The Gist of Kurukshetra: July 2013

Contents

• Food Security
• Drinking Water
• National Livestok Mission
• National Food Security Mission
• Swabhimaan-A Significant Beginning
• First Ever Hackathon by the Planning Commission on the 12th Plan
• UNWTO Conference on Sustainable Tourism Development to be Held at Hyderabad from 12th to 14th April

Allocation for Inclusive Growth

The recently released pre-Budget  Economic Survey (2012-13) has predicted Gross Domestic Product (GDP) growth of 6.1 per cent to 6.7 per cent during the next fiscal 2013-14. This is 1.1 to 1.7 percentage points higher than this year’s estimated GDP growth rate of 5 per cent. The Survey, while reflecting the impact of the global economic disturbances on Indian economy, expressed its optimism regarding the recovery of the world economy during 2013-14. Accordingly, the Survey outlined a slew of prudent economic measures with a view to improve the outlook of the country’s economy during 2013-14.

In the backdrop of uncertainties in the global economic environment, the inflationary pressure in India, prevailing weaknesses in the industrial activity, rising fiscal deficits, growing cost of credit along with weak domestic business environment and lack of robust policies to contain constraints in the smooth investment flow into the country, it was expected that Budget 2012-13 would strive to ensure the 12th Five Year Plan (2012-17) objective of an all-inclusive growth and to bridge the development deficits in the social sector. In doing so, it was expected that the Budget would not only step up public expenditure on the social sector schemes/programmes, but also ensure the quality of expenditure backed by revamped governance system at the grass-root level of implementation.

The Union Budget 2013-14 was presented amidst expectations of giving a boost to the agriculture, rural infrastructure and rural non-farm activities, thereby reviving job opportunities in the rural areas in addition to laying down a road map towards effective management of food economy. Budget 2013-14 has expectedly continued its stress on the common man and rural India, taking steps for consolidating efforts on rural development, employment, food security, education, health and housing. Some of the important issues concerning social and physical infrastructure in the rural areas have been analysed below.

Rural Employment, Housing and Roads and Bridges

The 2013-14 plan outlay for rural employment, housing, roads and bridges (Table 3) indicates that allocations to rural employment have not increased. While the outlay towards housing marked 21.7 per cent enhancement in allocation over 2012-13, there was a mere 3.2 per cent increment in the plan allocation for roads and bridges in 2013-14 over 2012-13. This indicates the government’s continued and prioritised focus of expenditure in vital social sector components like employment, housing and road and bridges during 2013-14.

The 2013-14 plan allocation for Mahatma Gandhi National Rural Employment Act (MGNREGA) has been kept unchanged whereas Aajeevika (earlier National Rural Livelihood Mission) has registered a mere 2.7 per cent hike in its budget allocation in 2013-14 against the Budget Estimates of 2012-13. The rural housing was allocated Rs. 13,665.6 cr. in 2013-14 against Rs. 9,966 cr. in 2012-13, thereby registering a hefty 37.12 per cent hike.

The enactment and implementation of a right-based MGNREGA has undoubtedly marked a paradigm shift from the existing wage employment programmes. This is primarily to be achieved by taking up project-oriented activities covering works on water conservation/harvesting, drought/flood control, plantation, land development, rural connectivity, etc. During 2012-13, the revised estimate for MGNREGA is pegged at Rs. 29,387 cr. which is Rs. 3,613 cr. less than the B.E. of the year. This indicates that this wage employment programme has stabilized in its operation and absorption in rural areas. The B.E. for 2013-14 in case of MGNREGA is kept at Rs. 33,000 cr. The need of the hour is to improve quality of assets created and to bring about synergy between MGNREGA and agriculture and allied rural livelihoods. This endeavour will not only uplift the under-privileged and socially and economically vulnerable, but also support in making the agriculture a viable occupation.

Food Security

The Budget has kept a provision of Rs. 10,000 cr. to share the monetary burden of implementing National Food Security Act after its acceptance in the Parliament the next fiscal. While this is a laudable step taken by the Government in ensuring food security to the poor, it is expected that to fulfill the intended objective of access to food at affordable prices, the government could look into the issues of pilferage in the supply of foodgrain, inefficient food management, high transport cost, quality of the food-grains supplied to the beneficiaries, etc. in the proposed law.

Surplus Central Schemes

The Five Year Plans” focus on creation of Social and economic infrastructure for rapid and inclusive growth has led to a significant increase in Plan expenditure though a plethora of centrally sponsored schemes. The Central Ministries/Departments monitor Centrally Sponsored Plan Schemes in the respective subject areas. This exercise starts with releasing funds to the State Governments. Many schemes/Programmes are in operation for long and a few are added to the existing pool of schemes each year. A large amount of investments are made on this without adequate evaluation on the impact of these schemes/programmes on the beneficiaries. Considering the significance of reduction in the number of centrally sponsored schemes, the Budget has announced to restrict the existing 173 such schemes to 70 during 2013-14.

