Recovery in rural demand is a sine qua non for reviving growth. Recognizing this, the Budget has announced crucial measures to restore the health of the rural economy.
Reviving the agrarian economy, which has seen distress on the back of two consecutive droughts, has been the fulcrum of the Budget this year, with a total allocation of ₹87,700 crore for rural development.
Towards this, a two-pronged approach has been adopted.
One, significant measures have been announced to raise agricultural productivity and enhance remunerative capacity in the farming sector through schemes such as crop insurance, soil health card, irrigation, unified rural market and organic farming, among others.
Among the agricultural schemes that have been announced, the refurbished crop insurance scheme has emerged as a game-changer for the farm sector.
Two, spending on rural infrastructure has been significantly enhanced, especially through programs for housing, roads and electrification. In particular, rural roads through the Pradhan Mantri Gram Sadak Yojana have found greater emphasis in the budget with total allocation being increased nearly four-fold to ₹19,000 crore.
The scope for MNREGA has been improved to provide greater employment opportunities and to include new public works; its allocation has been increased to an all-time high of ₹38,500 crore.
Among the agricultural schemes that have been announced, the refurbished crop insurance scheme has emerged as a game-changer for the farm sector. The new Pradhan Mantri Fasal Bima Yojana, with a total allocation of ₹5500 crore, is a departure from the previously existing crop insurance schemes. With a uniform premium of 2% for kharif crops, 1.5% for rabi crops and 5% for horticulture crops, no artificial capping of sum insured and leveraging of technology for claim settlement, the scheme looks propitious. There is hope that the scheme will help to improve insurance penetration among India's farming community and help shield the rural population from idiosyncratic climatic changes and vagaries of the monsoon.
Enhancing capital formation in the agriculture sector was the need of the hour and as such, a 31% growth in plan spending in agriculture following a de-growth of 18% in FY16 augurs well. This will help to improve the capital formation in agriculture which has languished at less than 3% of GDP since liberalization. Irrigation in particularly has got impetus through the creation of a long-term irrigation fund with a corpus of ₹20,000 crore under NABARD.
By converting challenges into opportunities the Budget has paved the way for higher and more sustainable and inclusive growth.
The FY17 Union Budget has clearly been guided by the principles of saamaajik vikas or social development. The Finance Minister has chosen to protect and empower the vulnerable sections of society with the objective of attaining inclusive growth.
Social empowerment is key for providing equal opportunity. Here the FY17 Budget has emphasized the need to change mindsets by converting "job seekers to job providers".
The approach towards social protection is primarily via boosting healthcare access. In this context, the new health protection scheme with a cover of ₹1 lakh per family, opening up of 3000 medicine stores under PM's Jan Aushadhi Yojana, and the proposal for a National Dialysis Services program via the PPP mode are exemplary steps. In addition, the provision of LPG connection at a concessional rate to all BPL families is also likely to reduce health-related vulnerabilities with a switch to a cleaner source of household energy.
Social empowerment is key for providing equal opportunity to all. Here the FY17 Budget has emphasized the need to change mindsets by converting "job seekers to job providers". In this context, the Stand Up India Scheme and the National SC/ST Hub in partnership with banks and industry associations will be important for promoting entrepreneurial spirit in the country.
I believe the focus on agricultural security, rural economy and social sector empowerment will bring vikas to Bharat.
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