Budget 2020 – A detailed Analysis – Part III

 Budget Allocation 2020 – Agriculture Sector

The Union Budget 2020-21 was presented by Finance Minister Nirmala Sitharaman in the Lok Sabha on February 1, 2020. It covered all domains and allocated funds to governmental activities. However, Agriculture was given importance. With 44% employment percentage and 14% GDP, agriculture in India is surely a big thing. It is the backbone of India’s economy. The government has allocated 2.83 lakh crore rupees for agriculture and allied activities, irrigation and rural development in 2020-21 budgets. This budget plan aims to develop agriculture and farmers by a 16-Action point formula. Agriculture has been in stress for years, despite successive governments committing to revive the sector that supports the livelihood of most of India’s population. It is a sad thing to note that agriculture contributes to only 16% of Gross Value Added.

Credits: Charis Journal

The Government has introduced many strategies to improve the standards of farmers and agriculture in India. Nirmala Sitharaman has made sure that this budget will improve the livelihood of farmers and revive the declining phase of agriculture in India. She has designed this budget proposal considering that it will improve the livelihood of farmers twice in the next two years. She also announced that the Center will encourage States to follow and abide by modern agricultural laws including the Land Leasing Act of 2016. Also, it was pleasing to hear her words proclaiming to improve the quality of agriculture in 100 water-stressed districts.

She also stated that farm markets needs to be liberalized. She also wants farming to be made more competitive and proper guidelines should be given to farmers based on farm holding activities.  She also claimed that the lack of efficient market connectivity has made life miserable for farmers. She also urged that there needs to be developments in sustainable cropping patterns in agriculture. Also, technology needs to be improved from the government’s side to improve the performance marketing of agri-based products.

The Union Budget 2020 focuses on improving farmers and their challenges. It also addresses the challenges of farming faced by modern-day farmers. It is also stated that the government will help at least 20 lakh farmers for setting up modern-day advanced standalone solar pumps. Also, the budget clearly states that another 15 lakh farmers would be made to set up solar irrigation facilities. Thus, making it one step closer for farmers to integrate with modern-day technologies and develop good agricultural products. Also, adequate plans and strategies have been developed to facilitate farmers with silos and barren lands. These lands will be made to set up solar power units that can be sold through grids.

Credits: Business Society

The solar power grid idea for barren and sterile lands makes it possible for farmers to set up solar power plants. This will enable farmers to generate power on their own and sell it to power grids. The Finance Minister hopes to bring this idea into action by 2022 to double farmer’s income. This mission is taken under PM Kusum Scheme, which is already in action. Also, a happy one for farmers as the previous ideas like zero-budget farming is accepted even in this budget. This means that the government will continue to support this scheme proposed in the previous budget.

To improve the connectivity of farm products and goods, the Central government has taken an initiative to connect agriculture with railways. It is mentioned that Kisan Rail will be set up through Public-Private partnership to facilitate the effective transportation of food products. Sitharaman said that railways will join hands with the agriculture department to connect farms with markets. Railways will introduce a Kisan Express and the Ministry of Aviation will launch Krishi Udaan to help farmers transport perishable goods quickly. She also added that the railways will build a cold supply chain for perishable goods like milk, meat, and fish by setting up timely train services for the purpose. Also, higher levels of farm mechanization help to improve agricultural productivity. This can also help you to be cost-effective in each step of farming.

With the Nirmala Sitharaman supporting the statement “Gaon-Garib-Kisan” (Village-Poor-Farmer) as the cornerstone of development and policymaking, the upcoming budget may see increased attention on the agriculture sector with a two-dimensional approach to policy reforms and other technical interventions. This budget will surely make sure that it concentrates more on farmer welfare and structural scientific reforms. The prime aim of this project is to double the livelihood of farmers with adequate backing up of modern-day technologies. Thus, this way there could be an increase in efficiency, productivity, and quality of food articles being manufactured on the farm.

Budget 2020 – Finance

Finance is the major source of income for the country. Without a proper and well-built financial structure, the country cannot survive changes in the economy. To stabilise the finance and banking sector, the budget 2020 has made a few plans and schemes. This will help steer the country to a better future in terms of money.

The first announcement in the financial sector during the budget 2020, was the amalgamation of 10 banks to 4. From this Rs.350000 crore capital was infused. Apart from this newer reforms are to be brought in the field of banking. The ultimate target is to make things simple, transparent and professional in the banking sector.

Deposit Insurance and Credit Guarantee Corporation has been granted with permission to increase the deposit insurance coverage to up to 5 lakhs per depositor. This amount was initially only one lakh per depositor.

Credits: Picepedia

Cooperative banks to be strengthened by amending banking regulation act. This will help the cooperate banks reach the next level, by increasing the level of professionalism and providing access to capital. also, there are measures taken to improve the governance of these banks for improved banking efficiency.

The eligibility for NBFC’s debt recovery was reduced from Rs.500 crore to Rs.100 crore in terms of asset size. In terms of loan size, the amount was reduced from Rs.1 crore to Rs.50 lakhs. The next major reform is private capital in the banking system. Government to give away its balance holdings in IDBI bank to private, retail and institutional investors through the sale of market. Jobs to be made more mobile in future. To improve this, auto-enrolment in Universal Pension coverage and inter-Operability mechanism to safeguard accumulated corpus have been introduced.

