The Union Budget was presented by Finance Minister Arun Jaitley on February 1. The various schemes announced were aligned to the broader budget contours of Transform, Energise and Clean India (TEC). The agenda seeks to transform (both the quality of governance and thereby, people’s quality of life), energise (various sections of society, thereby putting focus on youth) and clean (the country of evils — corruption, black money and non-transparent political funding).
We believe there are three main tools in the government’s arsenal to achieve the TEC vision — Bharat Net and DigiGaon, SANKALP and Electoral Bonds.
Transform (T)
Tool: BharatNet and DigiGaon
About it: With an allocation of ₹10,000 crore, this project seeks to connect Indian households, especially in rural areas, through broadband internet. This is the backbone of the Digital India programme.
Under the BharatNet Project, Optical Fibre Cable (OFC) has been laid across 155,000 kilometres. By the end of 2017-18, high-speed broadband connectivity on optical fibre will be available in more than 150,000 gram panchayats. A DigiGaon initiative will be launched to provide tele-medicine, education and skills through digital technology.
Beneficiaries: This programme is primarily targeted at the rural households. The other beneficiaries of this project would be the digital media advertisers and rural-centric companies that will have increased access to a connected rural India. The DigiGaon initiative will help in cost rationalisation and medical care convenience in rural India.
Expected roadblocks : Rural broadband programmes are prone to market failures and government failures which can be seen from the slow implementation of National Optical Fibre Network.
Our suggestions : To expedite implementation, employing a PPP-based model to expand broadband coverage is a viable option. Currently, a special purpose vehicle under the telecom ministry is undertaking the rollout. A PPP under the Build-Operate-Own-Transfer model with attractive revenue sharing terms would help fasten the implementation.
Energise (E)
Tool: SANKALP (Skill Acquisition and Knowledge Awareness for Livelihood Promotion Programme)
About it : This scheme, introduced in this year’s Budget and allocated ₹4,000 crore, aims to empower the youth by maximising their employability potential and thereby leveraging the huge demographic dividend available within the country.
The next phase of Skill Strengthening for Industrial Value Enhancement (STRIVE) will also be launched in 2017-18 at a cost of ₹2,200 crore. STRIVE will focus on improving the quality and market relevance of vocational training provided in ITIs and strengthen the apprenticeship programmes through industry-cluster approach.
Beneficiaries : It is targeted at the 35 million youth of the country. Another plan to open 100 India International Skill Centres was also proposed to provide requisite vocational training to the country’s youth.
Expected roadblocks : The project has a very ambitious outlook but no clear picture with respect to its implementation. The main challenge is to build the infrastructure as well as ensure that the training curriculum is upgraded to keep up with the constantly evolving industrial parameters.
Our suggestions : The option of tying up with specific industries on a demand-pull basis can be explored to effectively tackle the twin problem of infrastructure development and training relevance. It will also ensure easier absorption of people into the mainstream workforce.
Clean (C)
Tool: Electoral Bonds
About it : Some effort has been taken in this Budget to tackle the long overdue cleansing of political funding. The maximum cash donation that can be taken from an individual has been capped at ₹2,000, which will force political parties to go in for a more transparent digital route of accepting money. Another interesting step taken was with respect to electoral bonds, which is a step towards corporatisation of political parties. Under this scheme, a donor can purchase bonds from authorised banks against cheque and digital payments only.
Beneficiaries : This reform will bring about greater transparency and accountability in political funding, while preventing further generation of black money. Hence, this will help restore the confidence of people in political parties, as well as aid the ‘clean’ political parties, which painstakingly maintain records.
Expected roadblocks : Circumventing this entire mechanism by simply creating a parallel channel for cash transactions always remains a strong possibility. Also, compliance with existing provisions itself is abysmal.
Our suggestions : Create an environment where there is a prescription based on the total expenditure/size of the party for the minimum amount that has to be raised via bonds. Penalties should be directly linked to the sitting MP/MLA as this is a very sensitive issue which requires change to flow from the top.