India Union Budget 2012-13 – A quick-view of agriculture and social sector trends
India Union Budget 2012-13 – A quick-view of agriculture and social sector trends
India’s national budget was unveiled today by Finance Minister Pranab Mukherjee in Lok Sabha. The Union Budget 2012-13 comes in the backdrop of a sluggish growth rate – lowest in the past three years, down to 6.5 or so – lack of political consensus on key demands by the industry and a poor show by the Indian National Congress that leads the ruling United Progressive Alliance.
The national elections are about two years away and logically media/experts have been speculating on a budget that walks a compromise path between populism and need for continued economic incentives to the growth sectors. But by the time the presentation by the Finance Minister was over the markets fell except for a few sectors and the India Inc. has started voicing discontent on far too less in the budget on the radical reform agenda.
Let’s take a look at some of the areas in the budget that lie within the extended realm of Landesa/RDI work.
But before that let’s look at how the Indian economy has been doing in terms of government spending on social sector. As a matter of practice, each Union Budget presentation is preceded sharing of India Economic Survey, which is the most comprehensive and in-depth measuring of economic performance, utilisation and policy focus in different sectors.
The key headline in the India Economic Survey is that expenditure on social services as a proportion of Gross Domestic Product (GDP) has increased from 5.57% in 2006-7 to 7.34% in 2010-11.
The survey, presented in Parliament by Finance Minister Pranab Mukherjee, said India had faced the global economic crisis without much impact on the social sector. This claim needs to be taken with a pinch of salt, as studies have revealed that food price rise has hit the poor – urban and rural – hard and has pushed many further into hunger.
Importantly, the union government expenditure on social services and rural development, both plan and non-planned has consistently gone up over the years and had increased from 13.38% in 2006-7 to 18.47 percent in 2011-12.
According the survey, the expenditure on social services was expected to be 6.74% of GDP in 2011-12, as per the budget estimates.
Interestingly, the finance minister also said the Indian economy was at the cusp of a revival, as agriculture — and services – have continued to grow at a ‘decent pace’.
With intense focus on service and industry for over two decades for propelling India’s exclusive growth, the above statement is important as agriculture continues to employ the largest number of people in India. And not just that, India’s poverty and lack of development is characterised by its rural reality.
Now returning to key headlines on rural and agriculture sectors proposed in the current Union Budget; allocations to agriculture sector and some key national projects for expansion of agricultural facilities and credit extension have been increased. Along with this, the mixed bag of green revolution experiment will now be extended to north eastern states of India.
Agriculture continues to be a priority to the government. The total plan outlay for agriculture and cooperation has been increased by 18% from Rs17, 123 crore in 2011-12 to Rs. 20, 208 crore in 2012-13.
The allocation for scheme "Bringing Green Revolution in Eastern India" has also been increased by Rs. 600 crore to Rs 1,000 crore based on the success of the programme that led to an additional paddy production of 7 million tonne in the Kharif season of 2011-12 crop year.
The allocation for Rashtriya Krishi Vikas Yojna (RKVY) was also increased by 17% to Rs 9,217 crore.
"Farmers need timely access to affordable credit. I propose to raise the target for agricultural credit in 2012-13 to Rs5, 75,000 crore. This represents an increase of Rs1 lakh crore," Finance Minister said.
As India enters the 12th Five Year Plan, beginning April 1, he said the government focus would be on five key areas:
We know from our grounded work and numerous projections that hunger and child malnutrition is directly linked with food security and control over most basic assets.
Last month, Agriculture Minister Sharad Pawar said a national food security program that guarantees cheap food grains to the poor won't succeed unless the state-run distribution, storage and transport network is revamped.
It has been estimated that at least a third of the subsidized food supply doesn't reach the poor now because of leakages in the state-run public distribution network. Making matters worse, tons of food grains rot in open fields where it is stored after the harvest for want of proper warehouses.
Once the law is passed, the food subsidy bill is expected to swell to 950 billion rupees from 723.71 billion rupees in 2011-12. The Food Security Law is currently being debated in the parliament.
Indian Government is now working on targeting its outlays for the social sector better and has promised an exciting policy tool based on what is called the census lab.
