A Responsible Budget With An Eye On The Future

By putting the rural sector and fiscal consolidation first, the finance minister has presented a responsible budget with an eye on the future.

- N Madhavan

The dawn of a new era in farming is in sight,” said MS Swaminathan, the father of India’s Green Revolution, immediately after the announcement of Budget 2016 on February 29. “Giving an income orientation to farming is probably the most significant announcement made by the finance minister.” These words should have been music to the ears of Finance Minister (FM) Arun Jaitley who had received plenty of flak after Budget 2015 for not giving due importance to the rural and social sectors. Cut to 2016, and Jaitley and his government have repositioned themselves as the farmers’ friend.

The rural sector, which is reeling under the impact of two successive monsoon deficits, accounts for 55 percent of total demand in the country. It follows that if rural India is not set right, the country’s growth will not accelerate. Taking cognisance of that, the FM articulated the government’s intent Ad to double farm income by 2022, and announced a slew of measures to help achieve it.

A large allocation (Rs 35,984 crore) was made to fund irrigation projects, improve agricultural practices, increase access to market (Rs 19,000 crore for rural roads) and create an additional storage capacity of 97 lakh metric tonnes. These are long-term measures. For immediate benefit, he increased the allocation for MGNREGA (the Mahatma Gandhi National Rural Employment Guarantee Act) to Rs 38,500 crore; and not just that, he has widened its scope by reorienting it to efforts such as soil conservation, watershed management and ground water harvesting.

Through steps like these, the FM could well have laid the foundation for India’s double-digit growth in the near future.