The Gist of Kurukshetra: July 2013

The Gist of Kurukshetra: July 2013


  • Food Security
  • Drinking Water
  • National Livestok Mission
  • National Food Security Mission
  • Swabhimaan-A Significant Beginning
  • First Ever Hackathon by the Planning Commission on the 12th Plan
  • UNWTO Conference on Sustainable Tourism Development to be Held at
    Hyderabad from 12th to 14th April

Allocation for Inclusive Growth

The recently released pre-Budget  Economic Survey
(2012-13) has predicted Gross Domestic Product (GDP) growth of 6.1 per cent to
6.7 per cent during the next fiscal 2013-14. This is 1.1 to 1.7 percentage
points higher than this year’s estimated GDP growth rate of 5 per cent. The
Survey, while reflecting the impact of the global economic disturbances on
Indian economy, expressed its optimism regarding the recovery of the world
economy during 2013-14. Accordingly, the Survey outlined a slew of prudent
economic measures with a view to improve the outlook of the country’s economy
during 2013-14.

In the backdrop of uncertainties in the global economic
environment, the inflationary pressure in India, prevailing weaknesses in the
industrial activity, rising fiscal deficits, growing cost of credit along with
weak domestic business environment and lack of robust policies to contain
constraints in the smooth investment flow into the country, it was expected that
Budget 2012-13 would strive to ensure the 12th Five Year Plan (2012-17)
objective of an all-inclusive growth and to bridge the development deficits in
the social sector. In doing so, it was expected that the Budget would not only
step up public expenditure on the social sector schemes/programmes, but also
ensure the quality of expenditure backed by revamped governance system at the
grass-root level of implementation.

The Union Budget 2013-14 was presented amidst expectations of
giving a boost to the agriculture, rural infrastructure and rural non-farm
activities, thereby reviving job opportunities in the rural areas in addition to
laying down a road map towards effective management of food economy. Budget
2013-14 has expectedly continued its stress on the common man and rural India,
taking steps for consolidating efforts on rural development, employment, food
security, education, health and housing. Some of the important issues concerning
social and physical infrastructure in the rural areas have been analysed below.

Rural Employment, Housing and Roads and Bridges

The 2013-14 plan outlay for rural employment, housing, roads
and bridges (Table 3) indicates that allocations to rural employment have not
increased. While the outlay towards housing marked 21.7 per cent enhancement in
allocation over 2012-13, there was a mere 3.2 per cent increment in the plan
allocation for roads and bridges in 2013-14 over 2012-13. This indicates the
government’s continued and prioritised focus of expenditure in vital social
sector components like employment, housing and road and bridges during 2013-14.

The 2013-14 plan allocation for Mahatma Gandhi National Rural
Employment Act (MGNREGA) has been kept unchanged whereas Aajeevika (earlier
National Rural Livelihood Mission) has registered a mere 2.7 per cent hike in
its budget allocation in 2013-14 against the Budget Estimates of 2012-13. The
rural housing was allocated Rs. 13,665.6 cr. in 2013-14 against Rs. 9,966 cr. in
2012-13, thereby registering a hefty 37.12 per cent hike.

The enactment and implementation of a right-based MGNREGA has
undoubtedly marked a paradigm shift from the existing wage employment programmes.
This is primarily to be achieved by taking up project-oriented activities
covering works on water conservation/harvesting, drought/flood control,
plantation, land development, rural connectivity, etc. During 2012-13, the
revised estimate for MGNREGA is pegged at Rs. 29,387 cr. which is Rs. 3,613 cr.
less than the B.E. of the year. This indicates that this wage employment
programme has stabilized in its operation and absorption in rural areas. The B.E.
for 2013-14 in case of MGNREGA is kept at Rs. 33,000 cr. The need of the hour is
to improve quality of assets created and to bring about synergy between MGNREGA
and agriculture and allied rural livelihoods. This endeavour will not only
uplift the under-privileged and socially and economically vulnerable, but also
support in making the agriculture a viable occupation.

