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Strengthening The Economy
NHPS also holds the potential to boost the banking and finance sectors
Photo Credit : Ritesh Sharma
The last complete term budget of a government is often expected to lean on populist measures and sops to please the disenchanted sections of the electorate. Finance Minister Arun Jaitley, however, managed to evade this pitfall. Even as he delivered his last full budget ahead of the election year, he chose to tread on a highly balanced path. While addressing the pain areas of the economy — most notably rural distress and unemployment — Budget 2018 did not lose sight of the long term objectives of fiscal consolidation and market reform.
The government through its previous annual budgets and its monetary and fiscal policies has shown great resolve in undertaking several corrective measures and reforms for strengthening the economy. This year’s budget has further consolidated these efforts.
Reviving the Rural Economy
Signs of rural distress have been visible for some time now. Declining incomes, paucity of non-agricultural opportunities in rural areas, and lack of market access to farmers are concerns that farmers have raised time and again. Budget 2018 has tried to address these issues by raising the Minimum Selling Price (MSP) to 1.5 times the production cost and by laying down a corpus of Rs 2000 crore to develop agricultural market connectivity. While the former will help farmers get good returns, the latter will help them easily sell their produce. If implemented properly, these initiatives hold a lot of promise towards stabilising farm incomes, reducing waste of farmer produce and reviving the rural sector. Reviving a slowing rural economy will help improve rural demand for multiple sectors including the bicycle sector.
The Budget also talks big on infrastructural development in the country including roads, highways and Smart Cities. An outlay of over Rs 5 lakh crore for roads and over Rs 2 lakh crore for Smart Cities is an investment that will yield multiplier effects on the economy. Fast tracking infrastructure development will not only create direct jobs but also has the potential to boost job creation in a series of sectors indirectly such as tourism and allied activities.
The most notable aspect of the budget has been the announcement of an ambitious though long overdue National Health Protection Scheme. Touted as the ‘world’s largest government funded healthcare programme’, the scheme aims to provide a health insurance cover of up to Rs 5 lakh per family (covering 100 million poor and vulnerable families) per year. In a country where medical insurance penetration is meager and medical expenses throw thousands of families into poverty every year, such a scheme was the need of the hour. Interestingly, this move also holds the potential to boost the banking and finance sectors.
Other Key Takeaways
Organisations working in the field of clean mobility were expecting a clear and cogent direction from this Budget on the roadmap for adoption of electric vehicles in India. While, the Budget was silent on this aspect, there were some positive takeaways for the sector. The allocation of Rs 16,000 crore for electrification of rural areas is a positive move as it promises to have a positive impact in creation of the electric vehicular ecosystem in the long term. At the same time, the special scheme to resolve the challenge of air pollution in the National Capital Region is appreciable and is in accordance to our objective of promoting clean mobility.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.