Over the past few years, the government had undertaken a series of transformational reforms that not only impacted the economy but also had a lasting impression on the mindset of people. Some of the structural reforms include introduction of GST, the bankruptcy code, and demonetisation.
Some other reforms such as Niti Aayog Digital India and Jan Dhan Yojna, MUDRA yojna, Make in India, PM Jeevan Beema Yojna, Suraksha Beema Yojna, Fasal Bima Yojna, Atal Pension Yojna, Garib kalyan yojna, Udaan Scheme and Swachh BharatBSE -1.82 % Abhiyaan, Skill India, Beti Bachao Beti Padhao, Smart city mission, National Sports Talent Search Scheme are expected to show positive meaningful impact in the medium to long term.
These transformational reforms contributed to India sustaining an average growth rate of 7.3% over the past four years.
However, some of these transformational and structural reforms such as demonetisation and GST also led to short-term pain in the rural and MSME sector and a consequent slowdown in the pace of growth of our economy. Income levels dropped in the rural economy, and consumption was affected.
It was thus important in this budget for the government to boost the rural / Agri economy and ensure that the country was on track to achieve an 8% growth on a sustainable basis.
Towards this, we saw the government targeting the four engines of economy for pump priming in this Budget. The first pillar was to boost consumption. The
Budget gave a fillip to the MSME sector by announcing several important measures such as credit support, capital and interest subsidy. The proposal of the government is to bring together the PSBs and Corporate on the Trade Electronic Discounting System (TReDS) that will provide easier access to credit to the MSME. The Gramin Agricultrual Market (GrAMs) shall be linked to the electronic National Agricultural Market (e-NAM) for enabling direct sale by the farmers, ensuring better realization for their produce. The revision to refinancing norms under the MUDRA Yojna to the NBFCs, that are the big lenders to the MSMES, shall further improve availability of credit to the MSMEs. All of these measures will lead to a big boost to farm income, thereby increasing rural consumption. Further, improving road connectivity will ensure faster and more efficient delivery of farm produce. By setting up 42 mega food parks and commercially viable farm producer companies with tax incentives, promoting cluster organic farming, horticulture, animal husbandry, fisheries, all MSME and rural sectors are getting a targeted push, which will eventually lead to revival of the rural jobs and employment in MSMEs. Also, fixing the MSP of crops at 1.5x cost of produce is also in line with the vision of our Prime Minister Shri Narendra Modi to double the farm income by 2022.
Source: economictimes.indiatimes.com