Budget 2023 may see huge jump in rural spending

 

Budget 2023: The increased spending will mainly be to address the stress caused by the pandemic in rural areas, says the report

• Finance Minister Nirmala Sitharaman is likely to present the Budget 2023 on February 1

A source familiar with the matter told Reuters that India could boost rural spending by about 50% to 2 trillion rupees ($24.51 billion) in the next fiscal year, as the country seeks to boost jobs and affordable housing ahead of national elections .

Finance Minister Nirmala Sitharaman is likely to present the 2023/24 budget on 1 February, the last full budget before the 2024 national elections. India's fiscal year begins on 1 April and lasts till March.

The Indian government had allocated 1.36 trillion rupees for the Ministry of Rural Development for the current fiscal year, but it may spend more than 1.60 trillion rupees, according to two government sources, who wished to remain anonymous because the information was not yet available. Has not been made public yet.

He said the increased spending is mainly to address pandemic-induced stress in rural areas, which has boosted demand for the country's only minimum job guarantee scheme, which pays $2 to $3 a day.

India's ministries of finance and rural development did not immediately respond to requests for comment.

Coming out of the pandemic, the Asian country's rural areas were under pressure from rising prices and limited non-agriculture job opportunities, prompting more people to sign up for the government's job scheme - the Mahatma Gandhi National Rural Employment Guarantee Scheme, or MGNREGA was forced to do.

Under the leadership of Prime Minister Narendra Modi, the Bharatiya Janata Party won the national elections for the second time in 2019, making him one of the most popular leaders of the country since independence.

However, Modi has a mixed record in managing the economy and has been criticized for rising unemployment.

The rural unemployment rate has remained above 7% for most months of the current fiscal, according to data from the Center for Monitoring Indian Economy (CMIE), a private think-tank.

According to CMIE, the rural unemployment rate stood at 8.04% in October.

For the current year, the government initially budgeted 730 billion rupees for the job scheme and 200 billion rupees for the housing scheme. According to the website of the Ministry of Rural Development, it has already spent 632.6 billion rupees on the employment programme.