1. What is CSR?
The term “Corporate Social Responsibility” is used to emphasise that a business has some responsibilities towards the society as well and it must fulfil those. In India, specified business units have to spend a specified portion of their profits for the social causes, like building schools, colleges, sanitation system, hospitals, drainage etc. The money spent by them is called “CSR funds”.
2. What is provident fund? What is EPFO?
Provident fund is a fund in which employees, employers and (sometimes) govt contribute money on a specified basis. Out of this fund, a lump sum is provided to each employee on retirement. This fund is maintained with Employees’ Provident Fund Organisation (EPFO), a govt body under Ministry of Labour and Employment. EPFO pays interest on the amount maintained with it, which is also receivable by the employee at the time of his retirement. Let’s assume you earn Rs. 200 per month, out of which you are required to contribute 10% (i.e. Rs. 20) to PF. In India, employer is required to contribute the same amount as employee to PF. So, your employer also contributes Rs. 20 to it. This amount of Rs. 40 is maintained with EPFO which pays 2% p.a. interest (assumed to be simple interest) on it. So, after a year, the amount becomes Rs. 489.60. Now, don’t go into the calculations and assume that at the time of your retirement, the amount lying in your account (your contribution, your employer’s contribution and interest on both) is Rs. 10,000. So, when you retire, you receive Rs. 10,000 from EPFO as your provident fund.
Highlights of the Union Budget 2016 for Health, Education, Skill development and Job creation sectors-
- The allocation to Ministry of Health & Family Matters is Rs. 39,533 crores, a hike of 13.09% compared to revised estimates of 2015-16.
- The allocation to National Health Mission is increased by 2% compared to this year’s revised estimates and now stands at Rs. 20,037 crores (out of which, Plan-expenditure is estimated to be Rs. 19,000 crores).
- The allocations to Rashtriya Swastha Suraksha Yojana and Pradhan Mantri Swastha Suraksha Yojana are Rs. 1,500 crores and Rs. 2,450 crores respectively.
- The allocation to Ministry of Ayurveda, Yoga and Naturopathy, Unani, Siddha & Homeopathy (AYUSH) was estimated to be Rs. 690 crores in the last budget. However, the revised estimate for that year was only Rs. 569 crores, due to the ministry’s failure in spending the allocated amount. So, this year’s allocation is Rs. 650 crores, a fall compared to previous budget. Out of this, Rs. 400 crores is earmarked for AYUSH promotion and plan-expenditure.
- Excise duty on aerated sugary drinks and mineral water is increased from 18% to 21%.
- Excise duty on cigarettes and all other tobacco products, except bidi, is now increased by 10%-15%, depending on the product.
- Custom duty on natural latex rubber made balloons, which are used in manufacturing condoms, is increased from 10% to 20%.
- A health protection scheme, providing hospitalisation cover of Rs. 1,00,000, to every family will be launched. There will be an additional top-up of Rs. 30,000 to people above the age of 60.
- 3,000 new pharmacies under the Pradhan Mantri Jan Aushadi Yojana, focusing on generic drugs, will be opened next year.
- A National Dialysis Service will be launched, to set up affordable dialysis facilities in all district hospitals under the Public-Private-Partnership (PPP) model.
- Custom duty is removed from import of dialysis equipment, to help the above-mentioned scheme.
- Ministry of Human Resource Development is allocated Rs. 72,394 crores, an increase of 4.81% from this year’s budget estimates and 7.11% from revised estimates. Out of this, Rs. 43,554 crores will be allocated to school education while Rs. 28,840 crores will be for higher education.
- The allocation for Mid-day meal scheme is Rs. 9,700 crores, an increase of 5% compared to this year’s revised estimates. At the same time, allocation of Sarva Shiksha Abhiyaan is Rs. 22,500 crores, an increase of 2% on revised estimates of this year.
