Uttar Pradesh budget earmarks Rs36,000 crore for farm loan waiver
The Uttar Pradesh budget seeks to make up for the legacy challenges, particularly in the social sector and infrastructure, and stimulate investments
New Delhi/Mumbai: The Bharatiya Janata Party government in Uttar Pradesh presented its maiden budget on Tuesday with a strong emphasis on social sector spending and earmarked Rs36,000 crore to fund the farm loan waiver promised in the run-up to the assembly polls in February.
The budget seeks to make up for the legacy challenges, particularly in the social sector and infrastructure, and stimulate investments.
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The industrial policy, released in the run-up to the presentation of the state budget and reported in Mint on 6 July, outlined a blueprint to woo industries, including the creation of land banks, promoting country-specific industrial parks to attract foreign direct investment and setting up private industrial parks around Lucknow-Kanpur, Kanpur-Allahabad and Varanasi-Allahabad zones.
Presenting the budget in the assembly, finance minister Rajesh Agarwal said chief minister Yogi Adityanath has set a target of 10% economic growth rate in coming five years. According to PTI, Adityanath told reporters that Uttar Pradesh would be among the most developed states in the country.
According to the advance estimates on state domestic product posted on the state government’s website, Uttar Pradesh is growing at 6.5%.
The Rs3.84 trillion budget for 2017-18, envisaging 13% higher spending than the state spent in the previous fiscal year, is heavy on proposals meant for improving connectivity, creating jobs, providing housing for the urban and rural population, improving law and order situation, providing scholarships for minority students, creating smart cities and improving cleanliness.
The budget which focused on the agrarian economy also earmarked Rs660 crore to revive cooperative sugar mills in the state.
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The farm sector schemes for which funds have been allocated include the Centre’s flagship crop insurance scheme and for setting up facilities for soil testing. To encourage mechanization in agriculture and help small farmers to hire farm implements, the budget also set a target to set up 300 custom hiring centres and 582 farm machinery banks.
The budget which proposes to cap fiscal deficit in 2017-18 to Rs42,967.86 crore or 2.97% of state gross domestic product also envisages a 10% reduction in borrowings at Rs57,509 crore. While social sector remained the focus of the budget, the budget, worryingly, envisages a 26% reduction in capital expenditure at Rs53,258 crore.
Widening of roads, adding Metro rail network, creation of smart cities and a strong push for housing are among the highlights of the budget. The budget earmarked Rs3,000 crore for urban housing projects and Rs4,500 crore for rural housing projects under the Pradhan Mantri Awas Yojana. The budget provides for Rs19,444 crore for the Sarva Shiksha Abhiyan scheme and Rs791.83 crore for the scholarship scheme for minority students.
To improve law and order, the Adityanath government will hire about 150,000 police constables over the next five years, of which 30,000 will be in the current year.
The budget also proposed setting up new hospitals, primary health centres and community health centres across the state. Keeping the state employees in mind, a provision of Rs150 crore for cashless medical facility for treatment of incurable diseases of state employees and pensioners has been included in the budget.
Rajat Kathuria, director at Indian Council for Research on International Economic Relations, said that for an agrarian state like Uttar Pradesh to accelerate economic growth rate, it has to attract more domestic and foreign investment. “Focusing on manufacturing and services sectors as well as ensuring uninterrupted power supply will facilitate faster growth,” he said. Higher spending on education and health and ensuring transparent governance will also facilitate a faster development trajectory, added Kathuria.
Neetu Chandra Sharma, Sayantan Bera and Gireesh Chandra Prasad in New Delhi, and Sahib Sharma in Mumbai contributed to this story.