Food Security

The Budget has kept a provision of Rs. 10,000 cr. to share
the monetary burden of implementing National Food Security Act after its
acceptance in the Parliament the next fiscal. While this is a laudable step
taken by the Government in ensuring food security to the poor, it is expected
that to fulfill the intended objective of access to food at affordable prices,
the government could look into the issues of pilferage in the supply of
foodgrain, inefficient food management, high transport cost, quality of the
food-grains supplied to the beneficiaries, etc. in the proposed law.

Surplus Central Schemes

The Five Year Plans” focus on creation of Social and economic
infrastructure for rapid and inclusive growth has led to a significant increase
in Plan expenditure though a plethora of centrally sponsored schemes. The
Central Ministries/Departments monitor Centrally Sponsored Plan Schemes in the
respective subject areas. This exercise starts with releasing funds to the State
Governments. Many schemes/Programmes are in operation for long and a few are
added to the existing pool of schemes each year. A large amount of investments
are made on this without adequate evaluation on the impact of these schemes/programmes
on the beneficiaries. Considering the significance of reduction in the number of
centrally sponsored schemes, the Budget has announced to restrict the existing
173 such schemes to 70 during 2013-14.

The controlling Union ministries/Departments should not only
confine to their role of provision of budget and release of the funds to the
state governments but also to effectively monitor the utilisation of the funds
released earlier in accordance with the guidelines and capacity of the
respective state governments to actually spend the balance from the previous
years and releases during the current year. This will not only put a check on
the leakages of funds but will also help us in mapping the appropriate financial
absorption capacity of the States under each of the schemes/programmes.

The Budget has reflected the prioritized social sector
development agenda of the government and attempted to address issues related to
inclusion without compromising the reform processes unveiled in the recent past.
The budget has also announced review of schemes once in two years which is a
much desired and welcomed step. Continuous review and evaluation of all
centrally sponsored economic ‘and social welfare schemes would not only ensure
quality governance of the welfare interventions through convergence of all
resources at ground zero but also would lead the government in matching the
outlays with the intended outcome.

Allocation for Rural Development could have been Larger if Past Funds were
spent in Full

Mahatma Gandhi’s words that India lives in its villages rings
true even today. The majority of its 1.2 billion people still live in villages
and have agriculture as their means of livelihood. Any plan for the country
cannot but have its particular focus on the development of the vast rural areas
and the people inhibiting them. Successive budgets have taken care of the rural
region by allocating liberal funds to improve the lot of the rural population.

As expected, the rural development has been given its deserving priority in the
union budget .2013-14 presented by finance minister P Chidambaram on February

However, the allocation of funds could have been much larger
in real terms had the rural development ministry had been able to spend the
allocated funds in the last budget substantially, if not fully before the budget
presentation. The rural development ministry, which carries out many of the
government’s pro-poor programmes, received a 46 per cent hike in its allocation.
The budget has proposed to allocate to the ministry Rs. 80, 194 crore in

The rural development ministry has failed to spend the
allocated funds on schemes like rural roads and rural housing. The rural
development minister, Mr. Jairam Ramesh, who has displayed passion and devotion
in his work, has owned up responsibility. “It is a reality. Rs. 75,000 crore
were allocated and we could only spend Rs. 55,000 crore. There is collective
responsibility but I cannot pass in the responsibility to states. As minister, I
have to be held accountable,” he said post budget. He attributed the low
absorption of funds to “serious administrative weaknesses” in the poor states
and complicated financial procedures at the Centre that delayed fund release.
“Both are important: I am not running away from the responsibility.

Drinking Water

The allocation for drinking water and sanitation will be Rs. 15, 260 crore.

The finance minister also proposed to provided Rs. 1,400 crore towards
setting up of water purification plants as there are still 2,000 arsenicand
12,000 fluoride-affected rural habitations in the country.


