Bharat may get more in Budget

New Delhi: The BJP government will recalibrate budget priorities in 2016 to focus on social initiatives, such as the country’s first major crop insurance scheme, while capping previously prioritised infrastructure spending, officials say.

Prime Minister Narendra Modi splurged on roads and railways this year in a strategy to spur economic growth. But it came partly at the expense of schemes for farmers and the poor, suffering through back-to-back drought years.

In the first confirmation of a shift in strategy, a senior government source with knowledge of deliberations for the Modi government’s second full Budget said New Delhi would focus more on the social sector following what he descri-bed as a “shocking” defeat in last month’s state elections in largely rural Bihar.

It was unlikely more money would be freed up for infrastructure when the budget is unveiled in February, he said, because the government is trying to keep spending on track to lower the fiscal deficit.

Commitments to raise government salaries, military pensions and to infuse capital into state banks reeling under bad loans have left little room for additional spending. What money is left, sources say, will be earmarked for the social sector — especially rural districts that house three-fifths of voters.

The focus on social welfare schemes precedes crucial state elections in heartland farming states such as West Bengal next year and Uttar Pradesh in 2017.

In what could be the first major scheme for farmers since Mr Modi took office in 2014, the government is planning to launch a fresh version of the national crop insurance programme next summer. It would cover the majority of India’s 263 million farmers, a source in the agriculture ministry said on condition of anonymity.

Under the plan being considered, a portion of premiums to be paid by farmers would be linked to their capacity to pay, the first source said.

To attract more growers, the Centre could lower the share of the premium farmers pay to up to 30 per cent from 50 per cent earlier, the source said.