teachers. In higher education, the government announced the launch of Prime Minister’s Research Fellow Scheme that identifies 1000 B.Tech students to do Ph.D at IITs and other prestigious institutes. 24 new medical colleges, one for every three Parliamentary constituencies, 18 more IITs and NIITs, 2 schools of planning and architecture also made the cut in the budget speech.

2017: No fresh approach to education, outlay fails to impress

Facing severe neglect, the HRD ministry which then had a change in leadership was hoping to get some much-needed breathing space with fresh funds, however, nothing changed. Presenting his budget in the backdrop of demonetisation, Jaitley disappointed the sector with no new announcement except for the formation of a national testing agency. Surprisingly, the Finance Minister skipped mentioning the total outlay for education sector during the budget speech. Based on the data from the Finance Ministry’s website for the Union budget, Rs 79,686 crore was allocated to the sector. Reforming University Grants Commission (UGC) was another noticeable announcement in the speech. “The education which does not help the common mass of people to equip themselves for the struggle for life…is it worth the name?” Jaitley had said.

2016: With 4.9% hike, estimate less than desired

With an allocation of Rs 72,394 crore, the FY 2016-17 budget saw an increase in outlay to the education sector. A 4.9 per cent increase saw the estimates go above Rs 68,963 crore from the previous year. Increase in the education budget was a welcome step, however, if considering inflation and GDP growth rate in the year, education budget came down to lower than the previous year allocation (as % of GDP). Even after this increased allocation, education sector budget remained far from 6 per cent of the GDP, which was desired. The main highlight of the budget remained its focus on skills development and entrepreneurship. Allocation of Rs 1,700 crore for 1500 multi-skill development centres, a target of skilling 1 crore youth in the next 3 years under the PM Kaushal Vikas Yojna and allocation of Rs 500 crore for promoting entrepreneurship among SC/ST are welcome steps.

2015: Focus on higher education, allocation to schools reduced

Jaitley while marginally reduced overall allocation, increased the budget of planned higher education by 22 per cent. Jaitley proposed to set aside Rs 69,074 crore in FY 2015-16. Of the total outlay, Rs 42219 crore was marked for schools and Rs 26,885 crore for higher education. The allocation to the school sector, however, saw a 10 per cent reduction. The finance minister further announced new institutes of excellence including IITs and IIMs. The two proposed IIMS were to be set up in J&K and Andhra Pradesh. However, this was a rollback on the 2015 budget speech in which Jaitley had called for setting five new IIMs and IITs each. A corpus of Rs 1,000 crore was marked for setting these institutes.

2014: School sector gets 10 per cent hike in budget from Manmohan era

Presenting the Budget of the newly formed Modi government, Jaitley gave a nearly 10 per cent hike in allocation to the school sector. The Human Resource and Development ministry received Rs 83, 771 crores, an increase of 12.3 per cent from the Manmohan era government. The Sarv Siksha Abhiyan was given Rs 28,635 crores while the mid-day meal got Rs 13,215 crore. Rs 100 crore was provided for setting virtual classrooms to boost online and digital literacy. Meanwhile, Rs 100 crore was also allocated for modernisation of madrasas.


In the Interim Budget 2019-20, Goyal set aside Rs 75,000 crore towards the Pradhan Mantri-Kisan Samman Nidhi (PM-KISAN), under which farmers holding upto 2 hectares will get Rs 6,000 as assured income support every year.

2018: Govt announces enhanced MSP for crops

In 2018, the then Finance Minister Arun Jaitley’s last full Budget before the Lok Sabha elections was predominantly a rural-sector budget with a clear political overtone. The 2018 Union Budget promised that the minimum support prices (MSP) for all crops would be fixed so as to guarantee farmers a 50 per cent return over their production cost.