The Jawaharlal Nehru National Urban Renewal Mission (JNNURM)
is being continued in the 12th Plan. The 14,000 buses sanctioned during to 2012
have made a big contribution to urban transport. The budget proposes to provide
Rs. 14,873 Bringing the green revolution to eastern India crore for JNNURM, as
against the RE of Rs. 7,383 has been a remarkable success. Assam, Bihar, crore
in the current year. Out of this, a significant Chhattisgarh and West Bengal
have increased portion will be used to support the purchase of up to Rs. 10,000
buses, especially by the hill States.

Green Revolution

The original Green Revolution States face the problem of
stagnating yields and over-exploitation of water resources. The answer lies in
crop diversification. I propose to allocate Rs. 500 crore to start a programme
of crop diversification that would promote technological innovation and
encourage farmers to choose crop alternatives.

The Rashtriya Krishi Vikas Yojana is intended to mobilise
higher investment in agriculture and the National Food Security Mission is
intended to bridge yield gaps. The budget proposes to provide Rs. 9, 954 crore
and Rs. 2, 250 crore, respectively, for these two programmes.

Small and marginal farmers are vulnerable everywhere, and
especially so in drought prone and ecologically-stressed regions. Watershed
management is crucial to improve productivity of land and water use. The budget
proposes to increase the allocation for the integrated watershed programme from
RS.3 050 crore in 2012-13 (BE) to Rs.5, 387 crore.

National Livestok Mission

The National Livestock Mission will be launched in 2013–14 to attract
investment and to enhance productivity, taking into account local agro-climatic
conditions. The budget proposes to provide Rs. 307 crore for the Mission. There
will be a sub Mission for increasing the availability of feed and fodder.

Rashtriya Krishi Vikash Yojana

The Rashtriya Krishi Vikas Yojana (RKVY) was launched in
2007-8 with an outlay of Rs. 25,000 crore in the Eleventh Plan for incentivizing
states to enhance public investment. States were provided Rs 22,408.79 crore
under the RKVY during Eleventh Five Year Plan. The RKVY format permits taking up
national priorities as sub-schemes, allowing the states flexibility in project
selection and implementation. Allocation under the RKVY for 2012-13 is Rs 9,217
crore. The RKVY links 50 per cent of central assistance to those states that
have stepped up the percentage of state plan expenditure on the agriculture and
allied sector. A total of 5,768 projects were taken up by states in the Eleventh
Plan of which 3,343 had been completed till December end 2012. The Rashtriya
Krishi Vikas Yojana is intended to mobilise higher investment in agriculture and
for this programme the Finance Minister proposed to provide Rs 9,954 crore in
the union budget of 2013-14. )

National Food Security Mission

Go enhance the production of rice, wheat, and pulses by 10,
8, and 2 million tonnes respectively by the end of the Eleventh Plan through
area expansion and productivity enhancement; restoring soil fertility and
productivity; creating employment opportunities; and enhancing farm-level
economy to restore the confidence of farmers of targeted districts, a centrally
sponsored National Food Security Mission (NFSM) was launched in 2007-8 with
three major components, viz. NFSM-Rice, NFSM-Wheat, and NFSM-Pulses. During the
Eleventh Five Year Plan, NFSM-Rice was implemented in 144 districts of 16
states, NFSM-Wheat in 142 districts of 9 states and NFSM-Pulses in 468 districts
of 16 states. In 2012-13, six north-eastern states, viz. Arunachal Pradesh,
Manipur, Meghalaya, Mizoram, Nagaland, and Sikkim were included under NFSM-Rice
and the hill states of Himachal Pradesh, and Uttarakhand under NFSM-Rice and
Wheat and J & K under NFSM-wheat. Specifically, during2012-13 a Special Plan to
achieve 19+ million tonnes of pulses production during kharif 2012 was launched
with a total allocation of Rs 153.5 crore comprising Rs 107.3 crore for
activities to be undertaken under the NFSM and Rs 46.2 crore for activities to
be undertaken under the Micro Irrigation Scheme. During 2012-13, Rs. 87.0 crore
has been allocated for additional area coverage of pulses during rabi/summer
2012-13. Taking into account the significance of the NFSM, Finance Minister
proposed to provide Rs 2,250 crore for this programme in the union budget of
2013-14, which will a further step forward to achieve the national food

