Budget 2018: In the upcoming Union Budget 2018, Finance Minister Arun Jaitley will look to provide the much needed boost to rural infrastructure. Sharing his views ahead of Budget 2018, Inderjeet Bhatia of Macquarie Securities says that Finance Minister Arun Jaitley would have to balance between pushing productive investments like infrastructure and pushing more on either the rural employment guarantee programme or programmes like rural and urban housing projects. Finance Minister Arun Jaitley had earlier pointed out that the government has increased its allocation to rural infrastructure. The Economic Survey 2017-18 which was released in Parliament on Monday ahead of the Union Budget 2018, noted that Agricultural R&D, especially in rural India is the main source of innovation, which is needed to sustain agricultural productivity growth in the long-term. We take a look at the key areas Union Budget 2018 will likely to focus on, with emphasis on rural sector.

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Rural housing

Affordable housing which has been an important reform for the Narendra Modi-led government, could be top priority for Finance Minister Arun Jaitley. With respect to the housing sector, the newly enacted Real Estate Regulation Act (RERA) could be in focus. Apart from RERA, the Union Budget may also take stock of the Housing for All by 2022 initiative launched by the government. “We have to keep the momentum going on infrastructure creation, including rural infrastructure. Therein lies the core of India’s future growth story,” Finance Minister Arun Jaitley had said recently, laying specific emphasis on housing and sanitation.

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Rural infrastructure

Top market voices and analysts alike expect that Finance Minister Arun Jaitley will give a big boost to rural and infrastructure spending in the upcoming Union Budget 2018. Asif Iqbal, Research Head (Equities), Escorts Securities told FE Online in an interview  that rural spending as a percentage of GDP has come down below 1% from 1.4% in last 5 years. “We could see a boost in rural spending. Push to NREGA, Rural Road, Rural Housing,” Asif Iqbal added. 

Poverty alleviation

The Union Budget 2018, will also like the preceding Budgets, have allocation towards poverty alleviation measures. Last year, Arun Jaitley had promised to go ahead with Mission Antyodaya to pull one crore households out of the poverty line and make 50,000 gram panchayats poverty-free by 2019. He also had task of completing 1 crore houses by 2019 for the homeless and those living in kutcha houses and 100 per cent village electrification by May 1, 2018.

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Employment generation and skilling

The government will continue to provide thrust on rural employment generation and re-skilling the labour force. On imparting new skills in rural areas, Finance Minister Arun Jaitley had promised mason training to 5 lakh persons by 2022, with an immediate target of training at least 20,000 persons by the year-end.