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The budget has enhanced allocation for the UPA government’s flagship Bharat Nirman scheme by
Rs10,000 crore to Rs58,000 crore
Ruhi Tewari
New Delhi: Rural infrastructure and farmers got a boost in Budget 2011,
with the government introducing significant fiscal measures aimed at fuelling
consumption in villages.
To develop rural infrastructure, the budget has enhanced allocation for the
government’s flagship Bharat Nirman scheme by Rs10,000 crore to
Rs58,000 crore.
The government has also increased the corpus of the rural infrastructure
development fund—an instrument for routing bank funds for financing rural
infrastructure—to Rs18,000 crore from Rs16,000 crore in 2010-11.
In addition, the budget has outlined a plan to provide rural broadband
connectivity to all 250,000 village panchayats in three years.
“There has been a great push for rural consumption and related issues in
this budget,” said Anirban Roy, founder and executive director of Seed
Financial Services, a business correspondent, which is a bank-appointed firm
to provide financial services in unbanked areas.
“The finance minister’s putting out the Swabhiman campaign (which brings
banking services to rural areas) and other such measures will give a huge
boost to rural demand,” Roy said.
The budget’s thrust on villages “will not only spur rural demand but also
create the right ecosystem to sustain the growth... The Indian growth story
which started in the urban areas is now shifting to rural India,” he added.
The budget has increased the central Plan outlay for agriculture and allied
activities by 2.6% to Rs14,744 crore.
“The budget is proactive for the rural sector and will allow the flow of growth
there to continue. For instance, enhancement in allocation to Bharat Nirman
will promote infrastructure development which will impact wages and
demand,” said Keerti Misra, partner at MART, a rural marketing consultancy.
But for the Mahatma Gandhi National Rural Employment Guarantee Scheme
(MGNREGS), which assures 100 days of work in a year to one member of
each rural household, the budget has slightly reduced allocation to Rs40,000
crore from Rs40,100 crore.
“The fact that allocation to (MG)NREGA has not been increased is not really
an issue,” said Misra. “One really has to see how much of the amount
allocated to the scheme in 2010-11 has actually been used. Since minimum
wages have been enhanced, it will continue to boost rural demand.”
ruhi.t@livemint.com