Spotlight
New Delhi, 5 February
2018
Budget & Rural Sector
WILL HOPE HELP IN TURNAROUND?
By Dhurjati Mukherjee
As indicated in the
Economic Survey, which had focussed on the farm sector, employment and
education, the present Union Budget has met the expectations, at least,
theoretically of most experts who have been deliberating about the possible
thrust areas. It has found a mixed response from various sections which include
politicians, economists, media etc. But though one may feel that Finance
Minister Jaitley has done his job reasonably, much will depend on the promises
made.
As expected the thrust
has been on agriculture in view of the agrarian crisis that has plagued the
country In fact, as the Survey pointed out that real agricultural GDP had
remained constant for the last four years. Moreover, it needs to be mentioned
that the BJP had promised in its election manifesto 2014 to ensure remunerative
prices for the famers’ produce and double their income by 2022. There were also
suggestions by experts before during consultations about the need to devise a
more systematic procurement method, raising farm credit targets and expanding
the network e-NAM (National Agriculture Market).
Thus, the thrust on
agriculture needs to be commended. In fact, hiking the minimum support price by
1.5 times may be considered a roadmap for doubling farmers’ income in the
coming years. Here, however, it needs to be pointed out that the number of poor
and marginal farmers who would actually be benefitted has been rightly
questioned which only time will tell. By hiking the agricultural credit target
to Rs 11 lakh crores, Jaitley aims to ensure farmers’ a 50% return on their
cost of production.
It is noteworthy that
Rs 2600 crores has been earmarked to boost groundwater irrigation under the
Prime Minister Krishi Sanchai Yojana, which targets 96 irrigation deprived
districts where less than 30% of the land holdings get water. The scope of the
Long Term Irrigation Fund (LITF) under NABARD would also be expanded to cover
specified command area development projects. Similarly an additional allocation
of Rs 1000 crores has been rightly made for extending irrigation, strengthening
facilities and improving groundwater management in rural areas.
Jaitley’s observation
that “the government’s commitment to farmer welfare is evident by
institutionalising mechanisms such as development of gramin agricultural
markets, increasing minimum support price (MSP), promoting cluster-based
agriculture, developing last mile infrastructure and a fillip to realise the
untapped export potential of the sector” appears encouraging. The proposal for
creation of the Agri-Market Infrastructure Fund, with a corpus of Rs 2000
crores is for developing and upgrading agricultural marketing infrastructure in
the 22,000 gramin agricultural markets and 585 agricultural produce market
committees (APMCs).
A significant
proposal is ‘Operations Green’ on the lines of ‘Operations Flood’ to tackle the
volatility of tomato, onion and potato prices. The awareness that traditional
agriculture cannot provide adequate income, animal husbandry, fisheries and
aquaculture are some of the rural activities that stand to gain from the
Budget. Rs 10,000 crore fund to finance infrastructure requirements of
fisheries, aquaculture and animal husbandry has been created to generate rural
employment. But whether these measures would help in doubling farm incomes
during 2017-2022 remains a big question.
Apparently, the
budgetary allocation for MNREGA has been kept at Rs 55,000 crores which is
exactly the same the scheme is likely to spend in 2017-18. Likewise, the job
scheme did not make budgetary headlines, possibly due to inadequate allocation
though it may be expected that the government gives extra money in the revised
estimates.
While recasting the
‘Restructured National Bamboo Mission’ the Jaitley aptly referred to bamboo as
‘green gold’ and made a sizeable outlay of Rs 1290 crores. This may help in
value addition and help schedules castes and tribes forest areas. However,
skill development in this sector would be needed.
The emphasis on rural
infrastructure development is also noteworthy where around Rs 14.34 lakh crores
has been earmarked. The expenditure is aimed at creating employment of 321
crore person days, 3.17 km of rural roads, 51 lakh new houses, 1.88 crore
toilets and provide 1.75 crore new household with electric connections besides
boosting agricultural growth. These obviously look quite encouraging though
much will depend on the efficiency of implementation, which unfortunately, is
not quite good.
Social infrastructure
development has also received due attention. Though the government has
increased cess by one per cent to 4, the allocations towards health and
education have not been hiked significantly. In the realm of heath, the
proposal to set up 24 new government medical colleges and hospitals may not
meet the target of setting up one medical college for three parliamentary
constituencies. It would have been better if the figure of 24 would have been
doubled. The wellness centres proposed for maternal and child health may help
the rural sector and the provision of Rs 1200 crores appears quite satisfactory
though more funds would be necessary.
The state of health
facilities in villages is in a poor condition and the impoverished sections do
not have the money to avail private sector treatment. Undeniably upgrading
health centres in the villages was very much necessary and unfortunately there
is no such announcement. However Rs 5 lakh medical reimbursement under the
National Health Protection Scheme (NHPS), provides an annual coverage of Rs
50,000 and is envisaged to benefit 10 crore poor families, needs to be
appreciated.
There have been
allegations, and not without reason, that implementing all these plans would
require enhanced resources that have not been allocated. It stands at Rs 9975
crores compared to Rs 9500 crores (Budget estimate) of 2017-18. Thus it remains
to be seen how Jaitley’s promise of providing health facilities to the poor
would be realised. Remember, India’s allocation for health as percentage of GDP
is much lower compared to the other emerging economies like Brazil, China,
South Africa, etc.
The promise to create
70 lakh more jobs appears to be overstated. Economists feel that this is highly
unrealistic figure though the emphasis on both physical and social
infrastructure definitely may create some direct and indirect jobs. The
envisaged investment of Rs 5.35 lakh crore for Phase-I of the Bharat Mala
programme for roads and capex of Rs 1.46 lakh crore for railways may provide
the momentum for creation of jobs. It is difficult to believe that there would
be much increase in employment creation in the big formal sector but there is
potential in rural infrastructure development and labour-intensive small and
micro sectors.
As regards the
education, there is not much and the allocation, as usual, has been much below
what is necessary. School education and literacy has recorded a modest 7.86%
increase but it is noteworthy that Eklavya Vidyalayas would be set up in every
block which has 50% of population and at least 20,000 tribals on the lines of
Navodaya Vidyalayas. There is no plan to set up central universities in
specialised areas like agriculture, dairy etc. which are necessary to give
thrust to agriculture and rural development. Also the government could have
planned to assist State governments in setting up model schools in each
sub-division or two in each district by giving say 50% grant.
Whether the Budget is
populist or part of a social philosophy to boost the rural sector may be
debated. Congress leaders have dubbed it as mere rhetoric and un-implementable
promises compared to resource allocations, while the Leftists have found
nothing for social outcasts, SCs, STs and OBCs. However, a lot of expectations
have been raised and only the Government’s sincerity and implementation
schedule will make these a reality. Moreover, resource allocation in some
sectors needs to be boosted, which the government may consider while
formulating the revised estimates. --- INFA
(Copyright, India
News & Feature Alliance)
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