Home > 2016 > Union Budget 2016-17: Transforming Rural India

Mainstream, VOL LIV No 12 New Delhi March 12, 2016

Union Budget 2016-17: Transforming Rural India

Sunday 13 March 2016

by P.K. Bhargava and Jyoti Bhargava

The importance of agriculture as also of the rural sector cannot be undermined in India as a large part of the population still lives in the villages and earns its livelihood from agriculture. Unfortunately, the preceding two years have been of significant distress to this sector owing to the unfavourable monsoon. In this context, the initiatives incorporated in the Union Budget for 2016-17 deserve to be appreciated as they focus on doubling the farmers’ income in the next five years (2022) together with emphasis on rural employment and infrastructure.

To protect the farmers from the vagaries of the monsoon, a notable scheme ‘The Pradhan Mantri Fasal Bima Yojana’ has been launched that will enable the farmers to face the adverse consequences of nature. It is reported that the farmer will pay a nominal amount of insurance premium and get the highest-ever compensation in the event of any loss suffered. In addition, issues of optimal utilisation of water resources, creation of new infrastructure for irrigation, conservation of soil fertility with balanced use of fertiliser and providing value addition and connectivity from farm to markets, have been addressed.

While irrigation is a critical input for agricul-ture, a significant part (almost 54 per cent) of the net cultivated area in our country does not have this facility. Hence, the proposed implementation of 89 irrigation projects to irrigate 80.6 lakh hectares, creation of a dedicated Long Term Irrigation Fund in NABARD and simultaneously a major programme for sustainable management of ground water resources constitute important steps in this direction in the Budget. The ‘Pradhan Mantri Krishi Sinchai Yojana’ has also been strengthened and 28.5 lakh hectares will be brought under irrigation under this scheme. Further, to enable the farmers to make judicious use of fertilisers, the Soil Health Card Scheme is to be implemented with greater vigor whereby the farmers will get information about the nutrient level of the soil. To increase the crop yield in rain fed areas, organic farming is being promoted. As access to markets is critical for the income of farmers, the Budget mentions that the Unified Agricultural Marketing e-platform will be dedicated to the nation on the birthday of Dr Babasaheb Ambedkar on April 14 this year. Steps have also been incorporated in this Budget to enhance the production of pulses, making dairy more remunerative, the benefit of MSP reaching the farmers and ensuring adequate and timely flow of credit to them.

If agriculture is to be strengthened in the country, the rural economy must be developed. Gram Panchayats at the village level, if strengthened financially, as this Budget proposes, can be a game-changer in rural life. The Budget mentions that the “Ministry of Panchayati Raj will work with the States and evolve guidelines to actualise this”. A new restructured scheme, namely, ‘Rashtriya Gram Swaraj Abhiyan’ is proposed to be launched so that the Panchayati Raj Institutions develop governance capabilities to deliver on the sustainable development goals.

Road connectivity and availability of electricity in the rural areas constitute the two most important pillars of rural infrastructure. The implementation of the Pradhan Mantri Gram Sadak Yojana (PMGSY) with greater emphasis in this Budget (earlier it suffered due to underfunding) is a very significant step of the present government that raised the allocation in the last two years and has now allocated Rs 19,000 crores in 2016-17. It is reported that as on February 23, 2016, 5542 villages have been electrified and the Budget for 2016-17 proclaims that the government is committed to achieve 100 per cent village electrification by May 1, 2018. The earlier it is done, the better would it be.

In the context of the changing scenario, the need to spread digital literacy in rural India cannot be overemphasised. Of the 16.8 crore rural households as many as 12 crore households do not have computers and are unlikely to have digitally literate persons. Hence, the proposal to launch a new Digital Literacy Mission Scheme for rural India to cover around six crore additional households within the next three years is a significant step in this context. Spread of digital literacy shall help the rural people in a variety of ways, including the modernisation of land records which is essential for dispute-free titles. It is of great significance that the National Land Record Modernisation Programme has been revamped under the Digital India Initiative and will be implemented as a Central sector scheme from April 1, 2016.

The Budget initiatives and allocations for various schemes and programmes signify the concern of the government for development of agriculture and the rural sector in India. Agriculture and farmers’ welfare have received a sum of Rs 35,984 crores and for rural development as a whole an amount of Rs 87,765 crores has been assigned in the Budget for 2016-17. Apart from this, a sum of Rs 38,500 crores has also been allocated for MGNREGS.

A significant feature of the Union Budget for 2016-17 is that specific measures to raise resources, such as Krishi Kalyan cess at 0.5 per cent on all taxable services and Krishi Kalyan surcharge at 7.5 per cent of undisclosed income, have been incorporated to be used for agriculture and rural economy.

While there appears to be a genuine effort on the part of the government to boost agriculture and rural economy of the country, the more rele-vant and serious concern is: how shall the various programmes/schemes be implemented? And how would the physical outcome match with the stipulated targets and objectives? The Finance Minister has, however, not outlined any administrative mechanism by which his thinking and ideas shall be translated into reality.

Prof P.K. Bhargava is a former Emeritus Fellow, University Grants Commission. Dr Jyoti Bhargava ia an Associate Professor, NPGC, Lucknow.