Budget 2019: Rural upliftment and farmer growth continues to be key to India’s growth

Harsha Razdan
The rural consumer’s untapped potential is quite evident, as India aspires to be a $5 trillion economy. Keeping this in mind, the budget has heavily focused on famer productivity, the aam aadmi and rural upliftment to drive consumption.

So here’s a quick outline of the budget presented today along with its implications
Rural Growth and Development:

The Budget continues to emphasise on rural upliftment by way of ensuring electrification, water and houses for rural India. Efforts on to increase the use of LED bulbs and solar stoves, coupled with water availability under the Jal Jeevan Mission will only help increase the quality of life. Further, under schemes such as Pradhan Mantri Awas Yojana – Gramin (PMAY-G), houses with basic amenities like toilets, electricity and LPG connections will be provided, thus uplifting the overall living conditions.

Further, there are focused efforts towards farmer development by way of helping farmers improve realisations on crop produce, promoting zero budget farming, and upgrading fishing and fishermen communities thorough various schemes.

Job creation and employment:

Job creation continues to be a priority for the government. A Scheme for the Promotion of Innovation, Rural Industry and Entrepreneurship’ (ASPIRE) contemplates to help develop 75,000 skilled entrepreneurs in the agro-rural industry sector.

Continued efforts towards ease of access to credit for MSMEs, coupled with an allocation of Rs 350 crore in FY19-20 towards interest subvention of 2 percent for all GST registered MSMEs, could help rekindle growth for these MSMEs. This is a key initiative as MSMEs also have the potential to generate significant job opportunities.

The reduction in the exemption for corporate tax (companies having annual turnover up to Rs 400 crore) could benefit several companies, thus stimulating growth, jobs and investments.

Digital India initiatives:

Under the Pradhan Mantri Gramin Digital Saksharta Abhiyan, over two crore rural Indians have so far been made digitally literate. Bharat-Net is targeting internet connectivity in local bodies in every Panchayat in the country.

The Budget has provided the impetus for digital modes of payment such as BHIM UPI, UPI-QR Code, Aadhaar Pay, certain debit cards, NEFT, RTGS etc.

FDI Investments:
Lastly, local sourcing norms eased for FDIs in single brand retail could also positively impact investments into India. In summary, the direction of the Budget seems to be strongly be in favour of rural growth and development. Robust implementation will be the key to ensure that benefits will be attained at the grass root level. Realising the $5 trillion dollar economy vision will need various elements mentioned in the budget such as – job creation, farmer productivity improvement, infrastructure development, etc. to come together harmoniously.

The author is Partner and Head, Consumer Markets, KPMG in India

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