The Union Budget 2024, presented on 1 February, will be interim – and the Economic Survey will be sorely missed. General elections, that is also due later this year, will have a long arc on the budget.
In 2023, Finance Minister Nirmala Sitharaman listed seven priorities or 'Saptarishi' guiding the government through the Amrit Kaal, and there will be continuity on these priorities.
Just as Arundhati, the barely visible star in the Big Dipper, symbolises the blessings of flourishing after a prolonged drought, the Amrit Kaal Sankalp underscores the need for a disproportionate focus on the rural domain.
Prime Minister Narendra Modi has directionally set the focus with an imaginative four-tiered approach: farmers, youth, women, and the poor – laying the foundation for place-based income and job creation, reminiscent of the guiding star 'Arundhati' in the finance minister's Saptarishi.
The challenge lies in navigating the limited fiscal width of an interim budget to steer towards inclusive rapid growth, aligning with the Amrit Kaal vision.
The consensus among commentators predicts India's next 25 years to be an era of unprecedented growth, with estimates suggesting an average GDP growth of 6.3 percent through the 2030s.
With a population surpassing 900 million, India's rural landscape is larger than the entire European population, a demographic reality projected to persist till 2050.
Given that the rural economy contributes nearly half of the national income and employs 70 percent of the workforce, these times offer an opportune moment to harness the tailwinds of digital transformation, a net-zero economy, and the untapped potential for growth and innovation in rural India.
India After 100 Years of Independence: What's Ahead?
India@100 envisions a 13-fold increase in per capita income, with a targeted sector composition of Agriculture at 7 percent, Manufacturing at 34 percent, and Services at 59 percent by 2047.
The pivotal role of labour income in GDP, expected to rise from 35 percent to 43 percent, demands a keen focus on the chaturvarna of poor, youth, women, and farmers.
However, in the face of limited fiscal resources, a strategic pivot towards manufacturing and value-added services in smaller cities is imperative. This entails supporting near-farm, labour-intensive, low-capital enterprises with accessible technology and affordable logistics to fortify the local economy.
A substantial imperative and opportunity lie in the transformation of "rural habitats" to meet the growing aspirations for a better quality of life, furthering local ownership, and overall impacting how rural India lives, breathes, and grows.
Public investments can propel the creation of "modern sustainable village habitats," building on the success of initiatives like Swachh Bharat Mission, Jal Jeevan Mission, Ujjawala, and Saubhagya.
Such investments not only enhance the quality of rural life but also provide substantial support to the rural construction and real estate sector, the second-largest employer after agriculture in villages and the largest employer of migrant and casual workers. The Interim Budget 2024 will do India a massive leg-up by setting a roadmap to upend the “sunken peasant habitats."
Rural Jobs: An Urgent Imperative
Rural jobs stand out as an urgent imperative, necessitating a departure from the 'business as usual' approach. The rural construction and real estate sector must act as the gateway for aspirational employment when young seek a way out of agriculture.
Any support to this sector is bound to expand jobs and support India’s large informal workforce.
With India on a rapid growth path and increased investments in industrial infrastructure, a strategic emphasis on increasing worker productivity becomes crucial for fostering a virtuous rural growth spiral.
I would closely watch Interim Budget 2024 on outlay and any innovative tailwinds to PMAY-Grameen, and Pradhan Mantri Shram Yogi Mandhan (PMSY).
Together with PM-Vishwakarma and related schemes, a strong expression of political and administrative on “rural habitats” will be a win.
Within the rural economic space, the disparity in worker productivity shows directional pivoting of public policy; cultivator earns 2.27 times the income earned by a labourer; a non-farm worker earns more than twice the income of cultivators. Key to income gains is labour productivity as, apart from production, this will drive a new consuming class or demand for goods and services leading virtuous rural growth spiral.
Connecting Rural India to Innovation Ecosystems
The intersection of increased public funding, private capital innovations, and natural resources offers substantial headroom to harness accelerated economic opportunities.
Connecting rural areas to the innovation ecosystem and new technologies aligns with climate change commitments, conditions are ripe for exploitation of rural competitive advantages in local-economy, green/bio-economy.
The challenge and opportunity are to use the foundational gains as a springboard to usher in prosperity. Overall investments in skilling, infrastructure, and public services on the back of the public digital infrastructure have created conditions in rural areas for nature-based jobs and allied sector growth.
Universal welfare programmes need targeted attention – aspirational districts, blocks, vibrant villages – and recent assessments underscore the necessity for a differentiated investment and incentive regime for specific districts.
The recent Rural Quality of Life assessment of 707 rural districts, shows a differentiated investment and incentive regime is required for the bottom two pentiles i.e. 233 districts.
With a younger demography and unparalleled technology access, rural India has the potential to emerge as the engine driving India's growth and prosperity. Interim Budget 2024 will undoubtedly play a pivotal role in determining the trajectory of this transformative journey.
(Anish Kumar is the Managing Director of Transform Rural India. This is an opinion piece, and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for them.)
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