NEW DELHI – India pledged Monday to invest billions of dollars to improve the lives of farmers and boost the rural economy, drive consumer demand and stimulate growth.
Finance Minister Arun Jaitely proposed spending nearly $13 billion on rural development, promising higher incomes for farmers who form the majority of India’s 1.2 billion people.
Presenting the annual budget for 2016-17, he forecast that India would grow by 7.6 per cent in the year ending March 2016. The government intends to distribute the benefits of growth among the poorer sections of society, including the vast majority of India’s farmers, he said.
“We plan to double farmers’ income in five years,” Jaitely said.
He outlined what he called the government’s “nine pillars” of a “transformative agenda” for the economy.
They include a slew of measures to boost education, increase spending on roads, irrigation and other infrastructure, intensify oversight of government spending and reform India’s complicated tax regime.
The Indian economy is doing well despite slowing growth in other emerging and leading economies, Jaitely said. His reference to a recent observation by the International Monetary Fund that India was the one bright spot in the global outlook was vigorously applauded by fellow members of the ruling Bharatiya Janata Party.
“We inherited an economy of slow growth, high inflation and low faith in government … amid global headwinds, the Indian economy has held its own,” he said.
Prime Minister Narendra Modi led his Bharatiya Janata Party to a decisive win in national elections in May 2014, promising to overhaul the Indian economy and change archaic laws.
However, Modi’s attempts to streamline taxes and overhaul antiquated labour and land acquisition laws to attract more investment mostly have been thwarted by opposition parties.
Investments in agriculture are urgently needed, since vast numbers of farmers in India’s monsoon-dependent farm sector are suffering from two back-to-back years of poor rains, analysts say.
However, the focus on helping farmers likely also was done with an eye toward legislative assembly elections due in five states in the next few months.
In the last two years, the Modi government has pumped funds into infrastructure development. The recent drubbing the ruling party received in state elections in the farming state of Bihar inspired a change in emphasis.