A Budget for Rural India This budget is not about financial markets, not about reforms, not about kick- starting the economy and is also not about banking reforms and what have you. This is a solid budget for Rural India and if the rural economy is safe, India’s economic growth is not in doubt. This budget is aimed largely at Rural India and we need to look at it from a rural perspective and it begins to make sound economic sense. There are a whole lot of goodies for the rural sector. i. Kisan Vikas Patras is being revived and the only request is that these saving should be used exclusively to build up rural infrastructure possibly through the RIDF being managed by NABARD for which Rs. 25,000 crore has been separated allocated. If it helps to launder black money, let there be a 7-year lock-in period and moderate interest rates so as to boost rural infrastructure including private rural markets. ii. Skill India concentrates on training rural and urban youth in traditional skills which help the rurban housing industry and should be able to give a boost to the skills needed for the entire housing sector and a boost to rural employment. iii. The Pradhan Mantri Kisan Vikas Yojana (Rs. 1000 Crore) is expected to help irrigate rain-fed areas and in view of the possibilities of a drought/rain- deficient year, is a timely tool for enhancing rain- water harvesting systems as was done in Gujarat. This amount should be boosted with shram-dan or area-specific donations. iv. Swatantra Bharat Abhiyan provides for ensuring total sanitation for all by 2019 and is meant for the rural areas and will help definitely reduce diseases and contamination of water sources in rural areas. Sewage or rural water treatment plants are also needed along with toilets for all homes. v. The Deendayal Upadhyay Gram Jyoti Yojana (Rs 500 Crore) needed to replicate the Gujarat model of rural electrification for all of rural India is a welcome scheme if linked to the solar lamps/electrification projects and the renewable energy schemes. I hope that II KVA feeder lines for agricultural pump sets or solar energy pumps can reduce the number of inefficient diesel pump sets in rural India which are a sheer waste of resources. vi. Pradhan Mantri Gram Sadak Yojana (Rs 14,389 crore) is being revived and is a major boost for rural development. A UNDP study in 2005 confirmed that just building rural roads is the best impetus for rural development, with market access, rural transportation and access to schools, hospitals in rural areas being made easier for the rural poor. vii. MGNREGA (Rs 34,000 crore) is an effective safety-net for the rural poor and is going to be effectively oriented for asset-creation (wells, watersheds, water-harvesting ponds, small rural warehouses) and will be linked for aiding agriculture and allied activities. This should give a great boost to the entire agriculture sector as 56% of farms are still rain-fed. viii. The Ajeevika (National Rural Livelihood Mission) is being extended to another 100 districts and will help women SHGs get loans at 4 per cent on prompt repayment. This is not a welcome step as it will destroy the SHG sector which should not be subsidised as SHG principles are being diluted. Instead this amount should be directed towards creating more micro-enterprises in rural areas and can be used as a risk mitigation fund for micro-enterprises started by rurban women. ix. The Rural Housing Scheme (by NHB) gets an amount of Rs 8,000 Crore for rural housing and will support creation of cheaper rural housing for rural people and provide much-needed employment for the rural youth. x. Watershed Development (The Neeranchal Programme) is being launched with an outlay of Rs 2,142 crore). Most watershed programmes of the State Governments follow the Department-led Watershed models which are top-down models and have always failed. The Wadi Scheme (Tribal Development Fund) has been a success as has been the KFW model of Watershed Development, both through NABARD. The rural community can implement watershed schemes at lesser costs but which are sustainable in the long run. xi. The Backward Region Grant Fund is being implemented in 272 backward districts in all states (Except Delhi and Goa) for building basic infrastructure in backward rural areas. In view of the Naxalite menace, this BRGF can be a useful tool to build up development activities in underdeveloped tribal areas. Combating Naxalites is not a “law and order “problem but is mainly a “lack of development” problem. xii. The National Rural Drinking Water Programme (Rs 3,600 Crore) needs to ensure safe drinking water for rural areas. It is a shame that as a nation we have failed to provide safe drinking water to every rural home/village and the burden falls on small children/women who gave to carry safe drinking water for miles! A real shame for a nation, which calls itself ‘civilised’. A very welcome step for Rural India and carries the blessings of rural women and children. xiii. Health and Family Welfare-What about more primary health care centres? What will 15 model Rural Health Research (Centres) do? Creating more medical college and AIIMs will not help the rural people who do not get adequate health care as most doctors do not wish to serve in rural areas and are out to make money in urban areas which already have a plethora of doctors! xiv. School Education- Providing drinking water and toilet facilities in all rural girl schools would be a big boon and enable more girls to attend schools. Giving free/ subsidised bicycles for secondary girl students and free lunches and free education would give an additional boost to education for rural girls. The agricultural sector: i. Creating more agri-research centers like IARI, in Jharkhand and Assam and more Agriculture/Horticulture Universities in AP, Rajasthan, Telengana and Haryana is welcome. But there is need of maintaining the crumbling infrastructure created with PL-480 funds for all Agricultural Universities which are not being allotted sufficient funds by the State Government. The research activities at these Universities and in ICAR research centres and at KVKs/ATMAS are not being