Budget 2016: FM Arun Jaitley zooms into Bharat; hits the rural road

Country roads, take me home...

Finance minister Arun Jaitley seems to be crooning this John Denver song as he vrooms to rural India with a definite plan for the downtrodden.

In his second full Budget, while focusing on the nine pillars of agriculture, farmers' welfare, rural employment, infrastructure and investments, among others, Jaitley clearly spelt out his new slogan – Bharat Nirman, brick by brick.

While the urban middle class and the rich find themselves are lost in the labyrinth of taxes, rural India is definitely looking up. The Budget is surely catering to rural consumption and demand, probably in distress after consecutive bad monsoons wreaked havoc in the rural economy.

While taxing the uber rich with a 4% infrastructure cess on SUVs and other luxury cars, a hike in surcharge by 3-15% on those having an annual income of over Rs 1 crore, and a 10% tax on dividends earned for more than Rs 10 lakh, the finance minister has more than supported the cause of rural India.

In a country where hundreds of farmers remain in misery, the FM has shown such largesse, and rightly so.

He has proposed to bring 28.5 lakh hectares under irrigation and fast-track 89 irrigation projects, requiring Rs 86,500 crore in five years. He has promised that farmers' income would be doubled by 2022. What is more, a staggering Rs 9 lakh crore will be given as agricultural credit in 2016-17.

His promise of Rs 2.87 lakh crore as grant-in-aid to gram panchayats and municpalities translates into Rs 81 lakh per gram panchayat and over Rs 21 crore per municipality.

Jaitley has also proposed a massive mission to provide LPG connections to poor households, which will benefit 1.5 crore poor households in 2016-17. That scheme will continue for two more years to cover 5 crore below povery line (BPL) households.

These connections would be given in the name of the woman member of the family. The government has set a target of May 1, 2018, for all villages to be electrified.

The stock market may have been unusually volatile as the FM unfolded his new vision for rural India, but a lot of voices from the market gave a thumbs up to the Budget. Ritesh Jain, CIO, Tata Asset Management, said that the Budget has a clear thrust for the rural economy while taxing urban and top-of-the-pyramid consumption.

"It carries the highest ever allocation to MGNREGA. Remember, MGNREGA expenditure had been coming down in the last 3 years adding to rural stress. Allocation to agriculture and allied sector has been increased but the subsidy route has been avoided (efficient spending) while the thrust is on job creation," he said.

Many believe that it is indeed a strategy shift by the government. The finance minister has allocated Rs 2.74 lakh crore to the social sector, besides infusing Rs 38,500 crore for MNREGA.

Health was also in the spotlight with allocation for the ministry for health and family welfare at Rs39,533 crore, from a revised estimate of Rs 34,957 crore in 2015-2016.

The government had faced much criticism last year for slashing the health budget by 20%. The FM announced three major developments -- a health insurance scheme for the poor that gives a coverage of Rs 1 lakh per family, with a top-up of Rs 30,000 for senior citizens, a National Dialysis Services Programme, based on a PPP model under the National Health Mission, 3,000 stores under Prime Minister's Jan Aushadhi Yojana to provide generic medicines.

Rural Thrust
Allocation for agriculture and farmers' welfare at Rs 35,984 crore
Total allocation for rural sector: Rs 87,765 crore.
Allocation for rural roads: Rs 19,000 crore.
Crop insurance allocation: Rs 5,500 crore.
100% village electrification by May 1, 2018.
Digital Literacy Mission Scheme for rural India to cover around 6 crore additional households in 3 years.