Union Budget 2018: A Realistic Approach to boost Indian Economy
On 1st February, 2018 Finance Minister Shri Arun Jaitley presented the union budget for 2018-19 with a new developmental framework with prime focuses on agrarian economy, rural development, social welfare, health, education and infrastructure development.
In his budget for 2018-19, the Finance Minister announced couple of agri-centric measures, including to raise the minimum support prices (MSP) for crops, to at least 1.5 times that of the production cost, creation of a Fisheries and Aquaculture Infrastructure Development Fund and an Animal Husbandry Infrastructure Development Fund with a total corpus of Rs 10,000 crore, a Rs 2,000-crore Agri-Market Infrastructure Fund for developing nearly 22,000 rural Haats into Grameen Agricultural Markets and for upgrading the 585 existing Agriculture Produce Market Committees.
Another scheme “Operation Green” which focuses on kitchen staples such as tomatoes, onions and potatoes, to protect farmers from a sudden price crash was also launched. “Operation Green’’ shall promote Farmer Producers Organizations (FPOs), agri-logistics, processing facilities and professional management too.
Keeping in view of the export potentials of farm products, the export norms for agricultural commodities have been proposed to be liberalised with the aim at facilitating the way for making India’s agri-produce, particularly fruits and vegetables, compatible with global food-safety requirements.
The Finance Minister also emphasised on rural electrification and enhanced power supply in the villages. He announced Rs 16,000 crore under Pradhan Mantri Saubhagya Yojana for such power supply.
The prime objective behind such schemes is to turn the countryside into a vibrant growth engine and shifting focus on farmer’s income as against age old focus on food policy. The initiatives have been taken keeping in view of the government’s promise to double farmer incomes by 2022. “You merge yourselves in the void and disappear, and let new India arise in your place. Let her arise – out of the peasants’ cottage, grasping the plough; out of the huts of the fisherman. Let her spring from the grocer’s shop, from beside the oven of the fritter-seller. Let her emanate from the factory, from marts, and from markets. Let her emerge from groves and forests, from hills and mountains’’, the Finance Minister quoted Swami Vivekanand while announcing such schemes which would surely boost rural incomes.
Social sectors contribute to the all round development of the society. The spending on these sectors has a direct impact on health and education and both these sectors carry 2/3 weightage in Human Development Index. A flagship programme National Health Protection Scheme (NHPS) termed as ‘the world’s largest government-funded health care programme,’ was launched to cover 10 crore poor and vulnerable families with Rs 5 lakh health insurance. The government announced an allocation of Rs 2000 crore for the scheme in 2018-19. Commitment of Rs 1,200 crore towards the National Health Policy, 2017 was also made which aims at building 1.5 lakh health and wellness centres across India, providing comprehensive health care, free essential drugs, and diagnostic services. Announcement of establishment of 24 new government medical colleges and hospitals by upgrading existing district hospitals in the country was also made.
With government’s commitments towards social sector, the Finance Minister announced the establishment of ‘Ekalavya Model Residential Schools’. These schools, at par with Navodaya Vidyalayas, will be built in all blocks of the country having more than 50 percent Scheduled Tribe population and at least 20,000 tribal people.
An initiative named, ‘Revitalising Infrastructure and Systems in Education (RISE)’, by 2022, with a total investment of Rs 1,00,000 crore in the next four years is another significant announcement of the budget.
The union budget has given significant emphasis on infrastructure, including rural infrastructure to support long term strategy to create employment through skill development. As per budget presentation, the centre will invest as much as Rs. 5.97 trillion in creating and upgrading infrastructure in the next financial year. Infrastructure development has been one of the focus areas of the present government in centre and it has substantially increased the budget allocation from around Rs.1.81 trillion in 2014-15 to Rs. 4.94 trillion in 2017-18. To quote the Finance Minister, “Our country needs massive investments estimated to be in excess of Rs.50 lakh crore in infrastructure to increase growth of GDP, connect and integrate the nation with a network of roads, airports, railways, ports and inland waterways and to provide good quality services to our people.”
The government has unveiled the largest-ever rail and road budget of Rs.1.48 trillion and Rs.1.21 trillion, respectively in 2018-19. The Finance Minister stated that the cabinet had approved the Bharatmala scheme to strengthen the roads network, for which the government will raise Rs.5.35 trillion as equity from the market. Total investment for Bharatmala is estimated at Rs. 10 trillion which is the largest ever outlay for a government road construction scheme India.
As per the government’s new roadmap for infrastructure, plans to introduce seaplanes and a passenger-friendly toll policy will be initiated. The government is constantly working on a “pay as you travel” policy for toll plazas.
Apart from creating infrastructure for seaplanes to boost connectivity, the push will also be towards the government’s regional connectivity scheme which aims to connect 56 airports and 31 helipads. The scheme, Ude Desh Ka Aam Nagrik (UDAN), proposes that at least half the seats on every flight should have a fare cap of Rs. 2,500 per seat per hour of flying.
Economic reform is a prime agenda of the government. Such reforms has resulted in rise of Foreign Direct Investments (FDIs), reduced in circulation of cash currency in the market, increased in tax base and greater digitization of the economy. Indian economy is now 2.5 trillion dollar economy – seventh largest in the world and it is expected to become the fifth largest economy very soon.
As said by the Finance Minister in his budget speech, the government has taken up programmes to direct the benefits of structural changes and good growth to reach farmers, poor and other vulnerable sections of our society and to uplift the under-developed regions with particular focus on strengthening agriculture and rural economy, provision of good health care to economically less privileged, taking care of senior citizens, infrastructure creation and working with the states to provide more resources for improving the quality of education in the country.
All these structural reforms will help Indian economy to achieve stronger growth on long term basis with government’s vision of ‘‘Minimum Government and Maximum Governance’’.