effective in helping farmers with appropriate technologies and the extension services for farmer training are non- functional. Who reviews what is happening in the name of research in these centers? A sheer waste of talents and assets and funds. ii. Creating 100 Mobile Soil Testing Labs a welcome step and every farm should have soil health cards valid for one year. This will reduce wasteful use of fertilisers and more use if balanced chemical fertilisers. Organic and green manure use should not be forgotten. iii. Rs 8 lakh Crore has been set as target for Agriculture Credit with about 80 per cent going for crop loans. This is welcome but all commercial banks and especially the private sector banks are guilty of fudging the data and RBI should come down heavily on banks which provide doctored credit flow data for agriculture and allied activities. iv. The effective interest rate for farm credit is 4 per cent and some states provide further interest subsidy for prompt repayment of dues. This should be used by banks to build up a healthy loan repayment climate without vested interests seeking to with write-off farm loans, etc. More Farmer Clubs and Farmer Associations are needed to enable a healthy banker-borrower relationship to develop. v. Warehouse Infrastructure Fund - Rs 5,000 Crore allotted but this should be for building smaller warehouses at the panchayat/village levels so that farmers can store their produce on a scientific basis and reduce wastage. The restructuring of FCI, the CWC and the SWCS, is long overdue and extra warehousing facilities have to be built up in Odisha, Chhattisgarh, MP and Assam so as to avoid wastage during storage of food-grains and will enable farmers to earn more by storing food grains and sell when prices are better. The proposal to do away with the restrictive provisions of the state APMC Acts and the idea of a National Market Plan is long overdue and is a boon to farmers. vi. Productivity Issues - With only 15 per cent of agricultural credit going for asset creation in agricultural and allied activities, it is no wonder that our agricultural productivity remains poor when compared to China, Vietnam, Thailand, Costa Rica etc. The Vaidyanathan II (LTCCS) has been still-born for the last 6 years and if the Government desires to merge the two cooperative credit structures in every state, a suitable policy direction is required to be given. But term credit for agriculture is drying up and providing Rs. 5000 crore to NABARD when drastic steps are needed to be taken, is wholly inadequate. vii. Rural Communications - The National Highways Authority has been allotted Rs 37,880 crore to build up better roads and ensure removal of transport bottlenecks, which hamper the transportation of perishable farm produce. Simultaneously the railways and inland river transport systems are being upgraded and these cheaper and faster modes of transportation are good for rural India. viii. Solar Pump sets - One lakh solar pump sets are to be installed and Rs. 400 crore has been earmarked possibly for subsidies. In view of the huge capital outlay for each pump, this will possibly benefit big farmers only and the benefit to the rural economy will be in the form of less diesel use in diesel pump sets which are grossly inefficient. The money would have been better utilised in building ii KVA dedicated power lines for farmers so that small-holder farmers could switch over to more efficient electric pump sets. Maybe this issue will be taken up in the next budget. ix. Development of Agri-Biotechnology - There is an urgent need to improve productivity levels, which have been declining over the years due to neglect and official apathy since the last 20 years. The bio-technology clusters in Bengaluru and Faridabad are urgently needed to boost agricultural productivity using less land. As farm sizes become smaller due to sub-division of land and diversion of land for urbanisation and industrialisation. The Mohali agri-biotechnology centre and two proposed clusters at Pune and Kolkata are welcome as farmers will benefit from the use of technology in boosting agricultural productivity. Conclusions Finally what Rural India needs is that all these wonderful Schemes are actually implemented in letter and in spirit by a Bureaucracy that is in considerable disarray and that the funds earmarked for rural India are actually utilised and not diverted elsewhere or as is more common, funds are returned un-utilised to the Centre. Our bureaucrats are all for the” Status Quo” whatever it means as no bureaucrat is ever held to be responsible or accountable for not doing his job. A bureaucrat can sit on your file and make pointless queries so that nothing really happens or you eventually get fed up and abandon your bright Idea. This preserves the Status Quo in the natural order of the Universe. Or you start greasing palms right and left and hope for the best. A smallholder farmer does not count for much in the natural order of things and a few suicides by farmers every day is no big deal for a mighty Babu. The worst sufferers from this “Game of Spoils” are the farmers, rural artisans and weavers as there is none to promote their cause. Funds allocated for rural India must not be allowed to lapse and returned to the centre, unutilised and all bureaucrats should be held responsible if such an event occurs. There are some short-comings such as no funds for ICT in agriculture or support for SRI techniques to reduce input costs for smallholder farmers. There are also very small allocations for Climate Change, scientific breeding of Indigenous Cattle and for Inland Fisheries as their importance in de-risking small-holder farmers is yet to dawn upon our unsuspecting babus. Maybe 45 days is too short a period to do justice to the first budget and it is the second budget which will really add value to Rural India as some commentators have pointed out. But for all those who love rural India, the FM’s heart beats for the rural poor and he deserves accolades for a budget which is designed for rural India.
Posted on: Sat, 12 Jul 2014 17:42:26 +0000
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