The controlling Union ministries/Departments should not only confine to their role of provision of budget and release of the funds to the state governments but also to effectively monitor the utilisation of the funds released earlier in accordance with the guidelines and capacity of the respective state governments to actually spend the balance from the previous years and releases during the current year. This will not only put a check on the leakages of funds but will also help us in mapping the appropriate financial absorption capacity of the States under each of the schemes/programmes.

The Budget has reflected the prioritized social sector development agenda of the government and attempted to address issues related to inclusion without compromising the reform processes unveiled in the recent past. The budget has also announced review of schemes once in two years which is a much desired and welcomed step. Continuous review and evaluation of all centrally sponsored economic ‘and social welfare schemes would not only ensure quality governance of the welfare interventions through convergence of all resources at ground zero but also would lead the government in matching the outlays with the intended outcome.

Allocation for Rural Development could have been Larger if Past Funds were spent in Full

Mahatma Gandhi’s words that India lives in its villages rings true even today. The majority of its 1.2 billion people still live in villages and have agriculture as their means of livelihood. Any plan for the country cannot but have its particular focus on the development of the vast rural areas and the people inhibiting them. Successive budgets have taken care of the rural region by allocating liberal funds to improve the lot of the rural population.
As expected, the rural development has been given its deserving priority in the union budget .2013-14 presented by finance minister P Chidambaram on February 28.

However, the allocation of funds could have been much larger in real terms had the rural development ministry had been able to spend the allocated funds in the last budget substantially, if not fully before the budget presentation. The rural development ministry, which carries out many of the government’s pro-poor programmes, received a 46 per cent hike in its allocation. The budget has proposed to allocate to the ministry Rs. 80, 194 crore in 2013-14.

The rural development ministry has failed to spend the allocated funds on schemes like rural roads and rural housing. The rural development minister, Mr. Jairam Ramesh, who has displayed passion and devotion in his work, has owned up responsibility. “It is a reality. Rs. 75,000 crore were allocated and we could only spend Rs. 55,000 crore. There is collective responsibility but I cannot pass in the responsibility to states. As minister, I have to be held accountable,” he said post budget. He attributed the low absorption of funds to “serious administrative weaknesses” in the poor states and complicated financial procedures at the Centre that delayed fund release. “Both are important: I am not running away from the responsibility.

Drinking Water

The allocation for drinking water and sanitation will be Rs. 15, 260 crore.

The finance minister also proposed to provided Rs. 1,400 crore towards setting up of water purification plants as there are still 2,000 arsenicand 12,000 fluoride-affected rural habitations in the country.

JNNURM

The Jawaharlal Nehru National Urban Renewal Mission (JNNURM) is being continued in the 12th Plan. The 14,000 buses sanctioned during to 2012 have made a big contribution to urban transport. The budget proposes to provide Rs. 14,873 Bringing the green revolution to eastern India crore for JNNURM, as against the RE of Rs. 7,383 has been a remarkable success. Assam, Bihar, crore in the current year. Out of this, a significant Chhattisgarh and West Bengal have increased portion will be used to support the purchase of up to Rs. 10,000 buses, especially by the hill States.

Green Revolution

The original Green Revolution States face the problem of stagnating yields and over-exploitation of water resources. The answer lies in crop diversification. I propose to allocate Rs. 500 crore to start a programme of crop diversification that would promote technological innovation and encourage farmers to choose crop alternatives.

The Rashtriya Krishi Vikas Yojana is intended to mobilise higher investment in agriculture and the National Food Security Mission is intended to bridge yield gaps. The budget proposes to provide Rs. 9, 954 crore and Rs. 2, 250 crore, respectively, for these two programmes.

Small and marginal farmers are vulnerable everywhere, and especially so in drought prone and ecologically-stressed regions. Watershed management is crucial to improve productivity of land and water use. The budget proposes to increase the allocation for the integrated watershed programme from RS.3 050 crore in 2012-13 (BE) to Rs.5, 387 crore.

National Livestok Mission

The National Livestock Mission will be launched in 2013–14 to attract investment and to enhance productivity, taking into account local agro-climatic conditions. The budget proposes to provide Rs. 307 crore for the Mission. There will be a sub Mission for increasing the availability of feed and fodder.

