Modi govt 2-yr report card: Late starter on the rural economy?

Rishma Kapurmoneycontrol.comIndia’s rural economy, partly dependent on agriculture, has been battered by two back-to-back droughts. Amid this, the Narendra Modi government has been accused by some of taking its eye off the accelerator when it comes to the rural economy.

Lately, though, the government machinery has sprung into action, having rolled out a number of steps to boost agriculture incomes, and to improve social conditions such as housing etc.

The genesis of the criticism against the NDA government’s rural policy comes from a view that it went easy on flagship UPA schemes such as MGNREGA and eased up minimum state price (MSP) increases.

That is not to say the government hasn’t taken any steps for rural India: over the course of the previous two Budgets, the government launched a number of schemes targeted at it. From Kissan Fasal Bima Yojana to Pradhan Mantri Gram Sadak Yojana and Old Age Pension Yojana to Mudra Yojana, the government has introduced a number of schemes to help alleviate the stress on the poor in the rural economy.

Further, it has also taken a number of structural steps that would rationalise subsidies, improve targeting and ensure efficient delivery of services, by rolling out the Jan Dhan Yojana-Aadhaar-Mobile (JAM) trinity.

In the current Budget, focus was on rural economy in wake of the drought situation. Finance Minister Arun Jaitley launched two mega schemes - Rurban Mission and Housing for All. In all, the spend on the rural economy stood at Rs 87,765 crore.

Hits: - The government has taken a number of steps that would boost the economy in a structural manner: JAM subsidies, more infrastructure spending via schemes such as Pradhan Mantri Gram Sadak Yojana and Housing for All. Negatives: - Impact of infrastructure scheme takes some years to show up and capital spending would not do much to alleviate stress in the short term.

-  The government has further been accused of doing only lip service to flagship UPA welfare schemes such as MGNREGA.