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Renewing India

               By Kumar Mangalam Birla, Aditya Birla Group

               What made Finance Minister Arun                to production costs. MSPs will be fixed at
               Jaitley’s budget stand out is its strong       1.5 times production costs, a move that
               focus on rural markets and the farm            should make life better for Indian
               sector. Although there are no major            farmers who suffer annually through
               offerings for industry or the service          unpredictable weather conditions and
               sector, the Budget announced measures          volatile market cycles. The Minister’s
               that will boost long term sustainable          statement that farm incomes should
               growth by focusing on improving the            double by 2022 is a bright ray of
               health of the farm and rural sector.           sunshine that will hopefully be followed
               Undoubtedly these measures will bring          by other much-needed reforms in the
               about a positive economic impact by            farm sector.
               triggering greater rural consumption.
                                                              The second trend in the 2018 Budget was
               Another clear trend is the emphasis on         a slew of social upliftment-related
               social development initiatives. It is          measures focused on quality of life. About
               heartening that the government intends         eight crore women will get free gas
               to work towards improving India’s              connections, enabling them to move away
               quality-of-life metrics by investing much-     from wood-based cooking and poor air
               needed funds in the rural and social           conditions. Housing for all by 2022 is
               sectors. The theme for 2018 is obvious –       another social target of the current
               it’s inclusive growth, or to put it simply,    administration. A National Health
               Making India Better.                           Protection scheme is included that will
                                                              cover 10 crore deserving families.
               The focus on the farm sector is a strong
               indicator of this vision. The agriculture      Education came under the government
               sector contributes only about 17% of the       scanner with the move to transition more
               GDP, far below the value contribution of       of India’s classrooms away from
               the industrial (~29%) and services             blackboard-and-chalk towards digital
               (~54%) sectors. Yet the farm sector is         literacy. The Minister also announced
               responsible for the livelihoods of over        funds for skilling India’s youth – all
               half of India’s workforce, and is certainly    measures to improve living conditions for
               entitled to greater state support.             India’s underprivileged.

               The Budget is an indicator that the            However, the Budget is not completely
               government hopes to reduce market              socialist. To strengthen India’s capability
               challenges and alleviate livelihood            to hold its own in the rapidly changing
               conditions in India’s agricultural             global marketplace, the government
               economy. The Rs.11 lakh crore agri-credit      reaffirmed its focus on digital initiatives -
               announced will go a long way towards           - for instance, the move to shift from cash
               this. Instead of the conventional route of     to e-payments at toll booths and the
               farm subsidies, the government has             national programme to raise India’s
               delivered more sensible relief via             capabilities in artificial intelligence. Plans
               minimum support pricing (MSP) linked           to connect 250,000 villages to the digital
                                                              world via optical fibre network and 5
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