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Tuesday, Jul 07, 2009
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Budget for the aam aadmi

K. Balchand

NEW DELHI: Promising a real wage of Rs. 100 a day under the National Rural Employment Guarantee Act (NREGA) and an interest subvention for farmers, the UPA government’s budget for 2009-10 focussed on the rural economy.

It proposed a multi-pronged stratagem to integrate agricultural and rural activities, coming good on both the farmers and rural labour.

For the farmers, the short-term agriculture loans up to Rs. 3 lakh, would be available at lower rates of 7 per cent. As an incentive for those meeting the repayment deadline, the government has proposed an additional subsidy of one percent, effectively reducing the interest rate to 6 per cent. .

For rural labour, the government proposed to increase the minimum wages to Rs. 100 a day under the NREGA .

The other major decision involved a convergence of the NREGA with other agriculture-related schemes in a bid to increase farm productivity, which had taken a hit in 2008-09.

Finance Minister Pranab Mukherjee not only raised the agriculture credit flow by 13.25 per cent, from Rs. 2.87 to Rs. 3.25 lakh crore, but also extended additional interest subvention of one percent on short-term crop loans , aiming to tackle the economic slowdown and countering the adverse impact of the delayed monsoon.

The moves, it is hoped, will help regain the 4 per cent growth rate in the sector, which had slumped last year to 1.6 per cent.

Rs. 411 crore have been provided in the budget estimates to meet the subsidy burden.

In view of the late onset of the monsoon, the government extended the deadline to return 75 per cent of over dues of farmers owning more than two hectares of land by six months, from June 30, 2009 to December 31, 2009.

Mr. Mukherjee announced his decision to set up a task force to suggest a way out for farmers in parts of Maharashtra, who had been caught in the trap of private moneylenders and could not benefit from the loan waiver scheme

More funds for flagship programmes

The flagship programmes of the United Progressive Alliance (UPA) have seen an increased allocation in the Budget proposals for 2009-10.

The outlay for the ambitious Bharat Nirman programme of six schemes for the development of rural infrastructure is proposed to be stepped up by 45 per cent in comparison to 2008-09.

This programme is an important initiative for bridging the gap between the rural and urban areas and improving the quality of life of people, particularly the poor in the rural areas, Finance Minister Pranab Mukherjee said in his speech in Parliament on Monday.

The allocation for the Pradhan Mantri Gram Sadak Yojana (PMGSY) is proposed to be increased to Rs.12,000 crore; that for the Rajiv Gandhi Grameen Viduytikaran Yojana (RGGVY) to Rs. 7,000 crore; and for the Indira Awas Yojana (IAY) to Rs.8,800 crore.

The Minister also announced that a sum of Rs.2,000 crore is proposed to be allocated for the Rural Housing Fund in the National Housing Bank (NHB) from the shortfall in the priority sector lending of commercial banks. This will boost the resource base of the NHB for their re-finance operations in rural housing sector. The move will broaden the pace of rural housing.

The Minister also announced launching of a new scheme called the Pradhan Mantri Adarsh Gram Yojana for integrated development of 1,000 villages in which the population of Scheduled Castes is above 50 per cent. There are 44,000 such villages in the country.

Pilot scheme

The scheme is being launched on a pilot basis with an allocation of Rs.100 crore. Under the scheme, each village would be able to avail gap funding of Rs.10 lakh over and above the allocations under Rural Development and poverty alleviation schemes. On successful implementation of the pilot phase, the scheme will be extended in the coming years, Mr. Mukherjee added.

Employment exchanges

The Centre will launch a project for modernising the employment exchanges through public-private partnership.

The aim is to help a job seeker register on-line from anywhere and approach any exchange.

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