How Macro-Level Budget Decisions Will Impact Us (Part -1)

Of the 10 major focus areas of this budget, let us look at the following 5 in the first part of the series.

1. Agriculture sector

What was said:

• The coverage under the Fasal Bima Yojana has been increased from 30% to 40% of the crop area.
• A sum of Rs.10 lakh crore is allocated as credit to farmers, with 60 days’ interest waiver.
• NABARD fund will be increased to Rs.40,000 crore.
• Government will set up mini labs in Krishi Vigyan Kendras for soil testing.
• A dedicated micro irrigation fund will be set up for NABARD with Rs.5,000 crore initial corpus.
• Irrigation corpus has been increased from Rs.20,000 crore to Rs.40,000 crore.
• Dairy processing infrastructure fund will be initially created with a corpus of Rs.2000 crore.

How will it impact you: These measures have the potential to increase farm production, leading to a reduction in food prices over a period of time. Expected increased agricultural activity will also be good for companies producing seeds, fertilisers, and pesticides companies, thus creating a great investment alternative.

Related: Investment options- thinking beyond the obvious

2. Rural Economy

What was said:

• Over Rs.3 lakh crore will be spent on the development of rural India with the government targeting to bring 1 crore households out of poverty by 2019
• The government will take steps to ensure participation of women in MGNREGA goes up to 55%, and investment has been increased to Rs. 48,000 crores.
• It also aims to achieve 100% rural electrification by March 2018.
• Proposal to complete construction of 1 crore houses for the homeless and those with “kaccha” homes and increase tarred road access to more villages by allocating 19,000 crores for the Pradhan Mantri Gram Sadak Yojana.

How will it impact you: One crore households coming out of poverty will be good for consumer companies. Similarly, with rural expenditure going up, it will benefit those involved with rural housing and development. This will in turn make investments into these companies a good option.

Related: Real estate vs Gold- The Face Off

3. Youth Development

What was said:

• The government will create centers offering job-based training and introduce a system of measuring annual learning outcomes.
• Plans for an innovation fund for secondary education with focus on 3,479 educationally-backward blocks.
• Proposal to extend Pradhan Mantri Kaushal Kendras to more than 600 districts across the country, from 60 districts at present.
•  In order to maximise the Skill India mission, up to 100 India International centers will be set across the country,  where courses on foreign languages will be offered to increase employability abroad.
• In 2017-18, a program called SANKALP (Skill Acquisition and Knowledge Awareness for Livelihood Promotion Program) will be launched at a cost of Rs.4,000 crore. SANKALP will provide market relevant training to 3.5 crore youth.

How will it impact you: Availability of skilled manpower will help business owners across the country with their manpower requirements. With an increase in education levels across the country, India’s future as a developed nation will become more certain.

Related: Millennials and money [Infographic]

4. Empowerment of the Poor & Underprivileged

What was said:

• Interest rates for rural housing will be reduced and affordable housing will be given infrastructure status.
• Under a nationwide scheme benefitting pregnant women, Rs.6000 will be transferred to every woman who has an institutionalised birth and gives her child the prescribed vaccinations. The flipside to this, many say, is that in an already overpopulated country, this is another impetus to have more children.
• 1.5 lakh health sub centers will be transformed into health wellness centers and Rs.500 crore allocated for Mahila Shakthi Kendras.
• While allocation of funds for Scheduled Caste stood at Rs.52,393 crores; a sum of Rs.1,84,632 crore has been allocated for women and children.

How will it impact you: Better healthcare will benefit the nation in general. Infrastructure status for affordable housing will benefit companies involved in this sector, providing investment avenues in their stock.

Related: Critical illnesses and their financial implications in India [Infographic]

5. Infrastructure and Railways

What was said: 

• A total allocation of Rs.39,61,354 crore has been made for infrastructure; Rs.64,000 crore allocated for highways and the total allocation for Railways is Rs. 1,31,000 crore.
• Service charge on tickets booked through IRCTC will be discontinued.
• A corpus of Rs.1 lakh crore for five years towards passenger safety will be put in place.
• Work on 3,500 km of railway lines will be commissioned this year.
• SMS-based ''clean my coach service'' has been put in place and Coach Mitra facility will be introduced to register all coach related complaints.
• By 2019, all trains will have bio-toilets.
• 500 stations will be made differently-abled friendly.

How will it impact you: Infrastructure companies will benefit with increased business which will make them attractive avenues for investment. Development of infrastructure also benefits business while providing better facilities for regular folks.

Disclaimer: This article is intended for general information purposes only and should not be construed as investment , tax or legal advice. You are encouraged to separately obtain independent advice when making decisions in these areas.