New Delhi: To bridge the rural-urban divide, budgetary allocation for all rural-focused schemes have increased by 45-144% in this budget.

This means a major rise in government spending for schemes such as National Rural Employment Guarantee Scheme (NREGS), Bharat Nirman, Rajiv Gandhi Grameen Vidyutikaran Yojana and Indira Awas Yojana. All this is to further stimulate demand in rural India, which has also been responsible for the perking up of many industrial sectors.

NREGS, widely regarded as UPA government’s winning card in the general elections, has got top priority with its allocation increasing to Rs 39,100 crore.

Finance minister Pranab Mukherjee said that to increase productivity of assets and resources under NREGS, convergence with other schemes relating to agriculture, forests, water resources, land resources and rural roads is being initiated.

In the first stage, 115 pilot districts have been selected for convergence.

Moreover, the Swarna Jayanti Gram Swarozgar Yojana has been restructured as the National Rural Livelihood Mission to make it universal in application, and achieve a time-bound poverty eradication target by 2014-15.

Two flagship schemes – National Rural Health Mission (NRHM) and Rajiv Gandhi Drinking Water Mission – have also been provided higher plan allocations, and work on the National Food Security Act has begun, which will directly benefit families living below poverty line in both rural and urban areas.

“I think the budget will help meet the social objective of the government. But there is nothing out of the ordinary. This was what was expected,” said Anwarul Hoda, former member of Planning Commission.

Budget for the aam aadmi

For the farmers, the short-term agriculture loans up to Rs 3 lakh, would be available at lower rates of 7%. As an incentive for those meeting the repayment deadline, the government has proposed an additional subsidy of 1%, effectively reducing the interest rate to 6%.

For rural labour, the government proposed to increase the minimum wages to Rs 100 a day under the NREGA.

The other major decision involved a convergence of the NREGA with other agriculture-related schemes in a bid to increase farm productivity, which had taken a hit in 2008-09.

Finance Minister Pranab Mukherjee not only raised the agriculture credit flow by 13.25%, from Rs 2.87 to Rs 3.25 lakh crore, but also extended additional interest subvention of 1% on short-term crop loans, aiming to tackle the economic slowdown and countering the adverse impact of the delayed monsoon.

The moves, it is hoped, will help regain the 4% growth rate in the sector. Rs 411 crore have been provided in the budget estimates to meet the subsidy burden.

In view of the late onset of the monsoon, the government extended the deadline to return 75% of over dues of farmers owning more than two hectares of land by six months, from June 30, 2009 to December 31, 2009.

Mukherjee announced his decision to set up a task force to suggest a way out for farmers in parts of Maharashtra, who had been caught in the trap of private moneylenders and could not benefit from the loan waiver scheme.

More funds for flagship programmes

The flagship programmes of the United Progressive Alliance (UPA) have seen an increased allocation in the Budget proposals for 2009-10.

The outlay for the ambitious Bharat Nirman programme of six schemes for the development of rural infrastructure is proposed to be stepped up by 45% in comparison to 2008-09.

This programme is an important initiative for bridging the gap between the rural and urban areas and improving the quality of life of people, particularly the poor in the rural areas, Finance Minister Pranab Mukherjee said in his speech in Parliament on Monday.

The allocation for the Pradhan Mantri Gram Sadak Yojana (PMGSY) is proposed to be increased to Rs 12,000 crore; that for the Rajiv Gandhi Grameen Viduytikaran Yojana (RGGVY) to Rs 7,000 crore; and for the Indira Awas Yojana (IAY) to Rs 8,800 crore.

The Minister also announced that a sum of Rs 2,000 crore is proposed to be allocated for the Rural Housing Fund in the National Housing Bank (NHB) from the shortfall in the priority sector lending of commercial banks. This will boost the resource base of the NHB for their re-finance operations in rural housing sector. The move will broaden the pace of rural housing.

The Minister also announced launching of a new scheme called the Pradhan Mantri Adarsh Gram Yojana for integrated development of 1,000 villages in which the population of Scheduled Castes is above 50%. There are 44,000 such villages in the country.

Over 60% Indian live on Rs 20 a day

Earlier the debate over poverty levels in the country found resonance in the Economic Survey with the report stating that 60.5% of the population was capable of spending only Rs 20 a day as per the latest National Sample Survey.

