The Gist of Kurukshetra: June - 2016

The Gist of Kurukshetra: June 2016

Budget 2016-17 : Empowering Bharat

Inclusive growth is multifaceted and can be addressed as growth with justice. Here justice signifies economic, social and political equality among all the people of a country. Inclusive growth in itself does not have any automatic mechanism to reach the deprived and excluded section of society; rather it is the outcome of planned and thoughtful course of actions of the government. Democracy will lose its shine if the deprived masses will not country. Inclusive growth planes for what has remained unplanned and reaches the unreachable. It requires implementing plans and programmes that uplifts the social and economic status of the deprived sections of society

Agricultural Development in Budget

Economics of wellbeing, in rural India, rests on economics of agricultural. Empirical evidences show that improvement in the life of poor; is directly connected to the agricultural development. Considering the above fact, our Finance Minister has taken well thought steps in allocation more funds to the agricultural sector. Rural India is synonymous with agriculture and development of both is intertwined. Contribution of agricultural sector to GDP is only 13.9 per cent, but it accommodates nearly half of out workforce. This contribution of agricultural sector to rural employment and rural livelihood itself signifies its national importance.

Budget has nine pillars for transformation of India, where the first two are ‘Agriculture’ and ‘Rural Development’. These two sectors would certainly be monumental in making development inclusive.

Agricultural Credit Support for Inclusiveness

Agricultural growth depends upon various factors and among them; credit is one of the most important. Availability and access to easy credit is indispensable to enhance agricultural production to meet the rising food demand for our growing population, and raw materials for the industry.

Hence, the provision of agricultural credit in the union budget, is on a continuous rise over the years. It has increased from Rs. 3,75,000 crores (2010-11) to Rs. 9,00,000 crores (2016-17), means more than two times over the period of six years.

Government intends to infuse soft cash to the stressed farmers. Not only the flow of farm credit has increased considerably but also target interest rate has been reduced from time to time. Also, to encourage those who are making timely payments, government has made provision of Rs. 15,000 crores as interest subvention.

Pradhan Mantri Krishi Sinchai Yojana: Fostering Irrigation

Farming is still, significantly dependent on monsoon in India. Out of net total arable lands, only 46 per cent are irrigated and even the distribution of irrigation facilities across state is highly skewed. Improved irrigated facilities and efficient water usage are crucial to enhance farm productivity. The gap between gross cropped area and gross irrigated area need to be further reduced.

The government started the ‘Pradhan Mantri Krishi Sinchai Yojana’, aimed at provision of water to every framer covering around 28.50 lakh hectares of land and improve the use of water efficiently to get ‘Per Drop More Crop’. Government has proposed to spend Rs. 17,000 crores to achieve the above said targets. Besides, 89 irrigarion projects under AIBP will be scrutinized by setting specific time frame. This will help to irrigate around 80.6 lakh hectares of land and requires Rs. 86, 500 crores to meet the expenses in the next five years. Focus on irrigation will surely enhance out agriculture productivity and that would help in containing current account deficit through higher agricultural exports.

Unified National Agricultural Market

As a welfare initiative, government intends to increase the income of farmers by creating a unified national agricultural market. At present, farm producers, due to lack of knowledge and information asymmetry, sell their produce in the market even below the price that can cover their input costs. Thus, farmers often feel distressed and discouraged to continue in farming. To overcome such problems, the current budget has planned to create a unified national agriculture market for farming where farmers can discover the price and would be able to sell their produce at a higher price and at anytime and anywhere. Once the unified national agricultural market gets established, farmers would not have to depend upon the local produce marketing committees and will not get exploited.

Rural Development in Budget

In India, 69 percent of the total population lives in villages and therefore rural development itself signifies its importance. Our economic growth and social development largely depends upon the success of a range of schemes for rural development. However, these initiatives and schemes of rural development should be redefined in order to customize them to the current needs of the people. Current budget does focus on this.

Pradhan Mantri Gram Sadak Yojana

Special emphasis is laid on rural road connectivity under the ‘Pradhan Manti Gram Sadak Yojana’ for which Rs. 19, 000 crores are allocated. This is highest of all the times and quite huge in comparison to 2012-13 allocation of Rs. 8, 885 crores and Rs. 9,805 crores in 2013-14. In addition, the total fund all allocated to the roads including the states’ share is Rs. 27, 000 crores. To take it further, government targets to complete 2.23 lakh kilometer of road by 2021 to connect 65,000 eligible habitations. This is a welcome step which will facilitate interconnectivity among villages as well as with urban counterparts. This would foster business and trade among villages and cities and thereby enhancing the standards of living of the people.


Under MGNRRGS, government has proposed to take up 5 lakh farm ponds and dug wells in the rain-fed areas and 10,00,000 composite pits for production of organic manure. In total, government has to set aside an amount of Rs. 38,500 crores for programs of rural development under MGNREGS. To ensure water conservation and natural resources management, Ciuster Facilitation Teams will be started under the MANREG which would works but also generate income through various works but also help in creating community assets.

Sanitation and Electricity Connectivity

To improve sanitation and cleanliness especially in rural India, government has made provision of Rs. 9, 000 crores of ‘Swachh Bharat Abhiyan’, as a part of social infrastructure development.

Electricity connectivity in the villages is essential for the improvement in quality of life. So to achieve the same, the government planned to spend Rs. 8,500 cores under ‘Deen Dayal Upadhaya Gram Jyoti Yojana’ to provide 100% electricity connections to the rural households in the next three years.

Digital Bharat

To spread digital literacy among the rural masses, government has already approved two programs namely; ‘National Digital Literacy Mission’ and ‘Digital Saksharta’ and targets to cover six crore households to make them digitally literate in the rural India in the next three years.

Other Initiatives for Inclusiveness

Government has declared in this budget to provide ‘LPG connection to BPL Households’ only in the name of the women households of these poor families. This will not only economically support these people but also reduce the environmental pollution to its minimum. So, to achieve the same, Rs. 2, 000 crores is allocated for the initial cost of providing LPG connection this fiscal year. This will benefit more than one crore and fifty lakhs households those are below poverty line.

Government has started a ‘Stand up India Scheme’ to promote entrepreneurship among SC/ST and women. Rs. 5, 000 crores has been provided for this scheme which will benefit 2.5 lakh entrepreneurs, mostly from rural areas.

Concluding Remarks

The announcements of an increase in expenditure on agricultural and rural development in the budget signifies their sectoral importance in our economy. But agriculture sector is facing formidable challenges over year and a large number of farmers want to quit agriculture as their main occupation. Most of them do not have easy access to institutional finance/ credit and a large proportion is still dependent upon informal sector for finance. Besides, failure of crops either due to heavy rain or due to draught also adds to their misery. Hence, the government’s approach to support agricultural sector is just and necessary which is visible in the current budget. Further, targeting rural development in itself opens the road for inclusive development. Planning is not enough unless it is properly implemented within the given time and resource constraints. However, we are looking forward to positive outcome of the budget; through good governance, prudent expenditure management, close monitoring, clear cut accountability and timely execution with apt follow up of the various schems meant for agricultural and rural development in India.

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