Kurukshetra March 2018 Summary: Budget - (Part - 3)

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Gender Budget Allocation for financial year 2018 - 19 is ₹ 121,961 crores. Increased allocation of budget for women will help in addressing the socio-economic and health needs for women. Expansion of budget allocation will empower women in all dimensions.

Budget: Kurukshetra March 2018 Summary (in English)
  • Social security scheme MGNREGA that was primarily for women did not get any significant increase.

Initiatives for Farmer Welfare

Agriculture is poised to grow at a rate of 2.1 % .

Government has reiterated its goal of doubling famer՚s income by allocating substantial funds in sectors like

  • Agricultural infrastructure
  • Food processing parks
  • Access of markets to smaller farms
  • Arresting price volatility in the country

Agriculture Priority in Various Budgets

  • In 2014 - 15- facilitating agri-tech infrastructure by setting up of open Agriculture Universities in Andhra Pradesh and Rajasthan and setting up of Horticulture Universities in Telangana and Haryana.
  • Setting up of soil testing laboratories along with soil health cards for every farmer
  • 2015 - 16: Focus on micro-irrigation and water shed development facilities. With a budget of ₹ 25,000 crore
  • 2016 - 17: Major thrust on irrigation facilities
  • 2017 - 18: Rural, agriculture and allied sectors experienced a 24 % increase. Priority was insurance against crop loss and effective management of water resource for agriculture and expansion of e-NAM
  • The agricultural sector has been given an increase of 12.8 % in expenditure.
  • The rural Haats initiated mainly aims to protect the interest of 86 % of small and marginal farmers, as it is difficult for such farmers to scale output and make it accessible to super markets. The rural Haat would be a platform to connect marginalized farmers with standard commercial market especially where infrastructure bottlenecks, inadequate technology and information barriers hinder the market potential.
  • There are other schemes like “operation Greens” , FPOS, GrAMS, which help increase the income of farmers
  • The development of rural Haats may create further space for improvement in ensuring quality food to the needy people and lesser intermediary rent burden on Government.
  • The collection of rice and wheat into Godowns and then distribution incurs huge transportation cost and economic rents to different intermediaries, which has 2-way implication. Additional subsidy on the government and food quality compromise amid poor infrastructural base limits (rice and wheat to be protected from rain and other natural calamities)

The sustainability of agriculture sector rests on technological development in fields of

  • Seeds
  • Fertilizers
  • Soil testing
  • Package practices
  • Institutional credit to finance the crop sown
  • Irrigation facilities
  • Risk coverage against natural calamities
  • Access to agriculture market

Recent budget bridged the gap to equip agriculture sector with necessary facilities mainly strengthening agricultural market.

Boost to Agriculture Industry in the Budget

  • Developed countries have carried out parallel reforms in agriculture as well as industrial sector; same has been missing in developing countries. India has maintained high economic growth much driven by services, the developments give motivation to develop healthy markets to ensure remunerative price for the produce.
  • World Bank estimated India is experiencing urbanization with much faster rate as half of the population would be residing in urban areas by 2050. The agriculture workforce to drop to 25.5 % .
  • The move towards agro processing industries in recent budget has much potential to absorb the manpower into agricultural industry.
  • Improvement in market access amidst the marginalization of farming helps in improvement in income and food security
  • Countries have practiced collective action approach to strengthen the agricultural market and improve the rural incomes. This approach mainly focuses on various aspects such as training methods, negotiation skills, grading and sorting and group dynamics. Bulk marketing of products help in reduction of transaction charges and enhances economies of scale.
  • Indian agriculture market noticed information asymmetry, which is in contrast to perfectly competitive markets. Farmers sell their output at farm-gate prices to the local traders. Small farmers find it difficult to enter into supermarkets of large scale and much standardized products. Smaller farmers sell their produce without bargaining because of lack of access to competitive prices.
  • APMCs leading to oligopolistic market power are yet to make farmers to reap benefits amid growing income through services driven economy. Farmers get one-fourth price of what the final consumers are paying.
  • Specialized Agro Processing Financial Institutions will remove the financial hurdles for establishing food-processing industries. It would help in terms of timely and affordable credit access to the food processing projects, which require intense capital and a long gestation period, improved share of food processing in national output as well as in total exports. Food processing industry would pave way for
  1. Product standardization
  2. Better access of external market
  3. Appropriate demand projections for agricultural produce
  4. Employment creation
  5. Waste reduction
  • The present approach of budget is agro-enterprise approach-from production based approach to market oriented approach. Comfortable access of markets pave the way for demand driven system instead supply based system.
  • In near future agricultural product will undergo standardization as well as competitive price mechanism even for smaller farmers and the farmers to have more bargaining powers.
  • India is also considering to make agriculture products more market oriented through setting up of Farmer Producers Organization (FPOs) , agri-logistics, processing facilities and professional management like “Operation Greens”
  • Implementation of rural haats to ensure a competitive market to the farmers.
  • The proposal to increase agricultural credit by 10 lakh to ₹ 11 lakh crore and host of other policies would revive demand and create opportunities for MSME sector, crucial for jobs and growth