Union Budget 2013 – 14: Major Ingredients for Rural Growth at a Glance

  • Rs. 80, 194 crore allocation for Ministry of Rural Development in
  • Rs. 33,000 crore for MGNREGA
  • Drinking water and sanitation receives Rs. 15,260 crore; Rs. 1,400 crore
    has been allocated towards setting up of water purification plants as there
    are still 2,000 arsenic – and 12,000 fluoride-affected rural habitations in
    the country.
  • The target for farm credit for 2013-14 has been set at Rs. 7,00,000
    crore against Rs. 5,75,000 crore during the current year
  • Eastern Indian states to get Rs. 1,000 crore allocation for improving
    agriculture production
  • Rs. 500 crore earmarked for programme on crop diversification
  • Rs. 10,000 crore allotted for National Food Security towards the
    incremental cost
  • Integrated Child Development Services (ICDS) Scheme gets Rs. 17,700
    crore which is 11.7 percent more than the current year
  • Rs. 27,049 crore allocation to the Agriculture Ministry in 2013-14
  • Rs. 5,000 crore for National Bank for Agriculture and Rural Development
    (NABARD) for agricultural storage facilities; Godowns to be constructed
    coordinating with the Gram panchayts
  • Rs. 10,000 crore earmarked for National Food Security towards
    incremental cost
  • The UPA government’s ambitious project ‘National Urban Health Mission’
    focusing on providing basic health care services to the urban poor has been
    grouped with the National Rural Health Mission under one umbrella named as
    the ‘New National Health Mission’. The budgetary allocation under this
    mission has been fixed at Rupees 21,239 crore, which is an increase of 24.3
    percent over the revised expenditure.
  • An Institute for agriculture biotechnology will be set up in Ranchi,

Union Budget Focuses on Agriculture to Boost Pan India Green Revolution

Agriculture has the responsibility to feed 1,200 million
people to feed, which is a huge responsibility. The farm sector achieved 3.6 per
cent growth during the 11th Five Year Plan (2007-12) which was much higher than
growth of 2.5 and 2.4 per cent during 9th and 10th Plans. Food grains production
in India has shown remarkable improvement in recent years. The production of
food grains in 2011-12 was at a record high of 259.32 million tones. In the
global slowdown of economy and downturn in overall exports, agriculture and
allied products during 2011-12 accounted for 9.08 per cent of India’s total
exports against 6.9 per cent during 2010-11. India has achieved this feat by
multi-pronged strategies and technologies such as Green revolution, Blue
revolution, white revolution and of course the latest yellow revolution and is
now poised for Rainbow revolution. There is need for continues efforts for
infusing of technology, capital and human resource for the accelerated growth.
Food and Agriculture Organization have indicated that agriculture in developing
countries would need an investment of around US $ 30 billion to achieve the
goal, set by the World Food Summit in 1996, of reducing the number of hungry
people by half by 2015.The Union Budget for 2013-14 is focussed on agriculture
with 22 per cent more funds to the agriculture ministry at Rs. 27,049 crore.

