In February 2015, in Narendra Modi’s first full budget since taking power as Prime Minister of India in May 2014, Finance Minister Arun Jaitley announced a number of plans within the budget that aimed to boost the growth and economic development of India. Modi described the budget as “investment friendly but also pro-poor, pro-growth, pro-middle class, pro-youth and paradigm shifting.” He has constant ambitions to continue the betterment of his country, implementing schemes and initiatives to help promote its growth and prosperity.
Budget 2015 has a distinct focus on farmers, youth, poor, neo-middle class & the Aam Nagrik. It delivers on growth, equity & job creation.
— Narendra Modi (@narendramodi) February 28, 2015
It announced an increased investment into infrastructure by £7.32 billion, with plans to improve roads and railways and other projects to improve the growth of the country. More than twice the amount of money will be invested into roads and bridges during 2015-2016 than the previous year, meaning that infrastructure will even receive a greater amount of funding than education throughout the year. It also publicised several changes that would help less wealthy members of society, including a 25% reduction to corporate tax over the next four years, the abolition of wealth tax, a system whereby welfare money is paid directly into the bank accounts of its recipients and a scheme that would subsidise insurance and pensions for poorer Indians. At the same time, funding for a scheme which provides free food for poor children in India was halved, and cuts were made to initiatives which provided clean water in rural areas.
While the commitments of this budget have helped to improve the infrastructure across India and have helped towards boosting economic growth, other areas have suffered from not receiving adequate funding. Federal programmes intended to help farmers were not a priority to receive funding in the 2015-2016 budget. This came at a bad time as, this year, India suffered from their first back-to-back drought years for the first time in more than a century. It is held by many that not enough was done by the Government to help support farmers through these hardships, and many farms and farmers suffered greatly throughout the droughts. The consequences of this were felt by Modi and his Government in last month’s state elections, when they suffered defeat in Bihar; a largely rural state and the 13th largest in the country. This defeat was felt by Modi, and he plans on redressing this imbalance between infrastructure and agriculture in next year’s budget to help farmers and others living in rural areas to recover, and prepare them for any future incidences of droughts in India.
This month it has been revealed that next year’s union budget 2016 – 2017 , which will take place in February 2016, will focus more on social initiatives than the previous year. Government spending on infrastructure will be capped. They have already committed much of the budget to increasing Government salaries and military pensions, and helping out banks who are suffering from bad loans, but the most recent shift has promised that the remaining budget will focus on the social sector and helping farmers and those living in rural areas. Modi is obviously concerned with looking after his people in all areas of India, and with three fifths of voters living in rural areas, it is also in his best interests to take care of these people, especially leading up to the upcoming state elections.
One social initiative that will be prioritised in 2016, it has been announced, is a new, updated version of the national crop insurance scheme. Out of India’s 263 million farmers, currently only 10% of them are covered, approximately. This is because most farmers across the country are unable to afford the premiums on crop insurance, which are often based on the crop yields of richer farmers who use higher quality products and equipment in their farming practice. With this new crop insurance scheme, it has been proposed that the premiums paid by each farmer will be partially linked to how much they are able to pay, so that farmers with lower crop yields who are gaining less capital from their farming won’t have to pay a disproportionate amount. These lower premiums will attract more farmers to purchase crop insurance, meaning they are protected if drought conditions do reoccur. An aide of Modi stated that “The prime minister is constantly trying to find new schemes and formulate policies to help the villagers,” so hopefully this scheme will benefit farmers and those living in rural areas in the upcoming years.
As the budget will reportedly focus greatly on the social sector and initiatives supporting this, assumedly more initiatives will be revealed leading up to the budget in February of next year. Modi’s ambitions for his country are vast and varied, and the social sector is obviously his next target to support, hoping to aid developments and improvements to the quality of life and the economy in India.0