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A moment wasted

Budget makes some good moves on agriculture. But they don’t add up to reforms necessary to meet aspirations in rural India.

Written by Editorial |
February 3, 2017 12:31:42 am
budget, union budget, budget 2017, budget spending, food and agriculture budget, infrastructure budget, indian express editorial page, latest news, indian express Rural India in general and agriculture in particular desperately requires a substantial step-up in public investment, whether it is in roads, electricity, irrigation, telecom and broadband infrastructure, housing and sanitation, education and farm research.

In 2013-14, the last year of the UPA regime, the Centre’s total expenditure on just food and fertiliser subsidies, at Rs 1,59,339 crore, exceeded the agriculture and rural development ministries’ combined budget of Rs 92,642 crore, inclusive of interest subvention on short-term credit to farmers. Four years on, in the latest Union budget of the Narendra Modi government, that gap between the former (Rs 2,15,339 crore) and the latter (Rs 158,784 crore) has narrowed. But just a little. While it is nobody’s case that wheat or urea shouldn’t be subsidised — the real issue is about their efficient delivery to poor consumers/resource-poor farmers — or that increased outlays for Krishi Bhawan would automatically translate into improved outcomes in Bharat, one thing is clear: Rural India in general and agriculture in particular desperately requires a substantial step-up in public investment, whether it is in roads, electricity, irrigation, telecom and broadband infrastructure, housing and sanitation, education and farm research.

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And given that resources are scarce, it calls for reforms leading to a redirection of public spending from consumption to investment.

On this count, the Modi government’s record is mixed at best. Yes, budget support for rural roads (Pradhan Mantri Gram Sadak Yojana) in the current as well as coming fiscal, at Rs 19,000 crore each, is more than double the Rs 8,885 crore and Rs 9,806 crore allocated in 2012-13 and 2013-14, respectively. The budgeted expenditure of Rs 23,000 crore for rural housing (Pradhan Mantri Awas Yojana) in 2017-18 is, again, almost twice the Rs 12,982 crore that was spent in 2013-14. The creation of a Long-Term Irrigation Fund with a total corpus of Rs 40,000 crore, a new Pradhan Mantri Fasal Bima Yojana that is certainly an improvement over previous crop insurance schemes in terms of coverage and sums insured (though the subsidy provision of Rs 9,000 crore may prove inadequate), and crediting of MGNREGA wages directly into the accounts of beneficiaries alongside efforts to link the programme with building of productive assets (farm ponds, dub wells, compost pits, etc.) are, no doubt, welcome initiatives. But all these hardly add up to reforms necessary to meet the rising aspirations in rural India. The Modi government could have taken the lead for these bold reforms — replacing subsidies with direct benefit transfers and deregulating urea prices, among other things — in the first half of its tenure.

In that sense, it is an opportunity squandered. The last decade was a good time for Bharat, thanks to a combination of high global commodity prices that helped boost farm incomes and also general growth that created jobs in industry, construction, services and other non-agricultural avenues.

It was a mistake not to have done the difficult reforms when times were good. It would be an even graver mistake not to do them now — when there aren’t many alternatives, really.

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