Rashtriya Krishi Vikash Yojana

The Rashtriya Krishi Vikas Yojana (RKVY) was launched in 2007-8 with an outlay of Rs. 25,000 crore in the Eleventh Plan for incentivizing states to enhance public investment. States were provided Rs 22,408.79 crore under the RKVY during Eleventh Five Year Plan. The RKVY format permits taking up national priorities as sub-schemes, allowing the states flexibility in project selection and implementation. Allocation under the RKVY for 2012-13 is Rs 9,217 crore. The RKVY links 50 per cent of central assistance to those states that have stepped up the percentage of state plan expenditure on the agriculture and allied sector. A total of 5,768 projects were taken up by states in the Eleventh Plan of which 3,343 had been completed till December end 2012. The Rashtriya Krishi Vikas Yojana is intended to mobilise higher investment in agriculture and for this programme the Finance Minister proposed to provide Rs 9,954 crore in the union budget of 2013-14. )

National Food Security Mission

Go enhance the production of rice, wheat, and pulses by 10, 8, and 2 million tonnes respectively by the end of the Eleventh Plan through area expansion and productivity enhancement; restoring soil fertility and productivity; creating employment opportunities; and enhancing farm-level economy to restore the confidence of farmers of targeted districts, a centrally sponsored National Food Security Mission (NFSM) was launched in 2007-8 with three major components, viz. NFSM-Rice, NFSM-Wheat, and NFSM-Pulses. During the Eleventh Five Year Plan, NFSM-Rice was implemented in 144 districts of 16 states, NFSM-Wheat in 142 districts of 9 states and NFSM-Pulses in 468 districts of 16 states. In 2012-13, six north-eastern states, viz. Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, and Sikkim were included under NFSM-Rice and the hill states of Himachal Pradesh, and Uttarakhand under NFSM-Rice and Wheat and J & K under NFSM-wheat. Specifically, during2012-13 a Special Plan to achieve 19+ million tonnes of pulses production during kharif 2012 was launched with a total allocation of Rs 153.5 crore comprising Rs 107.3 crore for activities to be undertaken under the NFSM and Rs 46.2 crore for activities to be undertaken under the Micro Irrigation Scheme. During 2012-13, Rs. 87.0 crore has been allocated for additional area coverage of pulses during rabi/summer 2012-13. Taking into account the significance of the NFSM, Finance Minister proposed to provide Rs 2,250 crore for this programme in the union budget of 2013-14, which will a further step forward to achieve the national food security.

Union Budget 2013 – 14: Major Ingredients for Rural Growth at a Glance

• Rs. 80, 194 crore allocation for Ministry of Rural Development in 2013-14
• Rs. 33,000 crore for MGNREGA
• Drinking water and sanitation receives Rs. 15,260 crore; Rs. 1,400 crore has been allocated towards setting up of water purification plants as there are still 2,000 arsenic – and 12,000 fluoride-affected rural habitations in the country.
• The target for farm credit for 2013-14 has been set at Rs. 7,00,000 crore against Rs. 5,75,000 crore during the current year
• Eastern Indian states to get Rs. 1,000 crore allocation for improving agriculture production
• Rs. 500 crore earmarked for programme on crop diversification
• Rs. 10,000 crore allotted for National Food Security towards the incremental cost
• Integrated Child Development Services (ICDS) Scheme gets Rs. 17,700 crore which is 11.7 percent more than the current year
• Rs. 27,049 crore allocation to the Agriculture Ministry in 2013-14
• Rs. 5,000 crore for National Bank for Agriculture and Rural Development (NABARD) for agricultural storage facilities; Godowns to be constructed coordinating with the Gram panchayts
• Rs. 10,000 crore earmarked for National Food Security towards incremental cost
• The UPA government’s ambitious project ‘National Urban Health Mission’ focusing on providing basic health care services to the urban poor has been grouped with the National Rural Health Mission under one umbrella named as the ‘New National Health Mission’. The budgetary allocation under this mission has been fixed at Rupees 21,239 crore, which is an increase of 24.3 percent over the revised expenditure.
• An Institute for agriculture biotechnology will be set up in Ranchi, Jharkhand

Union Budget Focuses on Agriculture to Boost Pan India Green Revolution

Agriculture has the responsibility to feed 1,200 million people to feed, which is a huge responsibility. The farm sector achieved 3.6 per cent growth during the 11th Five Year Plan (2007-12) which was much higher than growth of 2.5 and 2.4 per cent during 9th and 10th Plans. Food grains production in India has shown remarkable improvement in recent years. The production of food grains in 2011-12 was at a record high of 259.32 million tones. In the global slowdown of economy and downturn in overall exports, agriculture and allied products during 2011-12 accounted for 9.08 per cent of India’s total exports against 6.9 per cent during 2010-11. India has achieved this feat by multi-pronged strategies and technologies such as Green revolution, Blue revolution, white revolution and of course the latest yellow revolution and is now poised for Rainbow revolution. There is need for continues efforts for infusing of technology, capital and human resource for the accelerated growth. Food and Agriculture Organization have indicated that agriculture in developing countries would need an investment of around US $ 30 billion to achieve the goal, set by the World Food Summit in 1996, of reducing the number of hungry people by half by 2015.The Union Budget for 2013-14 is focussed on agriculture with 22 per cent more funds to the agriculture ministry at Rs. 27,049 crore.

