Rural Economy in Indian Budget

The Rural Economy in Indian Budget finds the much-needed attention in the recent years, which was due over the last 10 years. With the astronomical growth of the Indian economy during the early 1990s, the focus of the Indian Government shifted from agriculture to industrialization. The growth of Indian agriculture suffered due to this shift of stance, since agriculture is still the backbone of Indian economy and more than 70% of its total population is engaged with agriculture (both directly and indirectly) for livelihood. During the mid 1990s, the manufacturing industry of India suffered negative growth. This was much due to the fact that the transition of Indian economy from an agriculture-based country to an industry-based country was not properly devised. Soon, the Government of India realized the importance of Rural Economy in Indian Budget and it got reflected in its economic policy.

The latest policy for the development Rural Economy in Indian Budget is as follows -

The corpus of the Rural Infrastructure Development Fund, to be raised to Rs.12, 000 crore from Rs.10, 000 crore. A separate window for rural roads will continue, with a corpus of Rs.4, 000 crore
An additional irrigation potential of 2,400,000 hectares to be created, including 900,000 hectares under the Accelerated Irrigation Benefit Programme
The National Agricultural Insurance Scheme of India to continue for the 2007-08, with an allocation of Rs.500 crore. A weather-based crop insurance scheme will be started
Rs.1, 800 crore has been allocated for a water recharging scheme that will offer a 100% subsidy to small Indian farmers and 50% to other farmers to encourage them to recharge water
An agreement with Andhra Pradesh has just concluded to cover 3,000 water bodies, covering an area of 250,000 hectares
A special plan is being implemented over a period of three years in 31 suicide-prone districts in four states, involving a total amount of Rs.16, 979 crore. Of this, around Rs.12, 400 crore will be spent on water-related schemes
To address the problem of poor availability and quality of certified seeds, the Integrated Oilseeds, Oilpalm, Pulses and Maize Development Programme will be expanded with sharper focus on scaling up the production of breeder, foundation and certified seeds
Government will fund the expansion of the Indian Institute of Pulses Research, Kanpur, and offer other producers to double production of certified seeds within a period of three years
The Indian Agriculture Technology Management Agency, now in place in 262 districts, will be extended to another 300 districts
The amount of fertilizer subsidy has been increased from Rs.17, 253 crore to Rs.22, 452 crore
The budget has also allotted Rs.12, 000 to the National Rural Employment Guarantee Scheme Amount of Rs.2, 800 crore has been allocated for the Sampoorna Gramin Rozgar Yojana. Allocation for promoting self -employment among the rural poor, has been increased from Rs.1, 200 crore to Rs.1, 800 crore
NABARD will issue government-guaranteed rural bonds to the extent of Rs 5,000 crore with suitable tax exemptions
A 31% hike in allocation towards the Bharat Nirman programme for upgrading rural infrastructure, from Rs.18, 696 crore to Rs.24, 603 crore, and a proposed Rs.225, 000 crore for farm credit
In December 2006, 53,370,000 new farmers were brought into the institutionalized credit system. The target for 2007-08 is set at Rs.225, 000 crore with an addition of 50,000,000 new farmers accessing credit
A Special Purpose Tea Fund to rejuvenate tea production. Financial mechanisms for re-plantation and rejuvenation will also be implemented for coffee, rubber, spice, cashew and coconut plantations