The Indian government is preparing a strategy to focus on infrastructure, agriculture and restore the health of the banking system as well as specific measures to ease stress in the rural economy when it unveils the 2016-17 budget in February-end. As per the preliminary blueprint that has emerged during the budget discussions, the government wants to focus on these crucial areas to accelerate growth and tackle growing unease in the farm economy. A senior official said, “There will be more attention to irrigation and agriculture. We are working out the numbers. We will have to address the problems in the rural economy which has borne the brunt of two consecutive droughts,” adding, “This is a very crucial budget for the government.”
He also mentioned that the infrastructure sector will see greater attention as the government is keen to step up investment despite a challenging fiscal situation. The government has allocated £530 million to support micro-irrigation, watershed development and the Pradhan Mantri Krishi Sinchai Yojana and has urged the states to chip in substantially in this vital sector. Finance Minister Arun Jaitley has already signalled government support by backing calls for raising investment in the crucial farm sector and leveraging technology to accelerate growth. The official said, “There have been demands that micro-irrigation be given infrastructure lending status. We are looking at several options to step up irrigation,” adding that reviving the farm sector was a top priority for the government. The farm sector growth slowed to 2.2% in the September quarter compared to 2.1% expansion in the same year-ago period.
The next focus area would be infrastructure where investment in 2015-16 was estimated to have gone up by £7 billion in the year, including funds from the centre and state-run undertakings highways and roads have proved to be a success area and in the absence of private investment, indications are the sector will receive special attention, including unveiling of some innovative financing schemes.