Rural Livelihood and Employment

  • Allocation trend for Rural Livelihood & Infrastructure: The increase in resource allocation within agriculture and rural development aimed at stimulating economic growth with job creation, income and wealth generation and enhancement of overall consumption demand in rural India
  • Allocation for social welfare activities have witnessed an increase of 14.5 % over revises estimates by Agriculture and Allied activities.
  • Priority has been accorded to Animal Husbandry, Dairying and Fisheries, followed by Agriculture Research and Education, Skill Development and Entrepreneurship, Women and Child Development, Rural Development and Micro, small and Medium Enterprise (MSME) .
  • Development of Agriculture Cooperation and Farmers Welfare witnessed a reduction of 11.3 % resource allocation in 18 - 19.
  • Allocation of more funds to various important rural sectors during financial year 2017 - 18 has caused a large positive difference between Budget estimate and Revised estimate of 2017 - 18.

Agriculture & Farmer՚s Welfare

A number of measures have been suggested to increase production, productivity, farm profits and income of farmers as

  • Increase in MSP
  • Connecting more mandis to e-NAM scheme
  • Developing rural haats into GrAMS
  • Linking rural markets through PMGSY roads
  • Developing cluster based agri-products
  • Promoting organic farming
  • Launch “Operation Greens”
  • Extend Kisan Credit Card to fishery and Animal husbandry
  • Set up dedicated funds for fisheries and aquaculture
  • Enhance credit target to ₹ 11 lakh

Pradhan Mantri Krishi Sinchayee Yojna (PMKSY) launched during 2015 - 16 is an integrated irrigation initiative covering components like

  • Accelerated Irrigation Benefits Program (AIBP)
  • Command Area Development and Water Management (CADWM)
  • Har Khet ko Pani (HKKP)
  • Per Drop More Crop (PDMC)
  • Watershed Development Component

PMKSY need to be implemented on a mission mode and in a time-bound manner.

Rural Employment

MGNREGA and National Rural Livelihood Mission (NRLM) - two wage and self-employment programs towards building quality and productive community assets and enterprise, witnessed 14.6 % and 29.1 % jump

MGNREGA has large financial absorption capability, but not been able to generate quality asset for community due to

  • Less focus on quality asset creation
  • Faulty work plan and design
  • Improper selection of projects and work sites
  • Lack of survey works
  • Inaccurate work design estimates
  • Inefficient work execution
  • Inadequate technical supervision

The need of the hour is to raise a cadre of quality experts who could be a part of the community level outcome based public works planning and monitoring under MGNREGA

NRLM has two important self-employment schemes like Deen Dayal Upadhyaay Grameen Kaushal Yojana (DDU-GKY) and Deen Dayal Antyodaya Yojna-National Rural Livelihood Mission (DAY-NRLM) . The budget estimate has been kept to ₹ 5,750 crore for mobilizing 70 lakh household into SHGs

DAY-NRLM is aimed at creating a catalytic local entrepreneurial ecosystem and encouraging the rural unemployed youth to take up local enterprise on their own.

Rural Enterprises being set up under DAY-NRLM would be real growth engines in 5.5 lakh villages and also would help in

  • Ensuring financial inclusion of SHGs
  • Increasing house-hold income over baseline
  • Assuring training, placements to millions of rural youth.

The major focus of the Budget was to reorient agriculture and rural sectors.

The budget has intended to re-orient MSP policy intervention with a view to assure incremental income to the farmers.

Agriculture and rural development have tremendous potential to achieve Government՚s objective of doubling farmer՚s income by 2022.