Initiative of Bringing Green Revolution to Eastern India (BGREI)
has resulted in increased production and productivity of paddy. Last year,
allocation for the scheme was pegged at Rs. 1,000 crore and this year also
stress has been given to this important segment by providing same amount of Rs.
1000 crore. This scheme has resulted in impressive increase in production of
food grains with the eastern region now turning a food surplus region in the
eastern region including Assam, Bihar, Chhattisgarh, Jharkhand, Odisha, Eastern
Uttar Pradesh & West Bengal. The BGREI is a sub-scheme of the Rashtriya Krishi
Vikas Yojna (RKVYJ ) and thus this flagship schemes has been provided Rs. 9,954
crore. Another important scheme, National Food Security Mission has been provide
Rs. 2,250 crore. Thus, the Budget is focused on augmentation of green revolution
by proposing various measures like continuing support to green revolution in
Eastern India, crop diversification in original green revolution states,
bridging yield gaps between investment in agriculture and National Food Security
Mission, Integrated Watershed Programme, pilot programme on Nutri-Farms,
establishing National Institute of Biotic Stress Management and a pilot scheme
to replant and rejuvenate coconut gardens. The budget proposes to start a pilot
programme on Nutri-Farms for introducing new crop varieties that are rich in
micro-nutrients such as iron-rich bajra, protein-rich maize and zinc-rich wheat.
A sum of upto Rs. 200 crore has been allocated to start a sufficient number of
pilots in the districts most affected by malnutrition. Ministry of Agriculture
will formulate a scheme in this regard and this will help to check the
malnutrition in the most affected districts of the country. Crop diversification
is must for the foodgrain bowls of our country to halt the depleting water table
and soil degradation. The budget has a provision of Rs. 500 crore for crop
diversification in states covered during the green revolution such as Punjab and
Haryana which are facing stagnation in farm yields.

Swabhimaan-A Significant Beginning

Jamal the protagonist of the film ‘Slumdog Millionnaire’ would surely have
faced a problem in en-cashing his cheque that he won from the contest “Who wants
to be a millionaire”! In all probabilities he would not have a bank account. And
this is a hard reality!

Despite long and impressive strides of the Indian banking
system during the last forty-four odd years (bank nationalization was done in
1969) majority of the Indian people are still outside banks’ ambit. The campaign
‘Swabimaan’ was basically launched during 2010-11 and extended in 2012-13 to
include these left outs in the banking foray. In his budget speech in 2012 the
union Finance Minister mentioned that “In 2010-11, “Swabhimaan” campaign was
launched to extend banking facilities …. to habitations having population in
excess of 2000 …. ln 2012-13, I propose to extend the “Swabhimaan” campaign to
habitations with population of more than 1000 in North Eastern and hilly States
and to other habitations which have crossed population of 2,000 as per Census

The Backdrop

Bank nationalization and directed credit though had weeded
out the moneylenders from the Indian rural scenario to a great extent yet they
are the second most-preferred source of loan (NSSO’s report no.498 published in
2003). Obviously this is attributable to the rampant financial exclusion of the
rural people involving absence of access to financial services in general and to
formal credit in particular. Prolonged and persistent ‘Financial Exclusion’ in
India as well in other developing countries in the wider perspective is a
serious threat to economic progress, leads to a decline in investment and has
the potential to fuel social tensions causing social exclusion. Financial
exclusion can be conceived as the lack of access by certain segments of the
society to suitable, low-cost, fair and safe financial products and services
from mainstream financial service providers. While lack of awareness, low
income, poverty and illiteracy among the people precipitate exclusion, distance
from bank branch, branch timings, cumbersome documentation and complicated
procedures, unsuitable products, alien language, staff attitudes, etc only
bolster the trend. Consequently the extreme incompatibility between the service
providers and the recipients make the informal credit sources more acceptable.
In the flipside it results in compromised standard of living, higher costs, and
increased exposure to unethical and unregulated standards and vulnerability to
uninsured risks.

Financial Inclusion tries to address this widespread anomaly by providing:

(i) no-frills banking account for making and receiving payments,
(ii) savings product suited to the pattern of cash flows of a poor household,

(iii) money transfer facilities,
(iv) small loans and overdrafts for productive, personal and other purposes, &
micro-insurance (life and non-life).

In this structure opening of bank accounts is considered an immediate and
important intervention.

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