Kurukshetra March 2018 Summary: Budget - (Part - 1)

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Citizen Centric Rural Growth - Higher Finance Commission grant and larger state share in PMGSY and PMAY (G) was available for programs of Department of Rural Development (DoRD) during 2017 - 18-almost 3 times the funds available in 2012 - 13.

Budget: Kurukshetra March 2018 Summary (in English)
  • DoRD-far reaching governance reforms to promote transparency using Socio-Economic Census-2011, IT/DBT payment system, transaction bases program MISs and space technology for geo-tagging, zero tolerance for corruption
  • PMGSY- to provide all weather road connectivity for habitations in rural and hilly areas-including state government՚s programs, 82 % of the total habitations will be connected-efforts to construct 51,000 km at a speed of 140 km per day in 2017 - 18 is being made (In 2016 - 17 it was 47,447 km@130 km per day)
  • Consolidation of rural road network by upgradation of existing selected rural roads based on their economic potential and their role in facilitating the growth of rural market centres and rural hubs. Annual funding of ₹ 19,000 needed from Central Government till 2022- “New India 2022” Dream would require connectivity and consolidation of roads.
  • To qualify for Phase-III of PMGSY-robust maintenance of built roads and GIS mapping of all roads is needed.
  • 15 % of PMGSY of roads use innovative green technologies like use of waste plastic, geo textiles, fly ash, iron and copper slag and cold mix. Aim is to reduce cost of construction & promote use of local and waste materials thereby reducing carbon footprint.
  • Deendayal Antyodaya Yojana- National Rural Livelihood Mission with more than 4.5 crore women into SHGs. Women SHGs in Northern, Eastern and North Eastern states. Diversify livelihoods like SHGs in Southern states & increase productive assets and income of poor households.
  • 32 lakh women farmers-sustainable agriculture - develop 1000 organic clusters-support for developing market infrastructure for women SHGs, Producer Groups and Producer Companies by Ministry of Agriculture through DAY-NRLM and MGNREGS. 14.2 lakh SHGs accessed to credit of ₹ 18,000 crore- sub components are implemented to provide livelihood to masses
  • MGNREGS: Livelihood resource and range of individual beneficiary schemes, social insurance at the time of need. Promote climate resilient agriculture through effective water conservation, afforestation and asset development.
  • MGNREGS resources in convergence with PMAY (G) -to provide 90 ⁄ 95 days of work and ₹ 12,000 through Swachcha Bharat Mission or MGNREGS. Target to complete 30 lakh homes by March 2018, under PMAY (G)
  • DoRD- eliminate rural poverty in new India of 2022 through concerted action for livelihood diversification and improved infrastructure. 5,000 clusters spread over 50,000 Gram Panchayats with partnership from State government. Address all dimension of poverty effectively & develop skill for wage employment under DDUGKY and self-employment through Rural Self-Employment Training Institute (RSETI) -over 7 lakh poor households every year-improve skill and develop capacity through Skill India Initiatives
  • Last budget- Mission Antyodaya-1 crore households in 50,000 Gram Panchayats out of poverty-DoRD did ranking of Gram Panchayats, selected by State Governments-government committed to bridge gap in fields like infrastructure, human development and economic parameters. Timely and transparent social support for old widows and differently abled persons. Skill and livelihood opportunities for young widows and differently able persons to develop 300 Rurban clusters and nearly 1200 Saansad Adarsh Gram Panchayats.
  • Mahila Kisan Sashaktikaran Pariyojna (MKSP) - work going on with 32 lakh women SHG Members for sustainable agriculture through convergence focused on water conservation, solid and liquid waste management linked to manufacture of organic compost, skill development, banking linkage, livelihood infrastructure facilities etc.
  • Robust Accountability Framework: Efforts being made by DoRD to develop citizen centric apps like Gram Samvad, Meri Sadak, Awaas App etc. to improve accountability to the people. National Level Monitoring Institutions visit 600 districts, two times a year for sample verification of the work by checking randomly.

Research and Evaluation studies taken up on all flagship programs for example:

  1. National Evaluation of DAY-NRLM by IRMA (completed)
  2. MGNREGS Natural Resource Management initiatives by Institute of Economic Growth, Delhi (completed)
  3. PMGSY by IIM Ahmedabad (completed)
  4. PMAY (G) by NIPFP (first part completed)
  5. MGNREGS by National Institute of Rural Development and Panchyati Raj
  • Advisory Group of Internal Audit suggests system for continuous development. Prepare a framework for a certificate program for internal auditors. National Institute of Rural Development and Panchayati Raj in partnership with Institute of Internal Auditors of India to roll out the certificate program for retired and serving Accounts Officers and Other Government Servants.
  • Auditing standards for social audit have been notified for the first time. Appropriate certificate program have been developed by NIRD&PR in partnership with Tata Institute of Social Sciences, Mumbai for District, Block and Village resource program.
  • Women SHG members as Social Auditors after formal certificate program-a community CDRE OF 50,000 Social Auditors from women SHGS in 2018 - 19.
  • In April 2017, DAY-NRLM (Deendayal Antyodaya Yojana - National Rural Livelihoods Mission) launched a transaction based MIS to capture SHG member level transactions-rolled out in 1400 blocks across 25 states in public domain to enable project management as well as monitor the performance and financial position of SHGs and their federation in real time basis.
  • Advisory Group on IT to strengthen Cyber Security and undertake forensic Audit of field units to ensure compliance of law, security and to maintain transparency in all IT based payment system
  • Common Review Mission: To assess progress of programs in states, 8 states visited by 32 independent professionals every year, team visits 2 districts in each state and gives feedback to the ministry. 3 CRMs have been undertaken to provide a road map for further improving the Accountability framework of Rural development programs
  • DoRD setup a small Internal Audit Wing for timely field verification of financial system and provide insight of financial management.
  • GRIP (Government Receipt Portal System) : Portal for online processing and analysis of internal audit developed & is used in internal audit of MGNREGA and PMAY
  • Reforms to simplify Record Registers, Community Information boards, use of logo with financial details etc. is being pursued to strengthen accountability
  • DISHA (District Development Coordination and Monitoring committee) constituted last year with representatives of State and Local Government. It meets every quarter to review progress of schemes. Disha portal also developed & progress can be seen Gram Panchayat wise, 9 programs are already on the board of Disha Portal, efforts are on to bring all 40 flagship programs on board.

Steps for Doubling Farmer՚s Income

  • A need to address the supply chain bottlenecks in agriculture sector which results in widening of demand supply gap and pressure on inflation.
  • Irrigation sector:
  • Pradhan Mantri Krishi Sinchai Yojana (PMKSY) objectives of
  1. Har Khet Ko Pani
  2. Per Drop More crop
  • PMKSY has 4 components
  1. Accelerated Irrigation Benefits Program & Command Area Development (AIBP-CAD)
  2. Minor Irrigation (Har Khet Ko Pani)
  3. Watershed Development
  4. Micro Irrigation (Per Drop More crop)
  • To execute AIBP-CAD, ₹ 60,000 crore through NABARD funding along with open market financing-expected to increase the yield of crop & income of farmers, replenishment of ground water and increased water availability for other uses.
  • PMKSY: watershed development- ₹ 2146 crore-1.86 lakh ha additional area to be brought under irrigation & will lead to higher yield and enhance famer՚s income.
  • Government allocated 26000 crore for 96 most water deprived districts, where only 30 % of land holdings are covered under irrigation, average rainfall is 750mm or more, less than 60 % of annual replenishable ground water resources, to construct 9.49 ground water abstraction structures through tube wells, dug wells, bore wells, and dug cum bore wells. Project envisages convergence of PMKSY-Watershed component and MGNREGA to support water harvesting and ground water recharge
  • Water Use Efficiency (WUE) in Indian agriculture is 30 - 40 % , one of the lowest in world against 55 % in China
  • PMKSY- Per Drop More Crop is one step towards improving
  • WUE-uses innovative water saving technologies in irrigation called micro irrigation.
  • Micro irrigation saves 40 - 70 % of water, reduces use of fertilizers by 15 - 50 % , conserves energy by 10 - 17 % , decreases labour cost by 30 - 40 % (as given by Ministry of Agri & FW, 2004 and FICCI 2016) -If applied to its full potential, average increase in farmer՚s income at all India will be 42 % . Uttarakhand has minimum increase (20 %) while Gujarat (68 %) has highest increase.
  • The cost of adoption of technology is high compared to other irrigation technologies but the benefits accrued by the farmers outweigh the installing cost
  • Increase in Minimum Support Price has immediate effects on farmer՚s income, agricultural productivity and growth. Cost of a crop includes
  1. Production of crop like seed, fertilizer etc.
  2. Manure
  3. Chemicals
  4. Hired human, bullock and machinery
  5. Labor, irrigation expenses
  6. Maintenance cost
  • Operation Greens for onion, tomato and potato crop in line with Operation flood-the three are seasonal and regional, but perishable commodity pose a challenge in connecting farmers and consumers.
  • FPOs (Farmers Producer Organizations) enable farmers to enhance productivity through efficient, cost effective and sustainable resource use and realize high returns for their produce through collective action supported by the government and fruitful collaboration with academia, research agencies, civil society and private sector. They remove hurdles enabling farmers to access markets both as buyers and sellers & are important drivers for socio economic growth in rural areas. 100 % tax deduction for FPOs with annual turnover ₹ 100 crore will boost ‘Operation greens and SAMPADA’ Yojana. Organic farming also promoted using cluster model by encouraging women SHGs and Village Produce Organizations- to help boost exports
  • National Bamboo Mission: Bamboo tree recognized as Green Gold. Government launched a “Restructured National Bamboo Mission” - a mission for Integrated Development of Horticulture, a 100 % Centrally sponsored scheme of Department of Agriculture & Cooperation (DAC) . ₹ 1290 crore to promote holistic growth of bamboo sector through varietal change and improved agriculture, marketing of bamboo and bamboo based handicrafts, promote research and develop aa blend of traditional wisdom and modern scientific knowledge, create employment opportunities for skilled and unskilled persons.
  • Agricultural Exports: India is 4th largest agri-export country-exports mainly tea, coffee, rice, cereals, tobacco, spices, cashew, oil meals, fruits, vegetables and marine products.
  • To harness optimum potential, Union Budget 2018 - 19 proposed state-of-the-art facility in 42 mega food parks to facilitate agriculture produce to meet global standards. Identify and create new markets.
  • Agriculture Marketing: To strengthening and upgrading of agricultural marketing networks, Agri-Market Infrastructure Fund with a corpus of ₹ 2000 crore to develop and upgrade existing 22,000 rural haats into Gramin Agriculture Market (GrAMs) and 585 APMCs using MGNREGA and other schemes.