Rural Infrastructure

  • Agriculture is the principal livelihood of rural areas and forms the backbone of Indian economy. Rural economy constitutes 46 % of national income and 70 % of workforce residing in rural areas.
  • The potential of rural and agricultural sectors cannot be harnessed without proper access to rural infrastructure like rural roads, markets, electricity, water, irrigation facilities etc.
  • Poor rural infrastructure limits the ability of traders to travel and to communicate with remote farming areas, limiting market access from these areas and eliminating competition for their produce.
  • Infrastructure facilities such as roads, tracks, bridges, irrigation network, water supplies, schools, health centres, markets and electricity are required in rural areas for the local population to fulfill their Basic needs and live a social and economically productive life.
  • Migration of rural people to urban areas is for accessing better infrastructure facilities and for better standards of living.
  • Providing these facilities in rural areas would require massive investments.
  • Impetus to Rural Economy: Budget focuses on healthcare to economically less privileged, taking care of senior citizens, infrastructure creation and working with states to provide more resources for improving quality of education.
  • Maximum livelihood opportunities in rural areas can be obtained by spending more on livelihood, agriculture and allied activities and construction of rural infrastructure. The budget has proposed to spend 14.34 lakh crore including extra budgetary and non-budgetary resources for creation of livelihood and infrastructure in rural India.

Provision towards Rural Livelihoods & Infrastructure:

  • The budget allocation of Ministry of Rural Development saw 7 % increase over last year՚s budget (2017 - 18) .
  • National livelihood Mission and MGNREGA have reported 28 % and 15 % increase over last year՚s budget. The budget has strong intention for generating productive and gainful on farm and non-farm employment of landless families. Increase in loans for SHG of women of about 37 % over last year.
  • Rural Housing: By assessing the rural housing needs of rural areas, the budget provides a construction of 49 lakh houses in year 2018 - 19 amounting to more than 1 crore houses under PMAY (G) . This move to further boost the construction sector and economic activities in rural areas. ₹ 33,000 (including ₹ 12,000 crore for extra budgetary resource) is kept in Budget 2018 - 19 under PMAY
  • Rural roads - India has developed a large network of roads under Pradhan Mantri Gram Sadak Yojana (PMGSY) in last few decades. This year 57,000 km and 28.35 crore man days to be provided by PMGSY.
  • Ambitious Bharatmala Pariyojna to provide seamless connectivity of interior and backward areas and border areas with an estimated cost of ₹ 5,35, 000 crores. And 35, ooo km in phase 1. This would improve economic activity in remote border areas and further help in accessing other infrastructural facilities

Rural Electricity:

₹ 18800 crore including extra budgetary resources has been proposed under Deen Dayal Upadhyaya Gram Jyoti Yojna (DDUGJY) to provide

  1. Intensive electrification of villages-1 lakh
  2. Feeder segregation including 11 kv lines- 1 lakh circuit km
  3. Commission of Substations- 600
  4. Distribution of free LPGs and many more
  • Connection of electricity facilities will encourage small enterprises and improve agricultural productivity due to continuous water supply and further provide rural people with improved communication facilities.
  • Rural Drinking Water and Cleanliness: Swachh Bharat Mission (SBM) has definitely benefitted the poor. This initiative is supposed to improve the health conditions of rural population and protect the beauty and ethnicity of the rural areas.
  • Budget provides for infrastructure creation through Piped Water Supply Scheme and community Water Purification Plants - 84000 habitats under National Rural Drinking Water Scheme.
  • Rural Broadband: Under Bharat Net Project - one lakh Gram Panchayats to be connected through high speed optical fibre network which would provide broadband access to 20 crore rural Indians benefiting 2,50, 000 villages.
  • ₹ 10,000 provision has been made for creation and augmentation of Telecom Infrastructure.
  • Provisions for Infrastructure for Farmers
  • The present budget has provided for expansion of network of rural roads and agricultural markets on a large scale along with concrete steps to help farmers get better prices with focused strategy on imports and exports as well as participation in future market.
  • Other proposals include upgrading of existing rural haats to GrAMs, these GrAMs to be electronically linked to e-NAM, Organic farming by Famer Producer Organization (FPO) and Village Producer Organization (VPO) in large clusters and so on.
  • 45 % increase in budget of crop insurance schemes for farmers.
  • Allocation of Ministry of Food Processing has been doubled from ₹ 715 crore to ₹ 1400 crore in 2018 - 19.
  • The centre to work with state governments for facilitating farmers to install solar water pumps to irrigate fields.
  • Rural Care through Education, Health and Social Protection: Ekalavya Model Residential school, RISE initiative, and National Health Protection Scheme are few schemes for rural education health and social protection.
  • ₹ 600 crore allocated in the budget to provide nutritional support to TB patients
  • Government on course to achieve targets under Rural Housing Program- PM Awaas Yojna- Gramin (PMAY-G)
  • The target of completing 10 lakh houses by November 2017 has been achieved. It is expected that 15 lakh houses by 31 December 2017,25 lakh houses by 31 January 2018,35 lakh houses by 28thFebruary, and 51 lakh houses by 31st March 2018.
  • 56.9 lakh beneficiaries have been sanctioned houses, 51.39 lakh beneficiaries have received 1stinstalments, 31.03 lakh beneficiaries have nearly reached roof cast level and 16.06 lakh beneficiaries the house construction is nearing completion.
  • States like Chhattisgarh, Jharkhand, Madhya Pradesh, Maharashtra, Odisha, Rajasthan, Uttar Pradesh, and West Bengal have highest number of PMAY-G beneficiaries are on course for completion of PMAY-G houses within the prescribed time-frame.
  • The faster completion of quality houses has been assisted by payment assistance directly into beneficiary account through IT-DBT platform.
  • Rural Mason trainings have been organized to facilitate trained masons.
  • Space technology and IT platforms are being used to monitor complete cycle of house construction; each stage is being geo-tagged. States have taken adequate measures for continuous availability of materials at reasonable price so that pace and quality of work is not effected.

