Rural sector thrust missing

Budget priorities

By Dhurjati Mukherjee

The Budget, as usual, showed a distinct favour for the middle and rich sections as it’s the last one before the Lok Sabha elections. Political analysts have called this a semi-election year as nine state elections are due this year. It was quite unexpected that Finance Minister Sitharaman showed little concern for rural poor and impoverished sections, though some sops were announced whose effect would be minimal. More than worrying on fiscal deficit, the thrust should have been on grassroot development.

The Budget mentioned seven priorities and the ones on inclusive development and reaching the last mile remains a jargon. The understanding of inclusive growth means upgrading living conditions of the impoverished and taking suitable measures for development of backward areas. The question is whether the Budget has really understood the term ‘inclusiveness’ and focussed on this aspect of grass-root development? Also, the priority on youth power remains unclear as there is no concrete plan to boost unemployment and underemployment, keeping in view that there are 46 million jobless, not to speak of under-employment and concealed unemployment.

Though the budget has been broadly hailed,it has been by business leaders, corporate professionals, and urban-based economists. They are not quite concerned about the need for a rural thrust to the budget and conditions of the poor and EWS who struggle for existence. The launch of the Primitive Vulnerable Tribal Groups (PVTG) Mission with an allocation of Rs 15,000 crore in three years i.e.Rs 5000 crore in 2023-24 is insignificant.

The need for more resources or revenue generation cannot be doubted but the government has done little to raise revenue by taxing the rich, which even the World Bank suggested. It was necessary to increase taxation of the rich and the super-rich which could have been channelled for infrastructure development in rural and semi-urban areas, speciallyfor social infrastructure. Unfortunately, Sitharaman didn’t on these lines and even the tax exemption is raised from Rs lakh to Rs 7 lakh per annum, while maximum tax rate has been further slashed to 30%.

Due to lack of funds the MGNREGS though widely believed to be a “powerful instrument for inclusive growth in rural India”, the number of days of work remains barely half the promised 100 days. It is believed that providing even 60 days’ work would require about Rs 1.1 lakh crore while providing work for 80 days would require roughly Rs 1.5 lakh crore.

But it’s distressing to note that a paltry amount of Rs 60,000 crore has been allocated in the budget, which is highly insufficient by any standards. Worse, not a word has been said on this and even assuming that another Rs 20,000 may be sanctioned later (in the revised estimates), the figure of Rs 80,000 crore cannot provide even 40 days’ work, keeping in view the pending dues of this fiscal. This is much below the allotment of Rs 89.400 in the current fiscal. Moreover, according to estimates Rs 25,000 crore are due, taking the allotment figure to a very paltry figure of Rs 45,000 crore.

In fact, the spending of the rural development ministry declined from Rs 288,446 crore in 2021-22 to just Rs 236,545 crore in 2023-24. Apart from the drastic decline in rural job scheme, spending on National Food Security Act is to come down from Rs 215,000 crore estimated for 2022-23 to just about half that level to Rs 135,000 crore. Thus, the government is more interested in wooing the rich and the upper middle class than the lower income groups and the rural poor.

In the farming sector, the green initiative of facilitating one crore farmers to adopt natural farming in laudable for which 10,000 bio-input research centres are proposed to be set up. But the need of the day is to increase farmers’ income and motivate them to shift to value-added crops and diversify their product range. For this, the Indian Council for Agricultural Research must set up centres in each sub-division with experts from various fields and institutions, including IITs.

In this connection, one can’t thank finance minister for hiking agricultural credit of Rs 20 lakh crore, which should help farmers broadly. But even here the big and middle level farmers would benefit and not small and marginal farmers for whom a scheme should have been formulated. The outlay for Rashtriya Krishi Vikas Yojana declined by 31%, PM FasalBima Yojana by 12% and provision for PM Kisan scheme remained the same. Though the Economic Survey acknowledged that public sector investments have grown by just 4.3% in 2020-21, the lowest in a decade, it’s obvious that agriculture seems to be off the priority list. The reduction in food and fertiliser subsidies may have some logic as the savings have been invested in the ministries of fisheries, animal husbandry, horticulture and dairying that are more nutritious and can augments farmers’ income.

In health sector, though there’s virtually no increase if the inflation factor is considered with funds decreasing in core activities such as strengthening of public health systems, disease control and child health initiatives and much-hyped National Health Mission. There’s disturbing stagnation in the funds to be available to key health programmes.

Even for education, there’s been some increase in budgetary allocation, experts believe that both school and higher education will stagnate and may actually decline in real terms, if inflation is taken into account. This comes at a time when there’s imperative need to spread education in villages and improve quality of school education after the learning losses suffered during pandemic years.

What is significant, however, in the budget is the focus on infrastructure development where the capital investment outlay has been increased by 33% to Rs 10 lakh crore of which the road, transport and highways sector has been given Rs 2.7 lakh crore, which is 25% more than the revised estimates in the current fiscal. The outlay on railways stands at a record high of Rs 2.40 lakh crore, a massive increase of 56%, which is expected to boost spending on doubling railway lines, setting up new tracks and rolling stock, apart from inducting new trains.

Government and experts have rightly been emphasizing about the need for skilling and re-skilling. There’s now Pradhan Mantri Kaushal Vikas Yojana 4.0 to be launched to skill lakhs of youth within the next three years and shall benefit in overall enhancement and development of the youth. The pan India national apprenticeship that is a direct benefit transfer scheme to provide support to 47 lakh youths in three years is advantageous to young generation.  But though skilling is important, a question arises how many would get employment as the private sector is shy.

The focus of any budget must be on grass-root development and transforming the rural sector where majority of the population lives.John Drazehas deplored the fact that funds for mid-day meals and child development are down by 43% and 40% respectively.

Thus, Rs 30,000-odd crore more could have easily been allocated to the rural job scheme, more focus on rural and child health and education in at least 100 blocks, but it doesn’t concern the politicians. Whatever statistics one may dish out, it goes without saying that the rural poor continue to struggle for existence. Finally, the big question is how long will the “rural poor continue to subsidise the urban middle class?’ a quote by Prof Michael Lipton, well-known British economist. — INFA