Big rural push likely in Union Budget 2020-21

NEWDELHI: Union Budget 2020-21 is expected to focus on the transformation of rural India with a nearly 15% jump in fund allocation to boost the village economy and raise incomes, particularly of small and marginal farmers, three people aware of the development said on Tuesday.

“Transformation of the rural economy is a must for two reasons; to reverse the current economic slowdown, which is hit mainly due to weak demand, and to make India a $5 trillion economy by 2025. Both the objectives require special focus on agriculture and rural economy, hence greater fund allocation,” one of the people cited above said, requesting anonymity.

India’s gross domestic product (GDP) grew 4.5% in the second quarter of the current financial year, the lowest since March 2013. According to the government’s first advanced estimates, India’s GDP is expected to grow 5% in

2019-20.

It is expected that rural India will see an additional fund allocation of about ₹40,000 crore in 2020-21 compared to the total budget estimates for 2019-20, the first person said. The budget for the current financial year allocated ₹2,48,132.40 crore to the two key arms responsible for the rural economy -- the Department of Agriculture, Cooperation and Farmers’ Welfare (₹1,30,485.21 crore), and the Department of Rural Development (₹1,17,647.19 crore).

According to the budget estimate (BE) for 2019-20, total fund allocation to the Department of Rural Development was raised by 4.66% compared to the BE last financial year. For the Department of Agriculture, Cooperation and Farmers’ Welfare, the increase in BE 2019-20 was over 179% because of ₹75,000 crore allocated under the Pm-kisan scheme. The BE for the department in 2018-19 was ₹46,700 crore.