Budget Spotlight

New Delhi, 3 February 2017

Budget Thrust

RURAL INDIA & MASSES

By Dhurjati Mukherjee

Notwithstanding the Opposition’s concern over the presentation of the Union Budget before ensuing elections to five States, the fact is it is mature and pro-growth and is geared towards development of the rural and agricultural sector. The emphasis towards development of social infrastructure as also the rural sector has rightly been taken care of.    

The Government’s thrust was manifest in the President’s address to both Houses of Parliament, where he clearly stated that poverty eradication was a priority as also ensuring ‘universal basic income’ for all, keeping in view the conditions of the poor, the dalits and the kisans, who still struggle for a decent livelihood. While the need for social security for the downtrodden has been often heard, its implementation has been a matter of concern with the question where would the resources –anything between 4 and 5 per cent of GDP—come from?   

While the thrust on rural sector is much on similar lines as the previous year’s Budget, the fact is that it deserves the attention in revamping the infrastructure facilities. Even if providing urban facilities in rural areas (PURA) may take time to be accomplished, given resource constraints, there is need to focus and transform our villages.    

This is exactly what Union Finance Minister Arun Jaitley has done. The total allocation for agriculture and rural sector has been a record of Rs 1.88 lakh crores, which definitely needs appreciation. While MGNREGA has theoretically received the highest allocation of Rs 48,000 crores with the avowed objective to create assets to improve productivity, it is imperative that for current schemes to continue at the prevalent rate another Rs 10,000 crores would be needed. Thus, along with wage arrears this would total to over Rs 13,000 crores by the end of the current financial year and the actual allocation comes to around Rs 35,000 crores, less than the allocation in 2016-17.

Other significant steps include: Creation of Dairy Processing Infrastructure Development Fund with an allocation of Rs 2000 crores to help gear up processing capacity of an additional 500 lakh litres of milk every day; Preparation of a modern law on contract farming to be sent to States for adoption and higher productivity for fragmented plots; Coverage of Fasal Bima Yojana increased from 30 to 40 per cent and allocation of Rs 9000 crores made for this purpose though the sum is less than Rs 13,240 crores, as per RE of 2016-17; Setting up a dedicated Micro Irrigation Fund the goal of “per drop, more crop”; 648 Krishi Vigyan Kendras (KVKs) to have mini labs to enable soil testing.

Though all the above may be encouraging, the amount going towards research and education of agriculture is a meager Rs 6800 crores, which is way below one per cent of the agri GDP. This must be considered as experimentation and innovation for higher yields is necessary to ensure that farmers’ income be doubled by 2022. Even though making this ambitious resolve of Finance Minister a reality may be very difficult, it is pertinent that if the focus is maintained on improving agriculture, there could be some increase in farm income.    

The importance given to agriculture in rural sector is justified following a Twitter poll conducted by the Ministry of Finance, just before the Budget, which showed there were 66 per cent of around 21,400 respondents seeking a more agriculture focused Budget. As agreed, problems in the sector are many but the most important is that the average size of the farm is 1.15 hectares and is likely to shrink further in 2020-21. And, as per 2013 Situation Assessment of Farmers/Agricultural Households, one cannot earn a living from a smaller farm less than one hectare. Besides, other major problems are those of finance, marketing and availability of inputs at affordable rates.      

A point that needs mention is that there should have been an initiative to increase at least by 15 or 20 per cent the number of KVKs in the country. We have been hearing the need for lab-to-land approach for decades and unless technology is made available at the sub-divisional levels, farming problems cannot be resolved. Such KVKs could guide farmers on diversification of agriculture, organic methods, dryland agriculture, less reliance on chemicals etc. 

Some experts have pointed that the bulk of farm credit outlay of Rs 10 lakh crores, for which an interest subvention scheme of three per cent is provided if paid back in time, will be availed by the agri business companies and not farmers. Estimates suggest that roughly Rs 8 lakh crores out of the amount would go to the corporate in the name of farmers. Instead, there should have been some form of debt relief to farmers by reducing interest on loans, if not striking a portion of the farm debt outright.  

The Government’s resolve to address the shelter needs of the poor and EWS is too in the right direction. Affordable housing for all by 2019 and building one crore homes are significant announcements. Accordingly, the allocation for Pradhan Mantri Awas Yojana has been hiked to Rs 23,000 crores and it is expected that strict monitoring at the grass-root and panchayat level would ensure the houses are constructed, as per standards. The push to affordable housing is expected to have a positive impact not just in core construction sectors but also in lending business of banks, NBFCs and credit takeoff, which is the need of the hour.     

Another significant announcement has been achieving 100 per cent rural electrification by May 2018. Indeed, power supply should be at least for four to five hours so that the benefits of power could be derived by the beneficiaries as many work in their homes to earn a living or supplement the family income. Besides, allocation of Rs 10,000 crores for the Bharat Net project is expected to spur rural connectivity as it will provide high-speed broadband to 1.5 lakh gram panchayats. 

As regards health, the allocation of a mere one per cent of GDP is not quite satisfactory to tackle the growing quantum of diseases. Moreover, there is inadequate health infrastructure in the backward sub-divisions of the country, specially in northern and north-eastern States. There is need for health centres in each block and small hospitals in each sub-division, equipped to treat patients of all types of diseases, except infectious and complicated ones. The Budget resolve to upgrade 1.5 lakh such Sub-Centres into Health & Wellness Centres is a positive step but more needs to be done.

The other essential announcement is the target to abolish TB by 2025. According to Global Tuberculosis Report 2016, India accounts for 24 per cent of the global cases. It is expected that in the coming nine years or so, TB which affects mainly the poorer sections, would be abolished or drastically brought to nominal levels. It may also be noted that the increase of rural sanitation allocation would steadily control open defecation and help in preventing communicable diseases.      

In the realm of education, the stress would be on spread of science, local innovation and gender parity. But the spend in this sector has not received the boost that was expected as perhaps the Government is looking at the private sector, which has turned higher education into a safe business for itself. The allocation for Sarva Siksha Abhiyan is marginally up by 4.4 per cent while that of higher education is at a standstill at Rs 1300 crores. The only redeeming feature is the proposal to launch Skill Acquisition and Knowledge Awareness (SANKAPL) at a cost of Rs 4000 crores, which would impart training to 3.5 crore youth.

In sum, though a section of economists and planners cry hoarse over the Government providing and/or increasing subsidies to the farmers and rural poor, it needs to be noted that the corporate groups get more subsidies, directly or indirectly. While the business houses claim that such subsidies are aimed at adding to the GDP of the nation, those given to the farming community are for producing food for the country as also for their struggle for survival. Moreover, looking after the interests of the poor and the downtrodden and ensuring for them a better livelihood cannot be termed ‘populism’.   

As is well known, the transformation of the rural sector has become imperative as India emerges a powerful force in the world. As such, the thrust given to it is the need of what one could call ‘real development’. The benefits of it must reach the masses, whose living standards need a boost and must be brought into the mainstream of life and activity. ---INFA

(Copyright, India News and Feature Alliance)