Initiative of Bringing Green Revolution to Eastern India (BGREI) has resulted in increased production and productivity of paddy. Last year, allocation for the scheme was pegged at Rs. 1,000 crore and this year also stress has been given to this important segment by providing same amount of Rs. 1000 crore. This scheme has resulted in impressive increase in production of food grains with the eastern region now turning a food surplus region in the eastern region including Assam, Bihar, Chhattisgarh, Jharkhand, Odisha, Eastern Uttar Pradesh & West Bengal. The BGREI is a sub-scheme of the Rashtriya Krishi Vikas Yojna (RKVYJ ) and thus this flagship schemes has been provided Rs. 9,954 crore. Another important scheme, National Food Security Mission has been provide Rs. 2,250 crore. Thus, the Budget is focused on augmentation of green revolution by proposing various measures like continuing support to green revolution in Eastern India, crop diversification in original green revolution states, bridging yield gaps between investment in agriculture and National Food Security Mission, Integrated Watershed Programme, pilot programme on Nutri-Farms, establishing National Institute of Biotic Stress Management and a pilot scheme to replant and rejuvenate coconut gardens. The budget proposes to start a pilot programme on Nutri-Farms for introducing new crop varieties that are rich in micro-nutrients such as iron-rich bajra, protein-rich maize and zinc-rich wheat. A sum of upto Rs. 200 crore has been allocated to start a sufficient number of pilots in the districts most affected by malnutrition. Ministry of Agriculture will formulate a scheme in this regard and this will help to check the malnutrition in the most affected districts of the country. Crop diversification is must for the foodgrain bowls of our country to halt the depleting water table and soil degradation. The budget has a provision of Rs. 500 crore for crop diversification in states covered during the green revolution such as Punjab and Haryana which are facing stagnation in farm yields.

Swabhimaan-A Significant Beginning

Jamal the protagonist of the film ‘Slumdog Millionnaire’ would surely have faced a problem in en-cashing his cheque that he won from the contest “Who wants to be a millionaire”! In all probabilities he would not have a bank account. And this is a hard reality!

Despite long and impressive strides of the Indian banking system during the last forty-four odd years (bank nationalization was done in 1969) majority of the Indian people are still outside banks’ ambit. The campaign ‘Swabimaan’ was basically launched during 2010-11 and extended in 2012-13 to include these left outs in the banking foray. In his budget speech in 2012 the union Finance Minister mentioned that “In 2010-11, “Swabhimaan” campaign was launched to extend banking facilities .... to habitations having population in excess of 2000 .... ln 2012-13, I propose to extend the “Swabhimaan” campaign to habitations with population of more than 1000 in North Eastern and hilly States and to other habitations which have crossed population of 2,000 as per Census 2011.”

The Backdrop

Bank nationalization and directed credit though had weeded out the moneylenders from the Indian rural scenario to a great extent yet they are the second most-preferred source of loan (NSSO’s report no.498 published in 2003). Obviously this is attributable to the rampant financial exclusion of the rural people involving absence of access to financial services in general and to formal credit in particular. Prolonged and persistent ‘Financial Exclusion’ in India as well in other developing countries in the wider perspective is a serious threat to economic progress, leads to a decline in investment and has the potential to fuel social tensions causing social exclusion. Financial exclusion can be conceived as the lack of access by certain segments of the society to suitable, low-cost, fair and safe financial products and services from mainstream financial service providers. While lack of awareness, low income, poverty and illiteracy among the people precipitate exclusion, distance from bank branch, branch timings, cumbersome documentation and complicated procedures, unsuitable products, alien language, staff attitudes, etc only bolster the trend. Consequently the extreme incompatibility between the service providers and the recipients make the informal credit sources more acceptable. In the flipside it results in compromised standard of living, higher costs, and increased exposure to unethical and unregulated standards and vulnerability to uninsured risks.

Financial Inclusion tries to address this widespread anomaly by providing:

(i) no-frills banking account for making and receiving payments,
(ii) savings product suited to the pattern of cash flows of a poor household,
(iii) money transfer facilities,
(iv) small loans and overdrafts for productive, personal and other purposes, & micro-insurance (life and non-life).

In this structure opening of bank accounts is considered an immediate and important intervention.

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