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Thursday, June 13, 2024

Impact of Budget 2024 on Jobs, Infrastructure, and Social Security in India

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As India gears up for the 2024 interim budget ahead of the Lok Sabha elections, there is hope that the budget will prioritize rural jobs and programs. This could involve initiatives like ‘Make in India,’ expansion of Production-Linked Incentive (PLI) schemes, and targeted agriculture-related subsidies and incentives. While reduced subsidies in the budget may affect rural demand, it is anticipated that the government will allocate these savings towards investments in rural infrastructure and incentives to bolster cash flow.

Interim Budget 2024:

With the impending 2024 interim budget, the emphasis on rural jobs and programs becomes even more crucial, given the large population reliant on agriculture and allied activities. In light of this year’s Lok Sabha elections, there is positivity surrounding initiatives such as ‘Make in India,’ the expansion of Production-Linked Incentive (PLI) schemes, and targeted agriculture-related subsidies and incentives, aiming to cater to the rural populace and create employment opportunities.

“Subsidies, as a share of budgetary outlay, are projected to be around 7 percent during FY 2023-24, compared to 8 percent in FY 2022-23. This reduction is expected to contribute to lowering the fiscal deficit as the government consolidates its expenditure. However, the decrease in subsidies could create pressure on rural demand amidst challenges such as lower agricultural output. It is foreseen that the government will divert these savings from subsidies towards spending that can foster sustainable income growth among rural households, ultimately enhancing the disposable income of the rural economy. One approach could be increased investment in rural infrastructure or the provision of incentives to improve cash flow,” as stated by analysts from Deloitte in the context of Budget expectations.

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In the rural job market, persistent challenges include underemployment and limited opportunities for skill development. The seasonal nature of agricultural work exacerbates this issue, leaving many rural workers unemployed for a substantial part of the year.

Another significant issue is the insufficient rural infrastructure. Inadequate access to vital services such as roads, electricity, healthcare, and the widespread digital divide hinder rural communities’ access to modern technology and vital information.

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Inadequate social security measures leave rural workers susceptible to economic shocks, prompting the urgent need to address issues like health insurance and pension schemes. The agrarian crisis, characterized by farmer suicides and mounting debts, necessitates immediate intervention and sustainable agricultural practices.

To tackle these persistent challenges, a comprehensive approach that encompasses various aspects of rural development is vital.

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Tailored skill development programs can enhance the employability of rural youth, promoting economic growth and self-sufficiency. Aligning these programs with local needs ensures their relevance in the job market.

Implementing sustainable agricultural practices and supporting farmers through subsidies and fair pricing mechanisms are crucial. Addressing the root causes of agrarian distress is essential for the overall well-being of rural communities.

To support the sector, the government has already made significant strides through its policies, schemes, and initiatives. Besides existing schemes such as PM Matsya Sampada Yojana, the Production Linked Incentive (PLI) scheme, and Krishi UDAN 2.0, the government recently announced the development of a Digital Public infrastructure for agriculture to enable farmer-centric solutions.

“The government needs additional measures to increase digital adoption; strengthen the food processing value chain, post-harvest infrastructure, market linkages, and regulations around land pooling; and ensure ease of doing business and investment support,” as mentioned in the Deloitte report.

“The government may take this opportunity to announce certain exemptions and extend some of the benefits. Although this is an interim budget and the actual implementation can happen only when the finance bill gets passed post the full budget announcement after the new regime takes power, the government may indicate its intentions w.r.t the relief measures in the interim budget,” stated Sujan Hajra from Anand Rathi.

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