A wide range of poverty numbers have been floating around from different government agencies with the N.C. Saxena committee being the latest.

The Planning Commission's estimate has been the most conservative at 27.5% while the National Commission on Enterprises in the unorganised sector, in its report, had suggested that 77% of the total population in 2004-05 could spend less than Rs 20 a day per person.

The poverty figures are drawn on the basis of the minimal nutrition required per person for a healthy living and the ability to purchase the nutrition in terms of a food basket.

The debate got stronger with the UPA's ambitious Food Security Act on the anvil. The proposed scheme is meant to provide food grain at Rs 3 per kg to households below the poverty line.

The Economic Survey said poverty levels had gone down over the years of liberalisation but pointed out that malnutrition rates had been stuck at a serious level.

Agri sector records limp growth

The agriculture sector, which in previous economic surveys seemed to be pulling out of a bad patch, slipped back into a dismal 1.6% growth in 2008-09, the report said.

The worst performance came in the third quarter, which, on a year-on-year basis, showed a 0.8% decline.

The crimped gross capital formation in the primary sector along with the government falling short of its credit target to the agricultural and allied sector continued to show that beyond the debt-relief, UPA was yet to bring complete focus to the ailing system.

The trouble, the report showed, was brewing especially for the wheat crop with production showing a perceptible decline since 2000.

Gross capital formation in agriculture as a proportion to the GDP has shown a decline from 2.9% in 2001-02 to 2.5% in 2007-08, the Survey said. The overall foodgrain produce as a consequence fell short of the target for 2007-08 as well as 2008-09.

For the government, which is now contending with less than normal rainfall at best and the possibility of deficit rainfall, the figures will not bring any comfort.

While various senior government functionaries have been playing down any risk of the kharif crop getting hit this year, it would be hard to dismiss the chronic ailments of the sector as the Survey reports.

In absence of a robust PDS, the fall in coarse cereal production would also bring up the sceptre of local level food insecurity while putting the future of Food Security Act at risk.

While the Survey noted the dilemma of providing high minimum support price to farmers and the consequent rise in food prices, it also presented a contrary view that it was the robust agricultural sector backed by the money infused by NREGA that was keeping up demand in a flagging economy.

Shoddy infrastructure hampering health sector

Acute shortage of trained medical personnel and adequate health centres is hindering a steady improvement of India's health sector. According to the Survey, India is short by 28,000 health centres which includes 20,855 sub-centres, 4,833 primary health centres (PHCs) and 2,525 community health centres (CHCs).

Almost 34% of the existing health infrastructure is in rented buildings. Poor upkeep and maintenance and high absenteeism of manpower in rural areas are the main problems in the health delivery system in public sector, it said.

While there are 1.5 million nurses in the country, doctors in the modern system of medicine number just 84,852.

The Survey highlighted achievements of the National Rural Health Mission (NRHM). It said 6.49 health workers had been selected up to December 2008 to work under NRHM of which 5.63 lakh had already been given orientation training.

Around 4.12 lakh of these workers already have drug kits with them. Around 9,073 doctors, 1,875 specialists and 20,977 staff nurses had been appointed on contract in states. Around 243 Mobile Medical Units were operational in states.

Over 159.92 lakh women had been brought under the Janani Suraksha Yojana for institutional deliveries in the last three years.

The Survey said NRHM aims to make PHCs function round the clock. Of the 22,370 PHCs in the country, only 1,263 were working round the clock on March 31, 2005 (before the NRHM). The number of round the clock PHCs today, as reported by the states, was 7,212, signifying a big leap forward in getting patients to the government system.

Indian Public Health (IPH) standards had been finalised and a first grant of Rs 20 lakh had been provided to all district hospitals of the country to improve their basic services, the Survey said.

The Survey also highlighted achievements in AIDS control. It said the health ministry was providing life saving anti-retro viral treatment (ART) to more than 217,000 HIV patients.

As per the Survey, in the National AIDS Control Programme, major achievements during 2008-09 includes scaling up targeted intervention for high risk groups to 1,271, counseling and HIV testing 101 lakh persons of which 41.5 lakh were pregnant women.

The story has been collated from Economic Times, The Hindu and the Times of India.