With farm distress at a high, the focus of the budget was obviously going to be on the farmers. The government had committed to double farm incomes by 2022 and it was time for serious steps. Here are 3 key steps that the budget took towards giving a boost for rural India.
Come, helicopter money
If the Congress had just suggested the idea of Minimum Income Guarantee, the NDA government actually implemented the same in its budget speech. As per the plan, marginal farmers holding less than 2 hectares of land would be given an annual supplementary transfer of Rs.6000. This would be done in 3 tranches of Rs.2000 each and would be executed by DBT. The idea is great as it would give these farmers subsistence in bad years when the crops fail or when drought conditions are prevalent. For an average farmer, this would be an approximate income accretion of around 20% and that should come as a big relief in bad times. The plan will cover a total of 12 crore farmers across India and will cost the exchequer Rs.75,000 crore. That is one of the reasons the government has projected a higher fiscal deficit of 3.4%. In the last one year, the government has realized that the MSP may be good on paper but is hard to implement unless it manages procurement. This helicopter money payout is a lot simpler, immediate and can be done without leakages.
Benefits for MSMEs
The budget has thrown a plethora of incentives for the medium and small enterprises. They form the backbone of the Indian industrial system and create a chunk of the employment in the rural and semi-urban areas. The government has announced a special interest subvention scheme for MSMEs to the extent of 2-5% if the MSMEs repay their loans on time. In addition, these MSMEs also get an interest subvention in case they register for GST. The government, in the budget, also committed to do 25% of all its sourcing requirements only through MSMEs. All these are likely to be a leg up for MSME, which form the backbone of the economies of rural and semi-urban India.
Social security net
In the previous budget, the government had assured the Ayushman Bharat scheme to provide medical insurance cover to nearly 10 crore families to the tune of Rs.5 lakhs per family. Union Budget 2019 has announced the much sought after pension scheme for labor in the unorganized sector. A monthly pension of Rs.3,000 for life will be paid to these workers against a nominal contribution of Rs.55-100 per month. This will provide the much needed social security to the unorganized workers. Even as MSP stabilizes, these moves will ensure that the rural sector has genuine reasons to cheer about! ©