Arun Jaitley invoked Swami Vivekananda to drive home the point that the Budget for 2018-’19, which he presented on Thursday, was aimed at helping rural India and farmers. “Let her arise – out of the peasants’ cottage, grasping the plough; out of the huts of the fisherman. Let her spring from the grocer’s shop, from beside the oven of the fritter-seller,” the finance minister quoted the 19th-century monk while announcing a clutch of schemes that he claimed would boost rural incomes.
In an interview to Doordarshan later, Jaitley pointed out that rural economy and agriculture were not doing well and, therefore, needed support from the government.
Yet, there was no sharp increase in budgetary support for these sectors. The allocations for rural development and agrarian sectors as well as social welfare schemes – most of which benefit rural populations – for the next financial year largely follow the trends of the last few years. In several cases, in fact, the rise in budgetary allocation was less than that for 2017-’18. Moreover, some social sector schemes have been allocated less money than was the impression given by the finance minister in his speech in Parliament.
The allocation for agriculture, for example, has been raised by 12.8%, the same as the last time. The allocation for the rural sector has been increased by 1.8%, much less than the 19% hike in the previous Budget. Similarly, the increase in the allocation for social sector schemes in this Budget is 14.5% as compared to 21.4% in 2016-’17. The government expenditure on the health sector will grow by just 2.8% in 2018-’19 as against 36.5% in the current financial year ending March.
Where is the money?
The government has not increased the budget for the Mahatma Gandhi National Rural Employment Guarantee Scheme from the current Rs 55,000 crore. This despite the fact that this amount has proved insufficient to pay the wages even in the current financial year. Several states have exhausted the funds allocated under the scheme and have been demanding more money to pay the pending wages. Arrears for unpaid wages from previous years have been pending as well. Considering the statutory rise in the wages to account for inflation, the amount of work available under the scheme would be less than in the previous year, thereby negatively impacting the growth in rural incomes.
Jaitley announced the creation of a Fisheries and Aquaculture Infrastructure Development Fund and an Animal Husbandry Infrastructure Development Fund with a total corpus of Rs 10,000 crore. But the actual allocation in the Budget is just Rs 47 crore.
Similarly, the finance minister announced a Rs 2,000-crore Agri Market Infrastructure Fund for developing nearly 22,000 rural Haats into Grameen Agricultural Markets and for upgrading the 585 existing Agriculture Produce Market Committees. The Budget, however, has no allocation for upgrading the Haats. Neither does the outcome budget, the part detailing the targets set by the government, have details about it. Jaitley too did not clarify in his speech if this fund would be set up in the coming financial year.
The finance minister, though, was emphatic about a programme for enhancing power supply. “We are spending Rs 16,000 crore under this scheme,” he said. “You can very well imagine our anxiety and restlessness even with one hour power cut. Think about those women and children whose houses will not get electricity. Their life is going to change because of Pradhan Mantri Saubhagya Yojana.”
But he clearly got his numbers wrong. For this scheme, the government had already approved Rs 16,320 crore as the total spend for two years from 2017 to 2019. Of this, the Centre was supposed to provide Rs 12,320 crore. In this financial year, 2017-’18, the scheme was to get Rs 3,600 crore from the Centre but received only Rs 2,000 crore. For 2018-’19, it was supposed to get Rs 8,720 crore but the Budget has allocated only Rs 3,500 crore.
In the new Budget, the government has also cut the funding for another rural electrification scheme, Deen Dayal Upadhyay Gram Jyoti Yojana, by about 30%.
Cutting spending
In his speech, Jaitley announced the launch of a “Restructured National Bamboo Mission with an outlay of Rs 1,290 crore” to promote rural income from bamboo cultivation. But the allocation for the coming financial year is just Rs 300 crore.
The minister spoke about helping the poor “fulfil the dream of their own house” and set a target of providing every poor person a house of her own by 2022. Jaitley said the government will construct 51 lakhs houses in rural India under the Prime Minister Awas Scheme this year and as many the next year. But the allocation for the scheme has been cut 5% from last year and pared to Rs 27,505. Its rural component has been cut from Rs 23,000 crore to Rs 21,000 crore.
In 2018-’19, the central government will also spend less than on Pradhan Mantri Krishi Sinchai Yojana, Integrated Child Development Scheme and Swachh Bharat Mission, among other major schemes, than it did in 2017-’18.
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