Budget: A four-point checklist for rural India

Reviving rural economy is key. Here is what the government can do

On Wednesday, this paper reported that the forthcoming budget may make special efforts to boost the rural economy. This is a step in the right direction. Unless the rural economy is rejuvenated, any sustained revival in mass incomes, and, therefore, demand, will continue to elude the Indian economy. Here are four things which the budget could consider.

One, the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) is among the most crucial policy instruments of mass income generation. Anecdotal accounts and reports by social activists have repeatedly pointed out that payments under the scheme are often delayed by long periods. This defeats the purpose of the scheme, as those seeking work are mostly looking to buy their next meal. The budget should make sure that such delays do not occur. Two, the government has spent a lot of money on providing private infrastructure, such as houses and toilets in villages, to improve standards of living. It should now focus on public infrastructure to augment incomes. Livestock is a key area here. A focus on reviving common pastures will help both farm incomes as well as environmental concerns. Three, the last budget announced its intent to make India self-reliant in edible oils. It should build on that commitment with a clear policy to incentivise farmers to achieve this goal. Four, with rising freak weather events, crop losses will mount in the future. This hurts both consumers as well as farmers. The budget should lay down a policy to deal with such exigencies in addition to the existing public distribution system.Finally, if revenue shortfalls and fiscal considerations lead to a cutback in rural spending, then it will reinforce the idea that the rural economy is only the residual element in this government’s scheme of things. Any tall promises in the forthcoming budget will have to be taken with a pinch of salt in that case.