Food Processing:

  1. Food processing plays a vital role in minimizing wastage at all stages of food processing chain
  2. Enhance shelf life
  3. Ensure value addition to agriculture produce
  4. Diversification and commercialization of agriculture
  5. Generate employment
  6. Enhance farmer՚s income and create surplus for export of Agro and processed foods

Food processing industry requires

  1. R & D in food processing for product and process development and improved packaging
  2. Policy support
  3. Support for creation of infrastructure
  4. Capacity expansion/Upgradation and other supportive measure for growth of the industry

Focus on infrastructure and testing facilities to reduce wastage, increase value addition, and address food safety aspect. Special agro zone would help in designing suitable financial instruments to increase credit flow.

Agriculture Credit - Adds to the productivity by supporting mechanization and contributes to the growth of agriculture

Direct agriculture credit amount has a positive and significant impact on agriculture output- benefits are

  • Improve livelihood of farmers
  • Reduce dependency on the informal lending sector
  • Allow investment in better inputs
  • Help farmer to deploy technology at field level

Aquaculture and Animal Husbandry: Set up Fisheries and Aquaculture Infrastructure fund and Animal Husbandry Infrastructure Fund with a combined corpus of ₹ 10000 crores.

Kisan Credit Card benefits to fisheries & farmers.

Government has provided ₹ 200 crore to encourage organized cultivation of highly specialized medicinal and aromatic plants and associated industry.

Provision for subsidized machinery for management of crop residue for Haryana, Punjab and UP farmers.

Blue Print for Rural Revitalization

Real Agricultural GDP remained constant for the last 4 years.

Experts suggest

  • Systematic procurement method
  • Raising farm credit targets and expanding the network
  • e-NAM

Ashok Gulati, Economist explains if farmer՚s demands are to be fully met, MSP of paddy and Soya to be increased by 44 % , maize by 47 % , groundnut by 38 % and long staple cotton by 52 % . Time to fructify as inter-play of vested interests have to be eliminated.

PMKSY aimed to provide irrigation to 96 irrigation deprived districts

₹ 1000 crore allocated to extend irrigation and strengthen irrigation facilities and improve ground water management in rural areas.

The government՚s commitment to farmer welfare is evident by institutionalizing mechanisms such as

