P R Ganapathy | April 2, 2015

What the 2015 Union Budget means for us

While there are many analyses of the Union Budget, in this blog post I would like to focus on the implications for social entrepreneurs. From the highlights and information available thus far, I see the following:

* Swachch Bharat remains a big focus area for the government. From the target of toilets to be built and the granting of 100% exemption over and above CSR, it is apparent that a lot of money is going to go into this programme. There are opportunities for entrepreneurs working on innovative designs of toilets that reduce cost and time of construction and installation, and which make maintenance easier. There are also opportunities for service businesses around keeping these clean and incentivising people to use them, like Samagra. However, it also means that the programme will suck a lot of CSR money, away from other national priorities.

* We will have to wait for details of the Rural Infrastructure Development Bank and micro-irrigation programmes announced in the budget to see what they are about. It appears as if the latter is focused on efficiency in water lifting and distribution. There is also some allocation towards organic farming. Some of these may present opportunities for entrepreneurs working on these technologies, like Flybird Innovations.

* The Atal Innovation Mission is to be established to draw on expertise of entrepreneurs, and researchers to foster scientific innovations. While I haven’t been able to find much detail, the fact that the government recognises the value of an interaction between these entities to create breakthrough, game-changing, new products, is good. What is a bit disappointing is the small sum of money allocated for the purpose.

* School infrastructure upgradation is one aspect that was covered, with an ambitious target of 80,000 schools to be covered. While this is good, we await details on which aspect of infrastructure is going to be a priority. It is also encouraging that the focus on skill development continues. We wish we had seen more of a focus on encouraging PPPs in primary education to drive more accountability and quality.

* The focus on the JAM Trinity (Jan Dhan, Aadhaar, Mobile) and increase in direct transfers means that entrepreneurs working on developing technologies that leverage these pillars will benefit.

* Reduction in central allocation towards the National Health Mission and for clean drinking water is a matter of some worry. Theoretically state governments are supposed to step up and make up the shortfall but their priorities may be different. These critical areas should not get neglected.

Overall, the budget does have several positive aspects for social entrepreneurs. The government’s general focus on the role for private enterprise, especially Indian invention-based enterprise, means that the sector as a whole should benefit.

However, no discussion on social entrepreneurship can be done independent of other efforts to serve the poorer sections of our society. Unfortunately, there are some aspects of the budget which are likely to move things backward as far as overall development is concerned. The relatively flat allocation to NREGA and the significant reduction (50%) to the budget for the Ministry of Women and Child Development, for example. The reduction to Central allocation to various programmes, on the hope that state governments will make up the deficit. Some of these changes could lead to serious implications on the ground. Children will grow up malnourished, people will go hungry, and real lives will be lost. That’s a sobering thought.