Budget 2020 was
announced against a dismal economic scenario. Both consumption and investment
were bleak, leading to poor GDP growth and high unemployment. As a result,
there were excessive expectations from this annual announcement.
Yet despite all
the brickbats that followed, due to the lack of sparkle and razzmatazz, one
thing was clear, the theme of inclusion was woven in at various levels, without
succumbing to populist giveaways. In a sense, the Finance Minister plodded on
the tough and uphill path that the government chose when it declared that “fundamental
structural reform and inclusive growth” were its priorities, almost six years
ago. This distinct theme was visible through various rural initiatives, social
sector proposals and measures to encourage enterprise.
Greater
involvement of Women and SHGs at the rural level: The Finance Minister announced a 16-point action plan towards doubling
farmers` incomes by 2022. While detailing proposals to enhance and upgrade
agri-warehousing, cold storage, reefer van facilities, etc., she announced a
Village Storage Scheme to be run by the SHGs, as a backward linkage. This scheme aims at securing farmers with
better holding capacity and reducing their logistics cost. The strategic involvement of Women SHGs
endorsed the government’s confidence in their track record of delivering
success stories.
Expansion of credit to agri-sector funding
through NBFCs and Cooperatives: The Finance Minister acknowledged the role of NBFCs
and cooperatives in the agriculture credit space. She proposed to expand the NABARD re-finance
scheme to INR 15 lakh crore for agriculture credit in 2020-21, covering all
eligible beneficiaries of the PM-KISAN scheme.
Setting up hospitals in the PPP mode in Aspirational
Districts: Budget 2020 proposed a Viability Gap funding
window for setting up of hospitals, in aspirational districts (to begin with) where
presently there are no Ayushman empanelled hospitals. The dual effect of such
an initiative would be the large-scale employment opportunities for youth, in
addition to availability of medical facilities for the underprivileged. Interestingly,
proceeds from taxes on medical devices would be used to support this vital
health infrastructure.
Setting up an Investment Clearance Cell to
facilitate grass root entrepreneurship: To encourage
entrepreneurship amongst youth and remove road-blocks from their path, the
Finance Minister proposed to provide “end to end” guidance and support through an
Investment Clearance Cell. This facilitator would offer pre-investment
advisory, information related to land banks and clearances at the Centre and
State level, etc. and would work through a portal.
Greater involvement of youth and start-ups in
infrastructure development: The Finance Minister
suggested that a project preparation facility for infrastructure projects
should be set up to actively involve young engineers, management graduates and
economists from Indian Universities. She also proposed that all infrastructure
agencies of the government would receive a directive to involve youth-power in
start-ups to help in rolling out value added services in quality public
infrastructure for citizens. If this works, it will not only create jobs for
our educated youth but bring fresh ideation into the infrastructure,
catapulting its development.
The ‘X factor’ for success
There have been many budgets before which
have acknowledged the need for better income generation opportunities amongst
the underprivileged sections of society and a more universal approach to wealth
creation. However, implementation has always been the stumbling block. This
begs the question: Why should these initiatives be any different?
In the current era, the availability of data
and access to analytics, Fintech, Internet of Things (IOT) and other evolving
technological enablers are emerging as game changers. During the Budget 2020
speech, the Finance Minister assured that her government intends to leverage
these new tools to rapidly expand inclusion, saying, “Our vision is that all
“public institutions” at Gram Panchayat level such as Anganwadis, health and
wellness centres, government schools, PDS outlets, post offices and police
stations will be provided with digital connectivity. So, Fibre to the Home (FTTH) connections
through Bharatnet will link 100,000 gram panchayats this year.”
Once these
initiatives are underway, visibility of the impacts of various schemes at the
grass root level will become more transparent and the execution should receive
a great thrust, as it has in the case of DTBs and other tech driven
initiatives. Effectively, the government could catalyse its mission for more
inclusive growth by riding on technology.