India’s national budget was unveiled today by Finance Minister Pranab Mukherjee in Lok Sabha. The Union Budget 2012-13 comes in the backdrop of a sluggish growth rate – lowest in the past three years, down to 6.5 or so – lack of political consensus on key demands by the industry and a poor show by the Indian National Congress that leads the ruling United Progressive Alliance.
The national elections are about two years away and logically media/experts have been speculating on a budget that walks a compromise path between populism and need for continued economic incentives to the growth sectors. But by the time the presentation by the Finance Minister was over the markets fell except for a few sectors and the India Inc. has started voicing discontent on far too less in the budget on the radical reform agenda.
Let’s take a look at some of the areas in the budget that lie within the extended realm of Landesa/RDI work.
But before that let’s look at how the Indian economy has been doing in terms of government spending on social sector. As a matter of practice, each Union Budget presentation is preceded sharing of India Economic Survey, which is the most comprehensive and in-depth measuring of economic performance, utilisation and policy focus in different sectors.
The key headline in the India Economic Survey is that expenditure on social services as a proportion of Gross Domestic Product (GDP) has increased from 5.57% in 2006-7 to 7.34% in 2010-11.
The survey, presented in Parliament by Finance Minister Pranab Mukherjee, said India had faced the global economic crisis without much impact on the social sector. This claim needs to be taken with a pinch of salt, as studies have revealed that food price rise has hit the poor – urban and rural – hard and has pushed many further into hunger.
Importantly, the union government expenditure on social services and rural development, both plan and non-planned has consistently gone up over the years and had increased from 13.38% in 2006-7 to 18.47 percent in 2011-12.
According the survey, the expenditure on social services was expected to be 6.74% of GDP in 2011-12, as per the budget estimates.
Interestingly, the finance minister also said the Indian economy was at the cusp of a revival, as agriculture — and services – have continued to grow at a ‘decent pace’.
With intense focus on service and industry for over two decades for propelling India’s exclusive growth, the above statement is important as agriculture continues to employ the largest number of people in India. And not just that, India’s poverty and lack of development is characterised by its rural reality.
Now returning to key headlines on rural and agriculture sectors proposed in the current Union Budget; allocations to agriculture sector and some key national projects for expansion of agricultural facilities and credit extension have been increased. Along with this, the mixed bag of green revolution experiment will now be extended to north eastern states of India.
Agriculture continues to be a priority to the government. The total plan outlay for agriculture and cooperation has been increased by 18% from Rs17, 123 crore in 2011-12 to Rs. 20, 208 crore in 2012-13.
The allocation for scheme "Bringing Green Revolution in Eastern India" has also been increased by Rs. 600 crore to Rs 1,000 crore based on the success of the programme that led to an additional paddy production of 7 million tonne in the Kharif season of 2011-12 crop year.
The allocation for Rashtriya Krishi Vikas Yojna (RKVY) was also increased by 17% to Rs 9,217 crore.
"Farmers need timely access to affordable credit. I propose to raise the target for agricultural credit in 2012-13 to Rs5, 75,000 crore. This represents an increase of Rs1 lakh crore," Finance Minister said.
As India enters the 12th Five Year Plan, beginning April 1, he said the government focus would be on five key areas:
- Frame policies that trigger domestic demand recovery
- Ensure rapid rise in private investment
- Remove bottlenecks in agriculture, energy, transport, coal, power and national highway
- Address malnutrition
We know from our grounded work and numerous projections that hunger and child malnutrition is directly linked with food security and control over most basic assets.
Last month, Agriculture Minister Sharad Pawar said a national food security program that guarantees cheap food grains to the poor won't succeed unless the state-run distribution, storage and transport network is revamped.
It has been estimated that at least a third of the subsidized food supply doesn't reach the poor now because of leakages in the state-run public distribution network. Making matters worse, tons of food grains rot in open fields where it is stored after the harvest for want of proper warehouses.
Once the law is passed, the food subsidy bill is expected to swell to 950 billion rupees from 723.71 billion rupees in 2011-12. The Food Security Law is currently being debated in the parliament.
Indian Government is now working on targeting its outlays for the social sector better and has promised an exciting policy tool based on what is called the census lab.
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