The rural focus, with the looming 2019 Lok Sabha polls, was expected. It’s quite a package: Non-remunerative prices for farm produce, a key distress point, has been addressed by raising the Minimum Support Price (MSP) to 1.5 times the cost of production. To bring farmers within the institutional market process, Finance Minister Arun Jaitley has said that as many as 22,000 haats or local level markets will be upgraded for buying agricultural produce; Rs 500 crore has been set aside for ‘Operation Green’ to provide cold storage and processing support for agri-products. Credit allocation for agricultural activities has been hiked to a whopping Rs 11 lakh crore.
The government is also setting up a fund with a seed capital of Rs 10,000 crore to support fisheries and animal husbandry. A small but important policy decision has been taken to allow lessee cultivators to draw crop loans, earlier denied to them since they didn’t own the crucial collateral: land.
It’s been a windfall for agri-related and rural market oriented companies like Hindustan Unilever, P&G and Pepsi. But it is still unclear if the package is enough to lift the rural gloom or how the government intends to fix the MSP in relation to the cost of production.
The disappointment is over what the Budget does not have. Over the previous four budgets, the government had committed itself to mega projects and targets, which if implemented, have the potential of changing the face of the nation’s infrastructure and boosting employment. These include the Smart Cities Mission, Housing for All by 2022, and the AMRUT Infrastructure Programme earlier called the JNNURM. Long-term programmes that target revitalisation of grass-roots infrastructure need budgetary support and audit year-on-year till they are close to fruition.
Yet we find nothing in this Budget that tells us how and when the prime minister’s marquee programmes like Digital India and Startup India will be implemented. There are a few insipid statements in the Budget like 99 cities have been chosen for the ‘Smart City’ Mission and that Rs 2,350 crore worth of projects have been implemented. But that is a drop in the ocean! Similarly, the government had set out to build 10 million homes by 2022. The audit report says barely 2 lakh homes per year have been built in the last three years. There was serious expectation that the housing sector would receive both tax and policy support this year. But none came. Is the government serious in implementing these vision statements? Or were they made for social impact?
The capital markets too have been left stressed out. The 10 per cent long-term capital gains tax on stocks has thrown cold water on retail investors in a surging market. Raising the bar for lower corporate tax of 25 per cent from Rs 50 crore-turnover companies to Rs 250 crore ones is a definitive statement in support of SMEs; but the big hitters who account for 90 per cent of the country’s industrial turnover have been left in the cold.
The one big-ticket initiative from Jaitley has been the National Health Scheme which will cover 10 crore families and provide a health cover of Rs 5 lakh per family. The minister has billed it the largest health programme in the world and if implemented comprehensively, it is likely to provide jobs as well. The economic affairs secretary, in his post-Budget conversations, admitted the actual outlay is not jaw-dropping, just Rs 4,000 crore; but the scheme for the first time lays the foundation of a Universal Health Protection Programme. Besides this, the social sector has been left begging.
The outlay for education, nutrition and health find cursory mention in the Budget. The Modi plan was to build 15 million toilets in urban areas and 100 million in rural India; there is very little audit and push to this programme. A basic nutrition programme at the grass roots requires over Rs 1 lakh crore over a five-year plan; after a good start in 2012, the programme is now stuttering for lack of funds. Overall, the Budget has some initiatives, but as an overall vision to growth and poverty alleviation, the document stutters.