Rural Electrification

Power is crucial for economic growth and welfare of nations. Sources of power generation range are from conventional sources as well as non-conventional sources. The sources of power generation include

  • Coal
  • Lignite
  • Natural Gas
  • Oil
  • Hydro
  • Nuclear Power
  • Wind
  • Solar
  • And Agricultural and Domestic Waste

India has moved 73 spots to rank 26th in World Bank՚s list of electricity accessibility in 2017.

Budget allocation has been increasing over the years in Power Sector. Several measures have been announced to boost power sector and make electricity accessible to more households. The budget has tried to revive the demand by allocating higher amount for Saubhagya Scheme. The budget allocation for the schemes is given as

  • Deen Dayal Upadhayaya Gram Jyoti Yojana (DDUGJY) - ₹ 3,800 crore, to be completedby May 2018
  • Integrated Power Development Scheme (IPDS) - ₹ 4,900 crores
  • Sahaj Bijli Har Ghar Yojna (Saubhagya) - ₹ 16,000 crore: to enable last mile connectivity for rural households, to be completed by March 2019.

Saubhagya target 4 crore electricity connections and 8 crore gas LPG connection under Ujjwala are going to transform the socio-economic landscape of India.

Cut in excise duty sends a clear picture that the government wants the consumers not to pay beyond retail prices

PM Sahaj Bijli Har Ghar Yojna (Saubhagya) to provide architecture through which it will seek to reduce import of fossil fuels, boost underutilized power plants and meet its climate change commitments. Efforts will be stepped up to provide better infrastructure, create a service line and other requirements. This scheme would be a win-win for all including banks as it will help reduce NPAs due to better utilisation off installed capacity, higher household income of connected household be a social good.

The electricity connection to include

  • Release of electricity connections
  • Drawing a service cable from the nearest pole to the household premises (if pole is not available then erection of pole along with conductor and associated accessories)
  • Installation of energy meter
  • Wiring of single line point with LED bulb
  • Mobile charging point

115 aspirational districts are identified by the government to give focused attention in areas like improving the quality of life by investing in social services like

