As India aspires to be a $5 trillion economy, the budget has continued to focus on the ‘
gaon’, ‘garib’ and ‘kisan’. So here’s a quick outline of the budget presented today along with its implications – Farmer Productivity, Growth and Development:
The reforms announced in the budget such as forming of 10,000 new Farmer Producer Organizations could help farmers improve realisations from crop production and ensure economies of scale for farmers over the next five years.
Schemes to promote ‘zero budget farming’ – i.e. farming ‘without credit’ and ‘no use of chemical fertilizers’ could not only provide financial support to farmers but also help enhance productivity.
The budget also re-emphasises the importance of upgrading Fishing and fishermen communities through various schemes which will be critical to address critical gaps in the value chain, including infrastructure, modernization, traceability, production, productivity, post-harvest management, and quality control.
Further, enabling farmers to benefit from eNAM and taking steps to help them realise fair prices will aid consumption in the near future.
Rural uplift and well-being: Rural electrification: Electrification of rural villages continues to be a focus area for the government as there will be efforts to promote the use of LED bulbs and solar stoves with the objective of providing electricity to every rural home. This could further stimulate demand for durables, media exposure to branded consumer products, leveraging cheap and affordable internet rates. Water Security: The budget focuses on the continued focus on sustainable water supply management across the country. Under the Jal Jeevan Mission, there is an objective to provide Har Ghar Jal (piped water supply) to all rural households by 2024. Further, this could also help in better utilization of water to further enhance irrigation techniques, ultimately leading to better crop productivity. Housing: Schemes such as Pradhan Mantri Awas Yojana – Gramin (PMAY-G) aim to achieve the objective of “Housing for All” by 2022. These houses are also being provided with amenities like toilets, electricity and LPG connections thus uplifting the overall living conditions for farmers, thus also increasing the quality of life. Employment Focus: Lastly, job creation continues to be a priority for the government. A Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship’ (ASPIRE) contemplates to help develop 75,000 skilled entrepreneurs in agro-rural industry sectors. Initiatives around MSME development could also play an integral role in job creation. Further, with a view to drive a digital, cashless economy, the budget has provided the impetus for digital modes of payment.
In summary, the budget seems to take a leaf from the economic survey about driving a ‘virtuous cycle’ wherein investment, agricultural productivity, job creation feed into each other to drive growth and consumption. Robust implementation of this vision will be key to releasing this vision of a $5 trillion economy!
Harsha Razdan is partner and head- consumer markets at KPMG in India