- A new funding agency named Higher Education Finance Agency (HEFA) will be set up to finance infrastructure expansion and renovation of govt institutions like IITs, IIITs, NITs, central universities etc. The agency will borrow funds from the capital markets, supplement them donations and CSR funds, and invest in improving infrastructure of the institutions. The initial fund of the agency will be Rs. 1,000 crores and an equal amount will be raised from 5 corporate donors, each contributing at least Rs. 200 crores.
- A new scheme will be launched to promote 10 public and 10 private institutions to emerge as world-class teaching and research institutions. These institutions will be provided more academic autonomy and liberty and will be freed from regulatory mechanism.
- IITs are given a hike of Rs. 700 crores in their allocation. However, no new IITs or IIMs are announced.
- 62 new Navodaya Vidyalayas will be opened over the next 2 years.
- A digital depository for educational certificates, mark-sheets, degrees, documents and academic awards will be opened.
- The allocation for Ministry for Skill Development and Entrepreneurship is now Rs. 1,804 crores, an increase of 73.8% from the revised estimates of this year. Out of this, Rs. 1,700 crores will be used to set up 1500 new multi-skill centres.
- Stand Up India scheme will be launched to facilitate 2 projects per bank branch.
- 100 Model Career Centres will be operational by the end of next year, under National Career Service platform.
- The Ministry of Skill Development and Entrepreneurship will target providing training to one crore youth over the next 3 years.
- Central govt will contribute 8.33% of employee pension scheme (which is similar to Provident Fund) for all new employees in EPFO for their first 3 years of employment. This scheme will be applicable to those employees only whose monthly salary is up to Rs. 15,000. A provision of Rs. 1,000 crores has been made for this scheme.
- The govt will set up National Board for Skill Development Certification, in partnership with the industry and academia.
- Entrepreneurship Education and Training will be provided in 2,200 colleges, 300 schools, 500 govt industrial training institutes and 50 vocational training centres through Massive Open Online Courses (MOOCs).
- The govt is finally focusing on health and education, the 2 most crucial sectors of the economy. After neglecting these sectors for the last 2 years, this is a welcome step.
- The allocation to National Health Mission is still very low and needs to be increased.
- The Prime Minister is focusing on AYUSH ministry but the fact that it could not spend over 17.5% of its allocated budget this year is worrisome.
- Increasing excise duty on mineral water is inexplicable. This will affect people’s health.
- Bidi-making is a labour intensive industry. Governments do not increase taxes on this industry to ensure that labourers are not fired by the industry. However, I think Bidi causes more harm to Indians as over 75% of smokers in India consume Bidi. So, Bidi should no longer be given this preferential treatment and should be taxed just like other tobacco products.
- Increased custom duty on latex will make condoms expensive which will harm the family-planning measures taken by the govt. Experts believe this step is taken to boost local industry and discourage imports. In the long run, prices will come down, once procurement of latex from local manufacturers begins.
- The health protection scheme and opening new pharmacies are great steps taken by the govt and their proper implementation can do wonders.
- The dialysis scheme is another great step. Our country has a growing number of diabetes hypertension patients. Both of these problems affect kidneys in the long run.
- It’s really alarming that HRD ministry could not spent its budget this year. This seriously hampers the education in the country.
- More allocation to Mid Day Meal schemes and Sarva Siksha Abhiyaan was needed as these 2 initiatives are the back-bone of our rural education system.
- HEFA and the new scheme promoting 20 educational institutions are the need of the hour as govt needs to step away from everyday functioning of the institutions and decrease regulation in the sector.
- All the measures taken up for skill development are appreciable as India has only 4% skilled labour. The step related to MOOCs is praiseworthy as it will give a major boost to uniform skill development. The govt’s plan to contribute to the EPFO may encourage employers to bring into books the informal employees and to follow hire-and-fire policy, but the govt will be able to create a central database of skilled and employed personnel.
We hope you liked this article. If you have any questions, please do ask via comments. We will be very happy to get back to you with all the answers. Our next article will focus on steps taken for Energy, Oil and Minerals sectors. Happy learning!