To further show improvement for the MSMEs, finance reforms have been made in their sector as well. This includes debt restructuring by RBI that was extended by one year. This has benefitted over five lakh MSMEs currently. Further, to simplify the process of getting loans by MSMEs, an app-based system has been initiated. This will make sure the progress of cash Flow is proper and the problem of delayed payments is eradicated. Further to improve the market size of MSMEs, selected sectors such as pharmaceuticals, automobiles and other sectors have been given facilitations for export.

To deepen the bond in the market, certain government regulations to be relaxed for fully non-resident investors as well. This will increase the number of investors in the Indian market. New legislations were laid down for the netting of financial contracts.

Credits: Stump blog

In terms of infrastructure financing Rs.103 lakh crore, national Infrastructure pipeline projects were announced. Apart from this Rs.22,000 crore was allocated to cater to the needs of equity support in infrastructure finance companies such as IIFCL. GST compensation fund to be transferred in one or two instalments. Revised estimates of expenditure for the year 2019-2020 is Rs.26.99 crore. Whereas the revised estimates of receipts for the year 2019-2020 was estimated at Rs.19.32 lakh crore.

Predictions in budgets play an important role in determining the success of a financial year. Every year there is an estimated GDP. The year 2020 budget estimated a 10 per cent nominal growth of GDP in the following financial year. the receipts were estimated at Rs.22.46 lakh crore whereas the expenditures estimated at Rs.30.42 Lakh crore.

There are several new measures adopted under this budget to improve foreign investment in India. This might boost the country’s economy and also increase the level of GDP. however, this would take time. And the level of rising is still unpredictable. Hence the estimates in receipt and GDP growth cannot be taken for sure.

In the year 2020 – 2021 a part of the borrowings is to be directed towards the capital expenditure. This capital expenditure has been scaled up by more than 21 percent.

The sponsored schemes have been worked to align them with the emerging social and economic needs. Steps have also been taken to ensure that scarce resources are spent in a proper direction. Thus the financial sectors are expected to be revolutionized under the stated plans according to the budget 2020.

Union Budget 2020- Caring Society

The caring society scheme mainly focuses on improving the weaker sections in the society. The funds allocated under this scheme is mainly to improve equality in society by supporting the weaker community. Here are a few schemes under this.

To work on providing good healthy and nutritious food to all people, funds have been allocated in the budget. A total of Rs.35,600 crore is specially allocated to work on providing the best nutrition-rich food to the children and pregnant women. Funding of Rs.28,600 crore is allocated for women-specific programs. All these programs are mainly done to improve the lives of women. Women in India who usually happen to be housewives are believed to be improved under these projects, by providing them skills and suitable jobs.

The next big issue in India is girl child marriage and early pregnancy. The age at which a girl enters motherhood is to be regulated under this scheme. Campaigns on educating girl children and avoiding child marriage are believed to create a positive impact on society.

Credits: The Indian Express

Apart from these schemes to adopt better technologies for the future has been proposed. For example, no more manual cleaning of sewers is one such scheme by theMinistry of Housing and Urban Affairs. This will improve the lives of these cleaners by providing them with a better job.

To improve the lives of people belonging to lower castes in the society, total funding of Rs.85,000 crore has been allocated under this budget. This amount is directed totally towards the development of scheduled caste and other backward communities in society. For the welfare of the scheduled tribe community, Rs.53,700 crore has been exclusively funded by the government. The next weaker section in the society is the retired and non-working senior citizens. To enhance their lives, total funding of Rs.9,500 crores is allotted under the budget 2020 scheme.

In total all these schemes have been implemented mainly to uplift the weaker sections in the society.

In the field of culture and tourism, there are also several new implementations. Tourism is one of the highest income providing sectors for any country. And it is true in India’s case as well. With its rich heritage and cultural diversity, India is one major tourist destination.

To promote tourism in the country, a total funding amount of Rs.2500 crore has been allotted by the budget 2020. Apart from this, to improve the cultural diversity, the ministry of culture has been allocated with total funding of Rs.3150 crores. To encourage the number of people taking up tourists guides as a profession, the Indian Institute of Heritage and Conservation has been given the status of a deemed University. This will encourage young candidates to take up this course to make it a profession.

Credits: Portal Watch

Other achievements declared during the budget sessions include the development of iconic archaeological sites with museums on-site. The archaeological sites choose for this includes, Rakhigarhi in Haryana, Hastinapur from Uttar Pradesh, Shivsagar in Assam, Dholavira in Gujarat and Adichanallur from Tamil Nadu. In context with museums, Re-curation process to be initiated in the Indian museum at Kolkatta. The budget had also declared to work on initiating new museums in the country. Including one exclusively for numismatics, in the historic old Mint building at Kolkatta. The other museums include Tribal museum in Ranchi, Maritime museum, close to the Ministry of Shipping at Lothal.

Also to improve the number of tourist in the country and facilitate their travelling, state governments to create new route maps. This will help the tourist access tourist destinations with ease.

In the current years, with an increase in the global temperature, India is also playing a role in reducing the effect of climate change. Under the budget 2020, Rs.4400 crore has been allotted exclusively for this purpose. The cities with over a million population to work on reducing pollution and creating a better environment for people. This is in parallel with the smart city plans. The old thermal plants in function are to shut, and carbon emission to fall under norms. All this will help mitigate the effects of climate change to a certain extent.