{"id":225544,"date":"2023-02-07T20:58:31","date_gmt":"2023-02-07T15:28:31","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=225544"},"modified":"2023-02-20T14:18:51","modified_gmt":"2023-02-20T08:48:51","slug":"budget-2023-24-ignores-rural-distress-tries-to-fix-demand-problem-with-supply-interventions","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/budget-2023-24-ignores-rural-distress-tries-to-fix-demand-problem-with-supply-interventions\/","title":{"rendered":"Budget 2023-24 ignores rural distress, tries to fix demand problem with supply interventions"},"content":{"rendered":"\n

Source<\/strong>– The post is based on the article \u201cBudget 2023-24 ignores rural distress, tries to fix demand problem with supply interventions\u201d <\/strong>published in The Indian Express <\/strong>on 7th February 2023<\/strong>.<\/p>\n

Syllabus: <\/strong>GS2- Budgeting<\/p>\n

Relevance:<\/strong>Rural development<\/p>\n

News- <\/strong>The article emphasises the need to prioritise allocations towards reviving consumption demand and\u00a0 spurring private investment .<\/p>\n

What are the challenges before the economy?<\/strong><\/h2>\n

Per capita incomes<\/strong> in real terms in 2021-22 are still below the 2018-19 levels and the overall growth between 2016-17 and 2021-22 is at its lowest level of 3.7 per cent for any five-year period in the last four decades.<\/p>\n

Covid only exacerbated the already fragile economic situation. The most important of these is the decline in demand,<\/strong> both for consumption and investment.<\/p>\n

The distress is far more serious in rural areas. Rural wages have stagnated <\/strong>for almost a decade now. Farmers\u2019 incomes have either declined or, at best, stagnated in the last five years.<\/p>\n

How has the budget ignored rural distress?<\/strong><\/h2>\n

In real terms, the budget has declined by 10 per cent<\/strong> at a time when the agricultural sector is going through its worst crisis.<\/p>\n

The rise in input costs<\/strong> for both energy and fertilisers is likely to get worse with the withdrawal of the fertiliser subsidy. <\/strong><\/p>\n

Even the nominal cash transfer that was provided as part of the PM-Kisan has seen a decline in allocation.<\/p>\n

\u00a0Public investment in agriculture declined by 0.6 per cent<\/strong> per annum between 2016-17 and 2020-21, the last year for which data is available.<\/p>\n

The budget for the Ministry of Rural Development is 13 per cent lower <\/strong>than the revised expenditure last year .<\/p>\n

The National Rural Employment Guarantee Scheme (MGNREGA) has seen its budget decline <\/strong>to Rs 60,000 crore as against Rs 89,400 crore in the revised estimates for 2022-23.<\/p>\n

With spiraling\u00a0inflation<\/a>\u00a0and even the cushion of free food grains having been withdrawn, rural areas are likely to face an uncertain situation.<\/p>\n

What are the other issues involved with this budget?<\/strong><\/h2>\n

The government\u2019s preference\u00a0 supply-side interventions <\/strong>even when there is excess capacity in a demand-constrained economy.<\/p>\n

It is reflected in an almost one-third increase in allocation for investment. <\/strong><\/p>\n

Given the small share of public investment<\/strong>, it is unlikely to be sufficient unless it is accompanied by the private sector increasing its investment.<\/p>\n

This will have a negligible impact on employment and domestic demand <\/strong>given the low employment elasticity of these investments.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source– The post is based on the article \u201cBudget 2023-24 ignores rural distress, tries to fix demand problem with supply interventions\u201d published in The Indian Express on 7th February 2023. Syllabus: GS2- Budgeting Relevance:Rural development News- The article emphasises the need to prioritise allocations towards reviving consumption demand and\u00a0 spurring private investment . What are… Continue reading Budget 2023-24 ignores rural distress, tries to fix demand problem with supply interventions<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[212,10500],"class_list":["post-225544","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-2","tag-indian-express","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704927572},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/225544","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=225544"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/225544\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=225544"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=225544"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=225544"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}