Before attempting to analyse the agricultural component of the Budget, the huge leakage of funds in subsidies supposed to be for the common man but which is diverted to those who do not require them, needs to be stopped.
The Prime Minister Jan Dhan Yojana has been a resounding success when it comes to providing bank accounts to the people who were out of the financial network. Within 100 days of launch of the scheme over 12.5 crore people have been provided a bank account. However, just opening an account does not solve the problem. In its first full budget, Narendra Modi government has decided to make Jan Dhan an integral part of the social security programmes by creating "JAM Trinity".
The government has accepted the recommendations of the 14th Finance Commission that seeks to enhance transfer of money to the states from the central taxes by an unprecedented 10 per cent.
Under the new arrangement 42 per cent money from the 'divisible pool' will be transferred to the states. This is 10 percentage point increase when compared with the previous 32 per cent.
It's really a pity and a challenge to the system particularly those who are in power, that even after 67 years of Independence, we have a lot of people living below poverty line. We have issues like rural-urban divide and serious economic disparities. Then we hear of farmers' suicides and sometimes of hunger deaths here and there. And then we get criticisms about the system not being sensitive to the vulnerable sections.
Welfare measures are not freebie. Hence, the policy culture must keep an effective balance between passion and compassion, to make the impact of underlying much more robust than in the sloganeering confine of 'greater common goods'.
To my mind, there cannot be any controversy or debate as to how to achieve inclusive growth. I think the experience of all developed and developing countries as well as India shows that in order to achieve inclusive growth we need to do five things.
The true challenge for India is to really to grow at 9-10 per cent per annum year after year for two decades of more to lift a vast section of population out of poverty. India has grown at those rates but grown relatively for a short period. Therefore, to have a sustained high growth for three decades, is a challenge. And these challenges will happen at a point when 700 million people in the 3-4 decades will move from rural to urban areas.
While six months is too short a period to judge the performance of a new government, Narendra Modi has rolled up his sleeves for a slew of reforms-some have been announced and implemented, some are getting framed and some caught up in administrative, political and legislative tangles.