At last, a Budget for the villager?

¨….quite like the manufacturing and services sectors depend on quality of infrastructure for their competitiveness, our agriculture also will be able to make a difference, in terms of productivity and competitiveness, if supported by proper facilities like irrigation, rural roads, access to markets, electricity and telecommunications¨ – this is what we had to say in one of our editorial pieces last year. Therefore, it goes without saying, that we are delighted to see all the rural investments and initiatives the government has proposed in Budget 2016/17. This has to do with irrigation, roads, sanitation, electricity connections, public transportation systems – all in our villages. Add to this the large monies and/or effort earmarked for the Panchayats, MNREGA, interest subvention on agricultural loans, Crop Insurance Scheme, rural LPG connections for poor women, direct benefit transfer for fertilisers, PURA and many more such small and big proposals, and we have a Budget that is finally designed for the hitherto forgotten villager. We truly wish that collectively, we succeed in implementing these initiatives, and thereby achieve the goal of doubling our farmers´ income by 2022 (do not know if it is nominal income or real (inflation adjusted) income))!

The only discordant note in this rural thrust, is the absence of anything of substance for the schools and health centres in villages, on the facile pretext that this is now in the states´ territory. We think that the central government of a large, diverse and developing country like India can ill afford to take a hollow and superficial position like that. Instead, it should go about formulating health and education strategies and developing recommended model policies for the states to implement, with much more urgency. The government will fail in its duties if it were not to mentor the states in this matter of truly national importance. Where does this leave our manufacturing or services sectors, or for that matter, our slogans of Make in India, Skill India and Smart Cities? What happens to Start Up India or AMRUT or Sagarmala? Other than roads and highways, the Budget has disappointed all other infrastructure segments like ports, airports and urban infrastructure. Take, for example, the pet project Smart Cities, where a provision of Rs.3,200 cr has been made, against a requirement of Rs.10,000 cr. Take AMRUT, where money provided is Rs.4,000 cr against an estimated requirement of Rs.15,000 cr. Against a demand of Rs.33,000 cr for metros all over the country, only Rs.10,000 cr has been allocated. In the current year, the roads and highways sector has done reasonably well even in the face of headwinds, and has been amply rewarded with a provision of upward of Rs.1 lakh cr. This augurs well not only for travellers but also for road contractors and developers in the immediate term.

With the emphasis on roads, railways, housing, irrigation (and not so much directly on Make in India), one can safely expect a spurt in demand of skilled construction workers. There are two or three serious implications of this. One – this will further increase the bias of employment opportunities in seasonal/informal/unorganised sectors, which are very weak on welfare measures and protection of workers´ rights. Secondly, construction projects may get delayed due to shortage of skilled labour, caused by demand – supply imbalance in the labour market. On one side, we have a potential growth in construction projects, and on the other side, possible improvements in wage opportunities in villages. The construction companies will have to find answers to this complex issue.