The recently released World Bank data reveals that India has now become the sixth largest economy relegating France to the seventh position. Obviously, on account of disparity in the size of the population, there would be a very significant difference in the per capita of the two countries. If we keep growing at the rate which is being projected, it is likely that next year we will be the fifth largest economy ahead of Great Britain. This is in consonance with the rest of the narrative. Being the fastest growing economy for the last four years, we can look at the next decade as one of economic expansion. We have already seen a significant move up in India’s ranking in the ease of doing business and as a preferred investment destination. Today we stand to be tested in the midst of a global challenge thrown up on account of the international crude oil prices and the trade war.
Obviously, we have started witnessing many of the advantages of a fast growing economy. More consumption, more production, more industries, expanding service sector, greater urbanisation, many more jobs, more economic activity and certainly more revenue. However, ever since Prime Minister Narendra Modi took over, the Government’s own yardstick for performance has become stiffer. How quickly are we able to deplete poverty levels of a section of our people poses a major challenge? How are we able to translate the advantages of this faster growth to rural India which has always been less advantaged? How are we able to bring a significant section of our people into the neo-middle class so that their aspirations can also be met with?
The Government’s approach
The Government’s approach in this regard is one of clarity. We will not follow the model of 1970s & 1980s of the Congress Party. That model essentially involved populist slogans rather than sound policy and actual expenditure for the welfare of the poor. The 1971 ‘Garibi Hatao’ model was one of redistribution of poverty rather than the generation of wealth and resources. The result of this misguided approach was that the lives of the poor did not move up significantly. On the contrary, the present Prime Minister is a man of many words and many more actions. He announces stiff targets and programmes which at first sight appear to be difficult, if not impossible. He follows it up with the actual implementation and delivers the promise. It is, therefore, important to analyse the actual delivery in rural India.
The Government’s specific programmes
In the current year, the total amount to be spent for livelihood and infrastructure in rural areas, both from the Budget, extra-Budget and non-budgetary resources, is Rs.14.34 lakh crores. The social sector expenditure which also benefits the rural areas is in addition to this. Agricultural credit to be disbursed is Rs.11 lakh crores. The Kisan Credit Cards have been extended to fisheries and animal husbandry farms. For fourteen agricultural crops, in what appeared impossible, the farmers will get an MSP for Kharif crops at 150% of the cost of production.
To double the farmers’ income and dairy infrastructure development funds with an outlay of Rs.10881 crores has been approved. For rural housing, the Awas Yojana has a total outlay of Rs.81975 crores. The sanction of Rs.9,000 crores has already taken place. The micro irrigation fund with a corpus of Rs.5,000 crores has been created. A long term irrigation fund with an initial corpus of Rs.20,000 crores has been created. Cumulative loans sanctioned under this have already touched Rs.57487 crores. Similarly, the fisheries and aqua infrastructure development funds have been created. For rural infrastructure development fund, the allocation is of Rs.28,000 crores. There is an animal husbandry development infrastructure fund of the size of Rs.5020 crores. There have been large sanctions for research and education, Pradhan Mantri Fasal Bima Yojana, the interest subsidy for the short term credit to be given to the farmers. The market intervention and the price support schemes have an additional provisioning.
This year alone this investment will provide to rural India, 321 crore person days of employment, 3.17 lakh kilometres of rural roads, 51 lakh rural homes, 1.88 crore toilets, 1.75 crore of new electricity connected households. The unprecedented resources sanctioned to rural India are intended to bring a fundamental change in the quality of life in rural India. Each village will be connected with a pucca road. Target for pucca housing, each house to have electricity, each house to have a toilet, every poor family to have a gas connection. Every farmer to extend his activities from agriculture to dairy, animal husbandry, fisheries, to get the benefit of farm insurance, to get a much higher MSP and under each of the above mentioned programmes, to be a part of the intended success stories. The amount being spent on MNREGA is much higher than what was spent by the UPA.
The other social welfare programmes
The other social welfare programmes of the Government are intended to benefit the weaker sections and those living in the rural areas are the prime target of these benefits. The success of the Jan Dhan programme has connected each home to the banks. It has facilitated the delivery of credit to the weakest. The low cost insurance policies and the attractive Atal Pension Yojana has immensely benefitted these sections. The Mudra loans, 74% of which has been granted to the women entrepreneurs has certainly benefitted while providing a supplemental income to those families with a modest income. Once the ambitious ‘Ayushman Bharat’ is implemented, hospitalisation for those 40% at the bottom of the ladder will be possible where the expenditure is upto Rs.5 lakhs a year for each year per family. The total amount sanctioned this year for the implementation of the low cost food under the Right to Food programme is Rs.1,60,000 crores.
What does this cumulatively work out?
What does the entire investment being made for conferment of benefits to rural India, to India’s farmers and to other deprived sections of the society, mean in the long run to our people? We will witness increased incomes, increased social security, an improved quality of life, higher income from agriculture and better healthcare. Already investment in these areas is incurring a higher rural consumption. The construction sector is growing by 11% because those with higher incomes in rural areas are improving upon their housing. Cement and steel sales have increased. All the auto companies, particularly those whose target sales are in rural areas, have witnessed a much greater purchasing power in rural India which is leading to a significant improvement in their sales.
India’s growth story at a fast pace is likely to continue as per assessment of all credible agencies. Obviously, a high trajectory growth leads to a higher revenue. Prime Minister Narendra Modi has shaken the traditional thinking process and ensured that rural India and the less privileged get the first right of resources. If this and increased expenditure continues for the next decade, the impact on India’s rural poor would be very significant. This benefits all – irrespective of religion, caste or community. The Congress provided India’s poor with slogan. Prime Minister Modi has given them resources. This will ensure faster growth and lead to a faster depletion in the poverty.