India likely to increase rural spending by nearly 50 per cent to $24.51 billion next fiscal year in its effort to boost jobs and affordable housing before the general elections in 2024. Finance Minister Nirmala Sitharaman is likely to present the 2023-24 Union Budget on February 1. This would be the last full Budget before the 2024 general elections. The fiscal year will begin on April 1 and runs through March.
Boost to the rural sector
The rural development ministry has been allocated Rs 1.36 lakh crore for the current fiscal year, but it could end up spending more than Rs 1.60 lakh crore, quoting sources news agency Reuters said.
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The reason behind the increased spending is cited as the need to address pandemic-driven stress in rural areas that has pushed demand for the country’s only minimum job guarantee scheme, which pays $2 to $3 a day.
Rural areas remained troubled in the post-pandemic times due to rising prices and limited non-farm job opportunities, forcing more people to sign up for the government’s job scheme — the Mahatma Gandhi National Rural Employment Guarantee Scheme, or MNREGA.
The Bharatiya Janata Party led by Prime Minister Narendra Modi won the elections for the second time in 2019, making him one of the most popular leaders of the country since its independence. Modi, who remained at the eye of the storm, had a mixed record of managing the economy and often targeted for rising unemployment.
The rural unemployment rate has remained above 7 per cent for most of the months in the current fiscal year, according to data from the Centre for Monitoring Indian Economy (CMIE), a private think-tank. The rural unemployment rate stands at 8.04 per cent in October, according to CMIE.
For the current year, the government had initially budgeted Rs 73,000 crore for the job scheme and Rs 20,000 crore for the housing scheme. It has already spent Rs 63,260 crore on the jobs programme, according to the rural development ministry’s website.