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Budget likely to focus on rural-economy schemes to blunt farm crisis

The Modi government is likely to target the larger rural economy as back-to-back drought and falling commodity prices have hurt rural earnings, impacting the livelihoods of nearly half of all Indians.

union budget Updated: Feb 22, 2016 18:06 IST
Zia Haq
Zia Haq
Hindustan Times
Farm crisis,farmer suicide,Modi government
Back-to-back droughts have deepened a farm crisis in the country leading to a spurt in suicide by farmers. (Reuters Photo)

The Modi government is looking to address a worrying agrarian crisis with a set of schemes and Budget provisions aimed at ramping up the larger rural economy, rather than just the farm sector, people familiar with the development told HT.

Budget 2015-2016 is likely to provide for a more effective Pradhan Mantri Krishi Sinchayin Yojana, a flagship scheme announced last year to create irrigation infrastructure, with substantially higher allocations. The scheme, which had failed to make much headway because it was strewn across several ministries, is likely to be consolidated and given a mission mode under a single command, an official said.

A back-to-back drought and falling commodity prices have hurt rural earnings, impacting the livelihoods of nearly half of all Indians who depend on a farm income in Asia’s third largest economy.

Read More | Nearly half of India’s districts drought-hit as crisis accelerates

On February 21, the Modi government will kick off the Rurban Mission, a new scheme to create non-farm employment for rural youth by creating urban centres, which will act like employment hubs. The budget is likely to set aside sufficient funds for it.

In his review meetings with the rural development ministry, Prime Minister Narendra Modi has stressed employment generation as the key focus area, the official added.

According to a Cabinet note, the first phase will target creation of 100 such job-spinning centres that will have the hard infrastructure for generating economic activity, such as roads, power and digital connectivity. The overall target will be to create 300 such zones.

The budget is also likely to inject money for rural housing to kick off the rural component of the Modi government’s mission for housing for all by 2022. Rural housing units should last at least 40 years without much damage to the structure, according to the proposed new guidelines.

The current amount of Rs 70,000 for Indira Awaas Yojana, the government’s free housing scheme, is insufficient and the rural affairs ministry expects higher infusion of funds in the budget needed to achieve a target 30 million dwelling units.

Read More | New Central insurance scheme to rescue farms from April

The irrigation programme will bundle all ongoing schemes such as the accelerated irrigation benefit programme of the water resources ministry, integrated watershed management programme of the department of land resources and on farm water management component of National Mission on Sustainable Agriculture of the farm ministry into a consolidated programme.

First Published: Feb 19, 2016 09:37 IST