Budget through Rural Periscope !!


Blog by: Parveen Kaswan 


                       “India does not live in its towns but in its villages.”

The above quote by Mahatma Gandhi still shines with relevancy. As still 70% of people are residing in the villages. So the rural sector has essential impact on overall development of the country. The Annual Budget 2016-17 should be appreciated because of its special emphasis on rural and agriculture sector.

The centralised planning has always created a problem for rural India. The Funds, Functions and Functionaries are very much required for making services accessible to rural people, whether they are roads, lights, education, health, water etc. This budget has provided with a quantum bounce in funds to local bodies. It has allocated 2.87 lack crore as Grant in Aid for Gram Panchayats and Municipalities, which translates into an average assistance of over 80 lakh per Gram Panchayat and over 21 crore per Urban Local Body. This is truly vital for rural base and administration conveyance. This will bring a better era of financial decentralisation which is very important to make local bodies a true unit of democracy.

Budget has allocated sum of 38,500 crore for MGNREGS in 2016-17. Budget is trying to dovetail the functioning of MGNREGS with water conservation and natural resource management programmes. Which is a smart thought as it will redress the intrinsic lacunae in this programme, most imperative is absence of durable asset creation.

The agriculture sector is facing a real problem as it is no more a profitable proposition. To increase the farmers income we have few ways like; increasing the crop prices, reducing input costs or increasing the productivity. Government can increase prices only up to a limit given the inflationary pressure it will bring and it ought to better be left to market dynamics. In this budget government has tried to look at other ways for improving farmers income. One is to increase the productivity. As we know productivity and irrigation has direct and positive relation. In India only 46% net cultivated area is under assured irrigation. Additionally the majority of rainfall in India is just a three month phenomenon due to monsoon and that also suffers highly from variability. The budget paper is talking about covering 28.5 lakh hectares irrigation under ‘Pradhan Mantri Krishi Sinchai Yojana’ and also completing some of the languishing irrigation projects under Accelerated Irrigation Benefits Programme. A corpus of 20000 crore is also earmarked in NABARD for Long Term Irrigation Fund. These initiatives will definitely help in improving the irrigation scenario in India and hence productivity per hectare.


This years budget is also talking about ‘sustainable management of ground water resources’ and some 6000 crore is allocated for it. This is a very good step given the depletion of ground water in recent years due to unchecked and rapid withdrawal of water. The green revolution has also led to the tube well boom which has resulted in lowering of ground water level to a great extent. The fund can help in improving ground water scenario aslo. The paper is additionally focusing on Pulses production, Organic farming and Soil Health Card scheme. The other two important announcements with respect to improving price discovery through marketing are a higher allocation of 19000 crore for rural roads and Unified Agriculture Marketing Scheme. The road infrastructure is very important for marketing of crops for farmers as it has direct impact on their prices. For example a Sugarcane farmer has to deliver the crop in 24 hours of harvesting otherwise it will have a toll on sugar content. Same is true for quality of horticultural crops which is important for food processing industry.

The special emphasis is on Rural credit and the target is of 9 lack crore, which is extremely significant. The schemes like Kisan Credit Card scheme are a boon for famers for getting convenient and guaranteed credit. This proposal will help in overall betterment of agriculture sector, for example improving in Mechanisation, better seed and process adaptation, improving the field channels and hence improving water use efficiency and so on.

Clearly when there is so much clamour in the agriculture sector because of low profitability and reducing public investment, this budget is a brighter spot as far as agriculture and rural sector is concerned. At the same time we will find some people who will not favour the budget as according to them corporate sector is not happy. Then remember we are here talking about a sector which has very few voices on social media and on television screens.


Author: Parveen Kaswan ( Author is an Engineer and holds a Masters Degree in Engineering Designs from Indian Institute of Science, Bangalore. He hails from a farmer family in Northern Rajasthan. Can be reached at parveenkaswan@gmail.com)

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