Budget 2018 gives push to the rural sector, allocates Rs 14.34 trillion

The Narendra Modi government sought to give a marked thrust to the rural sector in this year's Union Budget, its last full-year budget before the 2019 Lok Sabha polls, with the central ministries getting an allocation of Rs 14.34 trillion for creation of livelihood and infrastructure in rural areas.

The thrust, evidently with an eye on the 2019 Lok Sabha polls as also to correct perception after the Gujarat Assembly elections of the BJP losing ground in rural areas, will see efforts towards boosting employment, connectivity, housing, toilets and electricity connections in the rural areas.

Finance Minister Arun Jaitley devoted considerable part of his budget speech to efforts of the government to boost rural economy and agriculture.

"As my proposals indicate, focus of the government next year will be on providing maximum livelihood opportunities in the rural areas by spending more on livelihood, agriculture and allied activities and construction of rural infrastructure," Jaitley said.

"In the year 2018-19, for creation of livelihood and infrastructure in rural areas, total amount to be spent by the ministries will be Rs 14.34 trillion, including extra-budgetary and non-budgetary resources of Rs 11.98 trillion," he added.

Besides the employment due to farming activities and self employment, the expenditure is aimed at creating employment of 3.21 billion person days, 317,000 kilometers of rural roads, 5.1 million new rural houses, 18.8 million toilets and provide 17.5 million new household electric connections besides boosting agricultural growth.

With the rural economy inextricably linked to agriculture, Jaitley announced moves to boost income of small and marginal farmers who comprise 86 per cent of the total farmers. He said the government will develop and ugrade the existing 22,000 rural haats into Gramin Agricultural Markets (GrAMs). Physical infrastructure will be strengthened in these GrAMs using Mahatma Gandhi National Rural Employment Guarantee Act and other schemes.

The GrAMs will be electronically linked to e-NAM (national agriculture market) and exempted from regulations of APMCs (Agricultural Produce Marketing Committee). They will provide farmers facility to make direct sale to consumers and bulk purchasers.

The government has brought forward the target of connecting all eligible habitations with an all-weather road under Pradhan Mantri Gramin Sadak Yojana (PMGSY) to March, 2019 from March 2022 and has now decided to widen the ambit of the scheme further to include major link routes which connect habitations to agricultural and rural markets (GrAMs), higher secondary schools and hospitals. The PMGSY Phase III will include these linkages.

The government is also seeking to boost organic farming, and Jaitley said that Women Self Help Groups (SHGs) will also be encouraged to take up organic agriculture in clusters under National Rural Livelihood Programme.

He proposed to substantially increase allocation of National Rural Livelihood Mission to Rs 57.50 billion in 2018-19 and expressed confidence that loans to SHGs will increase to Rs 750 billion by March 2019.

With a target to provide a house to every poor family by 2022, Jaitley said 51 lakh houses will be constructed in rural areas in 2018-19, adding to 51 lakh houses expected to be constructed in 2017-18.

Jaitley also proposed to set up five lakh wi-fi hotspots which will provide broadband access to five crore rural citizens. He said one lakh gram panchayat had been connected through high-speed optical fiber network under phase I of the Bharatnet project, which has enabled broadband access to over 20 crore rural Indians in about 2.5 lakh villages.

He said it is also proposed to allow strong Regional Rural Banks to raise capital from the market to enable them increase their credit to rural economy.

Jaitley said the government aims at improving the quality of life in 115 aspirational districts by investing in social services like health, education, nutrition, skill upgradation, financial inclusion and rural electrification. The expectation, he said, is that these districts will emerge as "model of development".

"While making the proposals in this year's Budget, we have been guided by our mission to especially strengthen agriculture, rural development, health, education, employment, MSME and infrastructure sectors of Indian economy. I am sure the New India which we aspire to create now will emerge," he said.