Budget 2018: Focused gaze on social, academic front

India’s agriculture sector has received enormous attention and rightfully so. The farm sector has been extremely stressed due to the vagaries of the weather and the disconnect between cost and income.

The farm sector is responsible for more than half of our people’s livelihood. So it is very comforting to note the government’s intent to double farm incomes by 2022. Farm reforms have been a crying need for decades and this Budget aims to tackle one of the biggest issues faced by farmers — the disconnect between cost and income.

The Budget has announced that minimum support pricing (MSP) of crops will be linked to production costs and fixed it at 1.5 times the costs.

This is an excellent move. It will help farmers earn a return on their investments, and be less vulnerable to unpredictable weather conditions and volatile market cycles.

There have been other announcements like expansion of warehouse depository system, strengthening and expansion of e-NAM and development of Gramin Agricultural Markets that will be exempted from regulations of APMCs. All these will resonate with India’s agricultural markets, and hopefully boost rural consumption.

Yet another initiative is the introduction of health insurance coverage for all. The announcement of Rs 5 lakh medical cover for 10 crore households is a huge positive step. It will bring over 50 million individuals under insurance coverage and provide them with a much-needed financial net. We are moving towards universal health coverage. There have been other big ticket social messages. Free gas connections for about eight crore households, which will have the twin benefit of reducing air pollution and improving living conditions.

To improve the quality of education, the quality and training of teachers, needs to be upped manifold. So Union finance minister Arun Jaitley has announced an integrated B.Ed. programme. The use of technology to upgrade skills of teachers (through the recently launched digital portal “Diksha” is vital.

Likewise, to increase the digital intensity in the education system in rural areas by gradually moving from “black board” to “digital board” is much needed.

By emphasising health security and education, the Finance Minister reiterated the view that this goes to build India’s human capital. India’s great growth promise is its young demography.

The reduction in the corporate tax rate to 25 per cent for companies with a turnover under Rs 250 crore will give the much required impetus to the MSME sector. This will also spawn jobs — an urgent need for bolstering the economy.

Finally, even as the fiscal deficit for FY18 at 3.5 per cent has exceeded the Budget target, the positive aspect is that the government is sticking to the path of fiscal consolidation with a budgeted fiscal deficit target of 3.3 per cent for FY19.

Kumar Mangalam Birla
Chairman, Aditya Birla Group