In the last full budget by the Bharatiya Janata Party (BJP)-led National Democratic Alliance before the election in 2019, Finance Minister Arun Jaitley increased the allocation for agriculture by 13% and infrastructure by 21% with a clear focus on rural India, where 69% of the population or 834 million Indians live.

The budget for the farm and allied sectors has risen nearly 13% for 2018-19 to Rs 63,836 crore from the revised estimate of Rs 56,589 crore in 2017-18, according to Budget 2018-19.

Jaitley set aside Rs 5.97 lakh crore in the Budget 2018-19 for infrastructure, an increase of 21% against the revised estimate of Rs 4.94 lakh crore for 2017-18.

Support prices to farmers hiked to 150% of production cost

The government has decided to increase the minimum support price (MSP)--at which it buys produce from farmers--for kharif (monsoon) crops to one-and-half times the production cost.

This may come as relief to farmers at a time when a glut in tur (pigeon pea), a kharif crop, led to a fall in MSP, leading to unrest and stress in rural Karnataka, Maharashtra, Telangana, and Gujarat, as IndiaSpend reported on June 8, 2017.

A new scheme, Operation Greens, has been given Rs 500 crore to address price volatility of farm commodities, such as tomato, potato and onion, at a time when farmers dumped potato by the wayside in Uttar Pradesh in January 2018, IndiaSpend reported on January 26, 2018.

Agriculture credit has been increased by 10%--or Rs 1 lakh crore--to Rs 11 lakh crore for 2018-19.

Despite a 11% rise in loans to agriculture over a year to a record Rs 10 lakh crore in 2017-18, the share of professional moneylenders in agricultural credit has increased, IndiaSpend reported on January 5, 2018.

Irrigation, crop insurance also gets more funds

In 2018-19, irrigation projects will start in 96 “deprived-irrigation districts”--where less than 30% of farmland is irrigated--with Rs 2,600 crore set aside under the Pradhan Mantri Krishi Sinchai Yojana (PMKSY) or the Prime Minister’s Irrigation Programme.

The government plans to invest about Rs 50,000 crore over five years to 2019-20 to reach its target of water for every farm, IndiaSpend reported on January 26, 2018.

Budget 2018 has increased allocation to PMKSY by 33% to Rs 4,000 crore from the revised estimate of Rs 3,000 crore in 2017-18.

In financial year 2017-18, when eight states declared drought, the Pradhan Mantri Fasal Bima Yojana--Prime Minister’s Crop Insurance Scheme--has been given a 22% budget boost, from the revised estimate of Rs 10,698 crore in 2017-18 to Rs 13,000 crore.

Transport sector in focus

“Infrastructure is the growth driver of economy,” Jaitley said in his speech. “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 transport sector received an “all-time high allocation” of Rs 1.35 lakh crore.

About 35,000 km of road construction in phase-I has been approved under the Bharatmala Pariyojana (road and highways project), with an estimated cost of Rs 5.35 lakh crore. In 2017-18, the government also plans to complete national highways exceeding 9,000 km.

The government has maintained its allocation to the Pradhan Mantri Gram Sadak Yojana--Prime Minister’s Rural Roads Programme--at Rs 19,000 crore, same as last year.

Capital Budget For The Infrastructure Sector
Ministry/Department Revised Estimate 2017-18 (In Rs crore) Budget Estimate 2018-19 (In Rs crore)
Ministry of Coal 14,478 15,799
Ministry of Development of North Eastern Region 330 600
Ministry of New and Renewable Energy 9,516 10,317
Ministry of Petroleum and Natural Gas 88,850 92,885
Ministry of Power 65,201 54,770
Ministry of Civil Aviation 2,693 4,086
Department of Telecommunication 13,541 21,486
Ministry of Defence 4,908 5,485
Ministry of Railways 1,20,000 1,46,500
Department of Atomic Energy 9,220 7,321
Ministry of Housing And Urban Affairs 39,046 61,361
Ministry of Road Transport and Highways 1,10,137 1,21,425
Ministry of Shipping 3,290 4,292
Ministry of Steel 11,428 11,294
Department of Higher Education 250 30,750
Ministry of Electronics & Information Technology 1,426 8,773
Total 4,94,313 5,97,143

Source: Budget 2018-19

To improve connectivity in the border areas, Jaitley proposed construction of tunnel under Sela Pass--located between Tawang and west Kameng districts of Arunachal Pradesh.

“Rohtang tunnel has been completed to provide all weather connectivity to the Ladakh region, and contract for construction of Zojila Pass tunnel of more than 14 km is progressing well,” Jaitley said.

The government identified 73 strategically important roads along the India-China border, according to this report released by the Comptroller and Auditor General (CAG) of India, the auditor of the government, in March 2017, IndiaSpend reported on January 31, 2018.

Of these 73 roads, the construction of 61, estimated to cost Rs 4,644 crore, was assigned to Border Roads Organisation with a deadline of 2012. “Only 22 roads were completed till March 2016, which incurred expenditure worth Rs 4,536 crore or 98% of the estimated cost,” the CAG report had said.

Of the 24 roads selected for audit, only six roads, costing Rs 164 crore, were completed up to March 2016. “Even these were not fit for running specialised vehicles/equipment due to limitations in execution of works”, the CAG report said.

The government more than doubled the allocation for Digital India programme to Rs 3,073 crore in 2018-19 from the revised estimates of Rs 1,426 crore in 2017-18, in a push for digital infrastructure.

The government has identified 99 cities that will collectively get Rs 2.04 lakh crore under the Smart Cities Mission to develop infrastructure. Under the Atal Mission for Rejuvenation and Urban Transformation programme--to upgrade urban infrastructure, such as water supply and sewage--state plans for 500 cities, with a budget of Rs 77,640 crore, has been approved, the finance minister said.

(Paliath and Mallapur are analysts with IndiaSpend.)

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