Around 57,000 km of rural roads were planned to be constructed under the Pradhan Mantri Gram Sadak Yojana (PMGSY) during 2018-19. The government earmarked Rs 2,000 crore for Agri Market Development Fund to show importance of retail market in the sector of agriculture marketing. In a bid to reinvigorate the National Bamboo Mission, the government allocated a fund of Rs 1,290 crore to increase agriculture and non-agricultural activities. Significantly, the government made an additional allocation of almost Rs 1,000 crore for extending and strengthening irrigation facilities, and improving groundwater management in rural areas.

2017: Boost for UPA’s flagship MNREGA

The total allocation for the rural, agriculture and allied sectors at Rs 1,87,223 crore was 24 percent higher than the previous year. The coverage of the Fasal Bima Yojana increased from 30 percent of cropped area in 2016-17 to 40 percent in 2017-18. The government also allocated Rs 19,000 crore for the PMGSY. The allocation for Pradhan Mantri Awaas Yojana-Gramin (the rural housing scheme) increased from Rs 15,000 crore in 2016-17 to Rs 23,000 crore in 2017-18. Notably, the highlight of the rural emphasis of 2017-18 budget was the highest ever allocation for MGNREGA, the scheme which provides 100 days of wage employment in rural India. Jaitley said Rs 48,000 crore has been earmarked for the demand-driven scheme as against Rs 38,000 crore in 2016-17.

2016: Big push for bijli, sadak, paani in villages

The 2016-17 Budget, tabled by then finance minister Jaitley, had many initiatives that indicate a conscious attempt by the government to project a pro-rural tilt. To start with, there was a focus on irrigation. Jailtey had proposed creation of a dedicated Long Term Irrigation Fund (LTIF) for implementing 89 major/medium irrigation projects covering a command area of over 8 million hectares. The Budget also increased allocation to the Pradhan Mantri Krishi Sinchai Yojana (PMKSY), which focuses mainly on micro-irrigation and boosting water-use efficiency at farm level from Rs 5,300 crore to Rs 5,840 crore. The other big focus was rural roads under the PMGSY. Another pro-rural initiative was the Pradhan Mantri Fasal Bima Yojana (PMFBY), for which the Budget had allocated Rs 5.500 crore, more than the Rs 2,954 crore under all crop insurance schemes in 2015-16.

2015: A new Pradhan Mantri flagship-for micro-irrigation this time

There was little in the Budget for agriculture apart from allocations to PMKSY aimed at ensuring access to water to every farm and improving water use efficiency. The total allocation to PMKSY for 2015-16 was budgeted at Rs 5,300 crore, which included Rs 1,800 crore towards micro-irrigation.

2014: National agri market, FCI reform Modi’s keys to revive farm sector

Presenting his first Budget, Jaitley gave a fresh push for creating a national market for agricultural produce and planned reforms in food grain management through restructuring the FCI. In his Budget speech, he announced setting up of two centres of excellence in agricultural research (Assam and Jharkhand), two agricultural universities (Andhra Pradesh, Rajasthan), two horticulture universities (Telangana and Haryana) and a dedicated “Kisan TV” for farmers.

Personal Tax

In the previous tenure of the PM Modi-led government, the income tax slabs remained the same for the first three fiscal years (2014-17) as the government did not demand taxation upto a minimum annual income of Rs. 2,50,000 for taxpayers up to 59 years of age.

For the year 2017-2018, the five per cent tax slab was brought down to taxpayers with an annual income of Rs 2,50,001- Rs 5,00,000.

The tax slab for taxpayers with an annual income between Rs 5,00,001 – Rs 10,00,000 was 20 per cent while the slab for individuals with an annual income above Rs 10,00,000 was 30 per cent.

In the interim budget presented by former Finance Minister Piyush Goyal, the government did away the tax slabs for a minimum annual income of Rs 5,00,000. The move was seen as a measure to appease the middle class, a couple of months before the elections.

“I had the constraint of this being an interim Budget. However, there were many things which could not have waited for the final Budget, particularly relief for the small taxpayer which I have passed on. The rest is for the then Finance Minister to decide in July 2019,” former Finance Minister Piyush Goyal had stated while presenting the interim budget in February.

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