Modi’s People-Friendly Budget to Benefit the Masses
The rural agricultural-based population which underpinned Prime Minister Narendra Modi’s rise to power is one of the biggest beneficiaries in India’s 2018-19 budget.
Presented on February 1, the election year budget was guided by a mission to uplift the agriculture sector, enhance rural development, and increase healthcare coverage. Spending on infrastructure also received a boost as part of the government’s ongoing focus on infrastructure development.
According to the budget, a series of structural reforms will propel India to be among the fastest
growing economies of the world. It states that the country is firmly on course to achieve over 8% growth on the back of a rebound in manufacturing, services and exports.
Agriculture, a primary focus
In keeping with an earlier pledge by PM Modi to double farmers’ income by 2022, the agriculture sector will benefit from a number of initiatives aimed at improving the welfare of farmers and perpetuating the growth of the sector. Among the key initiatives in the agriculture sector are:
- A Minimum Support Price (MSP) of 1.5 times more than the input cost was announced for various agricultural crops, fulfilling one of the most important promises made in Modi’s manifesto.The budget also announced that a mechanism will be developed to facilitate coordination with State Governments to ensure that farmers get the MSP for their produce.
- The budget also proposed an institutional mechanism for price and demand forecasting, which will enable farmers to make timely decisions about which crops to grow and in what quantities to ensure profitability.
- In addition, an Agri Market Development Fund was established to provide the infrastructure for retail markets for agricultural produce; a new initiative, “Operation Green” was launched to enable farmers to produce products for the retail market at suitable prices; and cooperatives and individual investors can now obtain loans at favourable interest rates for fisheries and animal husbandry infrastructure.
Healthcare, the world’s largest program
The budget announced the establishment of the world’s largest healthcare programs, bringing the country closer to providing universal healthcare. Among the key initiatives announced in the budget are:
- The establishment of a National Health Protection Scheme which will provide coverage to approximately 500 million people.
- The program is aimed at benefiting 100 million poor families by providing coverage of up to $8,000 per family per year for secondary and tertiary care hospitalisation.
- Through the National Health Protection Scheme, health care services will be brought closer to communities through the establishment of 1,500 health and wellness centres.
- The government also plans to set up 24 new government medical colleges and hospitals by upgrading existing district hospitals.
It is estimated that almost one million jobs, particularly for women, will be generated by the new healthcare initiatives.
Rural Sector, uplifting the standards of the poor
In addition to initiatives announced for the agriculture sector which dominates the rural areas, the rural sector will also benefit from the following initiatives.
- 80 million poor women will get new connections to liquid petroleum gas.
- 40 million poor people will be connected to power.
- The government plans to construct 20 million toilets in next fiscal year
- The government remained committed to its “housing for all initiative” by 2022, with 5.1 million houses already constructed in rural areas and another 10 million expected to be constructed during the fiscal year.
Infrastructure, focusing on capacity creation
Railways to improve connectivity were the largest component of infrastructure spending in the budget which announced that India needs investment of US $780 billion in the infrastructure sector.
A large portion of railways capital expenditure will be devoted to capacity creation, including:
- The first modern train-sets are to be commissioned during 2018-19
- 600 major railway stations to be redeveloped
- Mumbai and Bengaluru rail networks will be expanded
- 4000 kilometers of railway network are to be commissioned for electrification during 2017-18.
- 18,000 kilometers of doubling, third and fourth line works and 5000 kilometers of gauge conversion would augment capacity and transform almost the entire network into Broad Gauge.
It was also announced that the capacity of the Airport Authority of India which runs 124 airports will be expanded five-fold and that 64 unconnected airports across the country will be connected.
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