India's 2024-25 Budget presents a mixed bag for rural development. With increased overall funding but cuts in crucial programmes like MGNREGS, the coming year will reveal if these allocations can effectively address the challenges faced by the rural economy.
As India solidifies its position as the world’s fifth-largest economy, the country has made significant strides in poverty alleviation and rural development. The Economic Survey 2023-24 reveals that an estimated 135 million Indians emerged from multidimensional poverty between 2015-16 and 2019-21.
This remarkable progress is reflected in the sharp decline of the national Multidimensional Poverty Index (MPI), which nearly halved from 0.117 in 2015-16 to 0.066 in 2019-21.
The female labour force participation rate (LFPR) has seen a substantial increase from 23.3 percent in 2017-18 to 37 percent in 2022-23. This rise is predominantly driven by rural India, where nearly three-fourths of female workers are engaged in agriculture-related work.
Despite this, the plight of India’s rural population remains a critical concern. Many still live a hand-to-mouth existence. The India Budget 2024-25, presented by Finance Minister Nirmala Sitharaman on Tuesday, brings both opportunities and challenges for India’s rural sector, aiming to address these issues.
Finance Minister Nirmala Sitharaman announced a significant increase in the allocation for rural development. “I have proposed to raise the allocation for the Ministry of Rural Development from Rs 159,964.23 crore in 2023-24 budget estimates to Rs 180,233.43 crore in 2024-25,” she stated.
This represents a substantial increase of over Rs 20,000 crore, potentially boosting various rural development initiatives in India Budget 2024.
The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), a crucial lifeline for rural employment, faces a significant funding challenge in the 2024-25 budget. A total of Rs 86,000 crore has been allocated for the scheme this year. While this represents a Rs 26,000 crore increase from last year’s initial allocation of Rs 60,000 crore, it falls substantially short of meeting actual needs.
The allocated amount is Rs 19,297 crore less than the scheme’s actual expenditure of Rs 1.05 lakh crore in the last financial year 2023-24.
More worryingly, as a share of the total budget, this year’s MGNREGS allocation marks a 10-year low at just 1.78 percent of the total budgetary allocation. This continues a trend seen in the interim budget presented before the Lok Sabha elections, which had also proposed to allocate Rs 86,000 crore for MGNREGS, less than the actual expenditure of Rs 90,805 crore in 2022-23.
This budgetary squeeze on MGNREGS is particularly troubling given the scheme’s vital role in providing a safety net for rural households. The programme guarantees 100 days of unskilled manual work employment in a year to at least one member of each rural household, serving as a crucial buffer against unemployment and poverty in rural areas.
On a more positive note, the Pradhan Mantri Awas Yojana (Grameen) sees an increase in allocation from Rs 50,486.99 crore in 2023-24 to Rs 54,500.13 crore for the current financial year.
Additionally, the government has announced plans to improve all-weather connectivity to 25,000 rural habitations through phase 4 of the Pradhan Mantri Grameen Sadak Yojana (PMGSY) in India Budget 2024.
Sitharaman announced a significant new initiative aimed at uplifting India’s tribal communities. The government will launch the Pradhan Mantri Janjatiya Unnat Gram Abhiyan (PM-JUNGA), a comprehensive scheme designed to improve the socio-economic conditions of tribal populations across the country.
“For improving the socio-economic condition of tribal communities, government will launch the Pradhan Mantri Janjatiya Unnat Gram Abhiyan by adopting saturation coverage for tribal families in tribal-majority villages and aspirational districts covering 63,000 villages and benefitting 5 crore tribal people,” Sitharaman stated in her Budget speech.
This ambitious programme aims to achieve full saturation of basic facilities among five crore Scheduled Tribe families across 63,000 villages in tribal-majority areas and aspirational districts.
However, Sitharaman did not disclose specific funding allocations or implementation details for PM-JUNGA.
The Department of Drinking Water and Sanitation received a marginal increase of 0.5 percent in its allocation, reaching Rs 77,390.68 crore for 2024-25. The Jal Jeevan Mission, crucial for providing household tap connections, saw a slight increase to Rs 69,926.65 crore. The Swachh Bharat Mission (Gramin) maintains its previous year’s allocation at Rs 7,192 crore.
Overall, the agriculture sector in this year’s budget sees a mix of increased allocations, new initiatives and some cutbacks.
“This year, I have made a provision of Rs 1.52 lakh crore for agriculture and allied sector,” announced Sitharaman. The India Budget 2024 emphasises agricultural research to improve productivity and develop climate-resilient crop varieties. Sitharaman also announced the implementation of Digital Public Infrastructure for Agriculture and digital crop surveys in 400 districts.
The Department of Agriculture and Farmers Welfare received an allocation of Rs 1,22,528.77 crore, up from Rs 1,16,788.96 crore in the 2023-24 Revised Estimates.
A key focus of this year’s budget is agricultural research and innovation. Sitharaman announced plans to review the agriculture research setup to enhance productivity and develop climate-resilient crop varieties. “New 109 high-yielding and climate-resilient varieties of 32 field and horticulture crops will be released for cultivation by farmers,” she revealed.
For the Department of Agricultural Research and Education, Rs 9,941.09 crore has been allocated, a slight increase from last year’s Rs 9,876.60 crore.
The allocation for the Department of Food and Public Distribution decreased to Rs 2,13,019.75 crore from last year’s Revised Estimate of Rs 2,21,924.64 crore. This reduction, along with cuts in fertiliser and food subsidies, could potentially impact food security measures.
To address rising prices of essential commodities, India Budget 2024 has allocated Rs 10,000 crore to the Price Stabilisation Fund, a significant increase from last year’s nominal allocation of Rs 10 lakh.
The lead image on top shows farmers with their paddy crop after a healthy harvest in Hooghly, West Bengal. (Photo by Pranab Basak)
