E-Paper
Credit, more roads and houses for rural India
At the same time, the budget for fiscal 2019-2020 reduced the outlays for the flagship rural jobs guarantee programme and the rural housing scheme.
In the first budget of its second term, the National Democratic Alliance (NDA) government on Friday outlined plans to boost rural credit, supply water to all village households and build more houses and roads to transform the countryside as part of its New India initiative.
At the same time, the budget for fiscal 2019-2020 reduced the outlays for the flagship rural jobs guarantee programme and the rural housing scheme. Total rural budget stands at Rs 117647.19 crore, up from Rs 112403.92 crore in the BE 2018-19.
In her first budget speech, finance minister Nirmala Sitharaman underlined that rural India, farmers and the weaker sections were the focus of all government programmes. Under Pradhan Mantri Aawas Yojana (PMAY), the government will build 19.5 million rural houses in three years and also launch the third phase of the Pradhan MantriGramSadakYojana(PMGSY), the rural roads scheme, to upgrade 125,000 kilometres of roads over the next five years at an estimated cost of Rs 80,250 crore.
Rural roads, according to ministry officials, will link the villages with agricultural markets, cutting the cost of transportation and making it easier for farmers to sell their produce.
“PMGSY has brought many socio-economic gains in the rural areas. To accelerate the speed of achieving universal connectivity of eligible habitations, the target of connecting the eligible and feasible habitations was advanced from 2022 to 2019. All-weather connectivity has now been provided to over 97% of such habitations,” Sitharaman said.
Funding for PMGSY was increased by 22%, from Rs 15,500 crore in the revised estimate for of 2018-19, to Rs 19,000 crore in the budget.
The total rural budget stands at Rs 117,647.19 crore, up from Rs 112,403.92 crore in the budget estimate fo 2018-19.
“The focus of the government on rural economy also underlines that it is desperate to create more jobs when the rural unemployment rate is around 6%,” said Achirangshu Acharya, an economist at Vishwabharati University.
The way the government has packaged the rural development budget, emphasising micro credit, rural roads, housing and the rural job programme, shows it is aimed at increasing employment and creating new jobs, Acharya added.
A key part of this year’s budget proposals is to allow every eligible women’s Self Help Groups member with a Jan Dhan account an overdraft of Rs 5,000.One woman in every SHG will also be made eligible for a loan up to Rs 1 lakh under the MUDRA Scheme, Sitharaman said, referring to loans targeted at entrepreneurs.
“This is a major proposal as it transforms nano enterprises to micro rural enterprises. The flow of credit was a big issue in the past but this allows women to expand their scale of business and earn more,” said rural development secretary Amarjeet Sinha.
Sitharaman recalled the NDA government’s initiatives of Ujjwala, under which cooking gas connections are provided free to poor households, and Saubhagya Yojana, aimed at providing electricity to all. A combination of efficient implementation and enthusiastic adoption has significantly improved access to energy for rural households, she said.
“By 2022, the 75th year of India’s independence, I would like to assure the nation that every single rural family, except those who are unwilling to take the connection will have electricity and a clean cooking facility,” she said.
The Centre has also set up an ambitious target to ensure access to safe and adequate drinking water. Sitharaman announced that the new Jal Shakti ministry “will look at the management of our water resources and water supply in an integrated and holistic manner, and will work with States to ensure Har Ghar Jal to all rural households by 2024 under the Jal Jeevan Mission”.
But while the government banks on the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) to boost both rural water supply and build more houses than it did in its first term, it reduced the allocation under both heads. The outlay for MGNREGS in fiscal 2020 is Rs 60,000 crore, Rs 1,000 crore less than it spent in the previous fiscal. The rural housing scheme’s budget has been reduced from the revised estimate of ₹18,516 crore in the previous year to Rs 16,116 crore.
Sinha pointed out that the government had allowed the rural development ministry to borrow money from the National Bank For Agriculture And Rural Development (NABARD) to build houses.
“We could borrow Rs 21,975 crore from NABARD but we have taken a loan of Rs 18,000 crore so far. So, there’s still some headway to borrow from NABARD,” said Sinha.
“As far as MGNREGS is concerned, remember it’s a demanddriven programme. So, in the supplementary demands for grants in the coming months, we can seek more money. In our estimate, the total expenditure on MGNREGS would reach between Rs 65,000 and Rs 70,000 crores,” he said. Under MGNREGS, the government offers 100 days of manual work to at least one member of every rural household.
The Centre also allocated Rs 9,200 crore, a hike of Rs 300 crore from Rs 8,900 crore in the 2018-19 revised estimate, to the National Social Assistance Programme that offers pensions to needy senior citizens.
“The focus of the government on rural economy also underlines that it is desperate to create more jobs when the rural unemployment rate is around 6%. the way the government has packaged its schemes — giving emphasis on micro credit, rural roads, housing and of course MGNREGS, is aimed to emprove employment and create new jobs,” said Achirangshu Acharya, economist with Vishwabharati University.