  1. Gramin agricultural markets
  2. Increase in MSP
  3. Promoting cluster based agriculture
  4. Developing last mile infrastructure
  5. Realize the untapped export potential
  • Kisan Credit cards to dairy farmers and fisheries will ″ facilitate cash flow and improve creditabilitythus improving business growth ″ .
  • Rural Infrastructure development - ₹ 14.34 lakh crores have been earmarked - aimed at creating employment of 321 crore person days, 3.17 lakh kilometers of rural roads, 51 lakh new houses, 1.88 crore toilets, 1.75 crore households with electric connectivity besides boosting agricultural growth.
  • Setup 24 new government medical colleges and hospitals to meet the target of one medical college for three parliamentary constituencies.
  • Biggest health care program, National Health Protection Scheme: ₹ 5 lakh to 10 crore poor families
  • Implementation requires enhanced resources that have not been allocated. India՚s allocation for health as percentage of GDP is much lower compared to other emerging economies like Brazil, china, South Africa etc.
  • Refreshed version of Kususm (Kisan Urja Suraksha Utthaan Maha Abhiyan) will aid solar power generation capacity of 28,250 MW over next ten years
  • The government has rolled out ₹ 1.4 lakh crore road map to turn farmers into generators of solar power, which they can use to run their solar pumps sets and sell the surplus to discoms.
  • Phase-1 of Bharat Mala Program for roads and schemes in Railways may provide momentum for jobs, potential in rural infrastructure development and labor intensive small and micro sectors.
  • Eklavya Vidyalayas to be setup in every block which has 50 % ST population and atleast 20,000 tribals online with Navodaya Vidyalayas. Establish Central Universities in specialized areas such as agriculture, dairy etc. Central Government to assist State Government to set up model schools by giving 50 % grant.
  • Subsidy on food, fertilizer, and kitchen fuel has been increased by 15 % . 80 crore people are provided food grains at highly Subsidised rate under Food Security Act.

Skill Development and Employment for Rural Youth

  • United Nation defines youth as person in the age group of 15 - 24 years, India՚s National Youth Policy 2014 defines youth as those falling between 15 - 19 constitute 27.5 % of population. Different organizations define youth in different age groups mainly falling under 14 - 29 years.
  • Only 10 % percent of age group 15 - 17 enter the labour market, At age of 18 - 29,47.3 % (67.5 % male) enter the labour force, of which 42.4 % form the work force. Unemployment rate declines steadily as the age progresses. In 2015 - 16 survey, unemployment increased to double digit as compared to 2013 - 14
  • The percent of youth holding an educational qualification of secondary/higher secondary/certificate course but not in the labor force is 60 % which is a cause of concern. This questions the quality of education being imparted.
  • 60 % of youth in rural areas and 70 % youth in urban areas remained outside the labor force, the percent of youth outside labor force in different age groups is different
  • According to ASER 2017, study conducted on 14 - 18 years old-42 % were working irrespective of being in formal education or not; 79 % percent working in their parent՚s farm; 3 ⁄ 4th of youth surveyed were involved in daily household chores (77 % male and 89 % female) . Youth who have completed 8 years of schooling, a significant portion of them lacked foundational skills in reading and doing maths.

Current Initiatives in Skilling Rural Youth

  • Huge workforce in unskilled/semiskilled and to absorb them in to decent jobs-Pradhan Mantri Kaushal Vikas Yojana-task to impart short term certificate courses as well as Recognition of Prior Learning for those who are already employed. Out of 11.8 lakh trained candidates, 7.9 lakh candidates got certified and 2.8 lakh received placement.
  • Under Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) - placement skilled training program for rural poor youth-1.03 lakh were trained in 398 trades-64,967 were given placement.
  • Training in Self Employment Training Institutes (RSETIs) in more than 56 vocations spread across areas like agriculture, food processing, product manufacture etc. -7897 candidates are being trained under project LIFE-MGNREGA to improve skill status of MGNREGA workers.
  • Mahila Kisan Sashaktikaran Pariyojana-33 lakh Mahila Kisans in 17 states to be provided with agriculture based livelihoods.
  • Aajeevika Grameen Express Yojana provides alternate source of livelihood to the members of SHGs- by facilitating them to operate public transport services in backward areas.
  • Start-Up Village Entrepreneurship Program (SVEP) is being implemented under DAY-NRLM. 7,800 enterprises promoted across 17 states and expected to cover 25000 entrepreneurs in 2018 - 19.
  • Stand-Up India scheme to promote entrepreneurship among women and SC/STs-bank loans between ₹ 10 lakh to 1 crore for one SC/ST borrower and to atleast one women borrower per bank branch to set up Green field enterprise-started in 2016 for nurturing innovations and entrepreneurship thereby generating employment opportunities-as of Jan 2018,74 startups have been approved for availing tax benefits-Startups in the field of IT services, health care and life sciences, education, professional and commercial services and food & beverages.

Union Budget Announcements 2018 - 19

Among many announcements made in the budget, most of them are discussed already. The others include

  • Target date for completion of phase-III of PM Gram Sadak Yojana has been brought forward from 2022 to 2019
  • Under the Mega Food Park Scheme, 12 parks are proposed during the year which aim to provide employment to 95000 persons (both direct and indirect included)
  • Realizing the importance of National Rural Livelihood Mission, the allocation has been increased to ₹ 5750 crores
  • Government has increased its allocation for improving the social metrics of 115 backward districts
  • Fixed term employment in all sectors
  • Pradhan Mantri Kaushal Kendras for skill enhancement in every district
Budget: Kurukshetra March 2018 Summary (in Hindi)

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