Structural challenges facing the rural economy
Farmer distress, rural distress and organized protests by farmers in different parts of the country and its impact as displayed in Gujarat elections will definitely have the government worried. The Budget 2018 presents a unique opportunity for the government to address challenges faced by the rural economy. Also many parts of the country had been suffering from drought which further added to the problem. The government has earlier stated that they plan to double the farmer’s income in the next 5 years. Although the government has taken steps to address few issues that have plagued the rural economy but the benefits just don’t reach the small and marginal farmers who form the majority of rural households. For instance there has been growth in crop insurance but the growth hasn’t been satisfactory and a majority of small farmers still don’t possess crop insurance noted the Comptroller and Auditor General (CAG) in a 2017 report. The most basic structural challenges faced by the rural agricultural sector includes issues such as adequate minimum support price (MSP), access to markets, clear policy formation, fragmentation of land holdings, lack of sufficient risk-mitigation process for farmers and more. Although these issues are not really going to be addressed in the Budget 2018 as per se but budgetary allocations for institutional reforms covering the above issues may go a long way in addressing rural distress.
Rural economy other than agriculture
Rural economy is also undergoing a silent transformation. Today half of the country’s industrial production comes from the rural areas. Share of agriculture in the gross rural output has been steadily declining over the decades and now have even fallen below 50%. Rural services which form around a quarter of gross services output of the country and rural construction that constitutes to about half of all building activities in the country are also no lightweight sectors to neglect. Surprisingly even after this impressive growth in rural industrial production, the trend has not reflected in rural employment growth. Rural employment has remained flat or has shrunk thus increasing rural joblessness which is a major concern that the government will have to address in the Budget 2018. Experts believe that steps to increase productivity, further enhancing skill development, shift from unorganized to formal economy can help address these issues faced by rural industries.
Steps in the Budget 2018 that may be taken for rural economy
Government has prepared an action plan to double farm income for farmers in the next 5 years and under the plan has listed many reforms. Experts believe that the said reforms and recommendations should be given a boost through the Budget 2018-19. Restructuring the union agriculture ministry and setting up of a review mechanism at district, state and national levels, fixing the existing farmer-centric schemes to reach the last man, breaking the stranglehold of middlemen, recognizing tenant farmers by liberalized land leasing policy and encouraging decentralized procurement of crops by states are some of the reforms that have been proposed and can be looked in to in the Budget. Other than that the primary expectation of the rural economy from the FM and the Budget 2018 would be higher allocation of funds to stimulate rural economy, increased capital expenditure in agriculture sector, access to affordable housing under the government’s project of housing for all by 2022, steps to boost rural employment, access to affordable and ample power and better connectivity to rural India through enhanced road construction.
 "budget 2018")