  1. Health
  2. Education
  3. Nutrition
  4. Skill upgradation
  5. Financial Inclusion
  6. Infrastructure like irrigation, rural electrification, potable drinking water and access to toilets
  • 115 districts to become model of development
  • Many farmers are installing solar water pumps to irrigate their fields. Generation of solar electricity is harvesting of Sun by farmers using their lands. The surplus flower generated by farmers can be purchased by distribution of companies or licensees at reasonably remunerative rates. This is an important move to cut down dependency on diesel pumps and farmers would shift to solar powers.
  • The government is working on a plan targeted at farmers to generate 20 gigawatts (GW) of solar power, involves setting up of small solar projects of 1 - 2 megawatt (MW) on fallow land and solarizing water pumps. India has a plan to place 175GW of clean energy by 2022, of which 100 GW from solar projects.
  • The Integrated Power Development Scheme (IPDS) approved on 20th November 2014, envisages strengthening of sub-transmission and distribution network including metering all levels in Urban areas. The earlier scheme Restructured Accelerated Power Development and Reforms Program (r-APDRP) has been subsumed in to IPDS.
  • In year 2018 - 19, for creation of livelihood and infrastructure in rural areas, total amount to be spent by Ministries will be 14.34 lakh crore (including extra-budgetary and non-budgetary resources of ₹ 11.98 lakh crore)
  • Apart from employment due to farming activities and self-employment, this expenditure will create employment, create rural roads, new rural houses, toilets and new household electric connections.
  • Schemes like Saubhagya and DUGJY to provide a boost in energy demand to some extent, apart from improving the quality of life for rural households.
  • The Union Budget also increased the capital expenditure by Indian Railways particularly for electrification and augmentation of the line network-a move that will create additional power demand.
  • Sustained economic growth continues to drive electricity demand in India. India՚s focus on attaining “Power for all” has accelerated capacity addition in the country. Competitive intensity is increasing at both the market and supply sides. This would be a positive impact on power sector with the thrust towards expanding electricity access through flagship schemes.
  • Ministry of Power with Department of Posts surveys electrification in 5 states
  • Out of 18.1 crore rural households, 14.16 crore (78.24 5) households have been electrified. The status of the electrified rural houses in Sates is updated by respective state DISCOMS on Saubhagya web-portal. Saubhagya outlay of ₹ 16,320 crores including Gross Budgetary Support
  • Ministry of Power has taken help of Department of Posts for survey of un-electrified households in 5 states like Assam, Chhattisgarh, Jharkhand, Madhya Pradesh and Odisha.
  • Government of Madhya Pradesh and Chattisgarh have submitted 151 DPRs (77 rural grid, 27 rural off grid and 47 urban) on online portal. Sanctions under Saubhagya are made against techno-economic appraisals and approvals of DRPs received and disbursals made in phased manner against completion of various activities and achievement of milestones as per scheme guidelines

Making Digital Rural India

The task of connecting one lakh Gram Panchayat through high speed optical fibre has been completed under phase-1 of BharatNet Project. This project has enabled broadband access to over 20 crore rural Indians in about 2,50, 000 villages with 100 mbps speed.

High speed internet can solve many problems in rural India. Some of them include

Improve quality of education: People would get best quality study material, could learn from best possible teacher. Students can access several online learning applications that make learning easy and interesting.

One in every 10 and every four rural Indians aged 14 - 18 years could not read a class I and class II textbook (book meant for children aged 5 - 7 years) says Annual Survey of Education Report released on 16 Jan 2018.

Rural Health care: With lack of infrastructure and shortage of doctors, access to internet would be a blessing. Through e-health, they would be able to consult the best possible doctor through video conferencing.

Villages in many parts of the country had high infant mortality rate due to lack of hygiene related information.

Many digital projects have been highly effective because of use of smartphones and health workers were able to guide the villagers to guard against such menace.

  1. Weather forecast: Farmers would be able to know weather forecast and would be able to sow crops accordingly. This would reduce in deaths of farmers.
  2. Farmers could also get best possible price for their crop as farmers would be able to sell their produce at the actual rate prevailing in the market.
  3. Farmers would be able to talk to irrigation experts who could guide them about which crop is suitable for a particular season.

47 % of workforce in India are engaged in agriculture. there is a need to address issues related to farmers and internet would be a catalyst for change in this sector.

Taking Blockchain to Next Level

  • Blockchain is a file system that creates a block of transactions called the distributed ledger in a multi-party system, where all parties have access to the ledger and know the nature of transactions in their chain.
  • The use of this technology is already been considered in banking and insurance sectors.
  • Rural sector has a huge scope of transformation through blockchain
  • Blockchain technology can create permanent public ledgers for all kinds of property/land related transactions, making database transparent and avoiding chances of duplicate records
  • When land related transactions are on blockchain, all parties involved -buyer, seller, broker, banks and the government can track the deal on real time basis.
  • As part of Digital India initiative government will be focusing on development of stable and secure infrastructure, digital literacy and delivering government services through digital mediums. Proliferation of low cost smart phones with inter connectivity in rural India would be a game changer for the economy.
Budget: Kurukshetra March 2018 Summary (in Hindi)

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