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 Climate Change

Government and Policy
Published on: March 11, 2020, 3:35 p.m.
Budget 2020 had many sixes and a few misses; but implementation is key
  • The 16-point action plan for farmers presents a comprehensive approach

By O.P. Agarwal. The author is CEO, WRI India
I

ndia’s Annual Budget, presented by the Finance Minister on 1 February 2020, had many pluses, even if it had a few gaps. The detailed action plan to improve our rural economy, measures (like special allocations for education and skill development) to ensure jobs for our youth, and the focus on enhancing and upgrading our infrastructure, are all imperative, not only for realising our ambition to become a ‘$5 trillion economy’ by 2024 but also for social harmony and human well-being.

Indeed, it is important that rural, urban and environmental development go hand-in-hand in order to promote a sustainable economic growth model. If not, cities will be obligated to lead, and the environmental security of the nation will be compromised.

For years, India has been struggling to find solutions to the stress faced by farmers in agrarian states like Maharashtra, Telangana and Karnataka. Issues like crop failure, debts, and dismal incomes have led to extreme distress and suicides among this vulnerable group. If this crisis is not tackled, social unrest will continue to the brim, which in turn will affect the nation’s food security.

The 16-point action plan for farmers presents a comprehensive approach, encompassing agricultural practices, irrigation, deployment of renewable energy, supply chain management, alternative options for income generation using fallow and uncultivable land, infrastructure, innovation hubs and all the other sectors, and could indeed help build a robust rural economy in India.

Several decades ago, serving as a district collector in Golaghat, Assam, I had witnessed the plight of farmers suffering due to fragmented governance. When high-yielding variety of seeds arrived, fertilisers would not be available, or the irrigation pump would have developed a fault or the transformer at the local sub-station would have failed. Fixing these multiple issues required coordinated, technical help from multiple departments – something which was sorely lacking.

To streamline such loopholes, a complete, inclusive plan is vital. While doubling farmers’ incomes by 2022 is highly ambitious, drafting a comprehensive action plan is a powerful first step. And unless there is ambition, little happens.

India has entered a period of ‘demographic dividend’– a term defined by the United Nations Population Fund as “the economic growth potential that results from shifts in a population’s age structure”. In other words, it is the massive economic growth that can occur when the number of the working-age population (15 to 64 years) is larger than the non-working, dependent population (below 15 and above 64). Today, 65% of India’s population is of working age. This number is set to rise considering the large number of people below 15 in the nation today. In fact, India is expected to remain in the demographic dividend period for at least another three decades.

Ensuring ample and good quality economic opportunities to this growing segment is important. If not, this demographic dividend can easily turn into a ‘demographic curse’, as several studies have highlighted the correlation between unemployment and crime.

The Finance Minister’s focus on skill-development programs (like offering internship-embedded degrees and diplomas), promoting the manufacture of employment-intensive electronic items in India, allocating funds for village storage schemes to be run by self-help groups, encouraging startups, and offering incentives to micro, small and medium-sized enterprises will go a long way in boosting employment.

Infrastructure plays a key role in improving people’s quality of life and thereby advancing the economy. An outlay of INR 1.7 lakh crore for transport infrastructure will translate to better transport systems, connect people to jobs and goods to markets.

In an increasingly complex world, there has to be specialisation in economic activities to allow economies of scale that keep the cost of production low. However, this needs good transport infrastructure to make sure goods reach markets and food reaches people without incurring heavy losses. The addition of new national highways and expressways is, therefore, a welcome step.

The government’s push for inland waterways also has great potential to improve mobility if executed in a sustainable manner. Rivers offer a natural right of way for transport and if waterways are developed, based on appropriate environmental impact assessments and planning, this could be a sustainable option. Waterways were the traditional mode of transport in north-east India for centuries, slowly waning and finally becoming non-existent post-Partition.

The river Brahmaputra, running across 900 km and virtually bisecting Assam into northern and southern, can be an ideal transport trunk corridor. However, limited depth (draft) in its upper reaches restricts this possibility. By allocating funds to make the river navigable from the western end in Dhubri to the eastern end in Sadiya, could help turn it into the state’s lifeline. During the annual flood season, when national highways are shut down, the river could offer an even wider right of way.

Indian Railways own valuable property across geographies, but most railway station areas are in an appalling condition. Their abysmal lack of facilities, hygiene, and infrastructure is in sharp contrast with railway stations in Europe and the US that are celebrated as iconic structures.

The provisions to facilitate Station Area Development is a much-needed initiative since it will not only improve the city’s aesthetics but also enhance revenue. Added to this, setting up large solar generation along railway tracks could help scale up solar capacity, and support India’s commitments to achieve 100 GW solar power by 2022. In fact, setting up solar facilities along highways could add to the benefits.

Incidentally, Budget 2020 had a few significant misses. A strong and definite thrust towards cleaner mobility being one. The government has repeatedly articulated its interest in promoting electric mobility. This will not only help improve air quality and reduce dependence on imported fuels but also improve the plant-load factor of our electricity generating facilities. Today, India has the potential to become a global technological leader in this sector. The government has expressed support to this transition, but it did not find a mention in the budget.

Strong, ambitious climate action would also have been welcome. While the Finance Minister mentioned setting up a global coalition for disaster-resilient infrastructure, additional efforts towards mitigation could have strengthened India’s role as a global leader.

The budget could have also paved the path for a well-balanced, sustainable urban development model to promote India’s $5 trillion economy ambition. Today, cities are spreading swiftly, beyond notified urban areas, where services delivery remains scarce due to governance gaps. Inadequacies in urban mobility, water supply, sanitation, housing and other services constrain the economic efficiency of cities and inconvenience citizens.

Studies have shown that India’s urban infrastructure needs would be around $1.2 trillion, within the next 20 years. A public budget alone cannot support this. Public-private partnerships could offer solutions, but a formal policy on how to manage urban areas is needed.

A final warning: India has often suffered due to poor implementation, despite strong policies and adequate funding. Budget 2020 articulated right ambitions and allocated generous funds, however, the Government must effectively support and strengthen the delivery machinery in terms of manpower, skill development, and by encouraging positive attitudes to ensure that its vision is realised.


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