There were some big new developments in Saturday’s budget, but the stories emerged from the Budget’s fine print, not the speech in Parliament.
1. The biggest story of this Budget is a major change in the way the Union Government spends its money. Earlier this week, Finance Minister Arun Jaitley announced that the government had accepted the recommendations of the 14th Finance Commission and raised the States’ share in the net proceeds of union tax revenues from 32 per cent to 42 per cent.
With more of its pie going directly to States to spend as they like, the Union Government would begin reducing its allocations to the State plan and wind up some Centrally Sponsored Schemes. This has already happened in this budget.