Ahead of full Budget likely to be presented on July 22, the Finance Ministry has asked various line ministries to come up with policy suggestions to stimulate economic growth and enhance employment opportunities in small towns and rural India.
The ministries have been asked to among other things come up with policy inputs on strengthening rural and small town economy; building social, economic and digital infrastructure in these areas; improving social equity and boosting competitiveness of MSMEs, official sources said.
The inputs need to be submitted by June 18 so that they could be considered for the Budget speech of the Finance Minister, they added.
This latest Finance Ministry move is significant as the Modi 3.0 government is expected to be populist in the upcoming Budget and increase focus on farmers, rural, urban poor and middle class in the wake of recent electoral setbacks for the ruling dispensation.
While staying on the promised fiscal consolidation glide path, the Budget could take a populist tone to arrest the impact of new social engineering —cum—freebies led reversal in certain States in the recent general elections, said economy watchers.
Also read: FinMin to Ministries/Dept: Prepare realistic Budget proposals
One of the key risks to the India growth story is the low productivity of the farm sector, which employs nearly 40 percent of country’s workforce but produces only 15 percent of output.
Indications are that the current fiscal would see a recovery in rural demand given the expectations of a normal monsoon. This may embolden the Modi-led coalition government to attempt at structural reforms in the agricultural sector to boost rural incomes.
Finance Ministry has also now invited inputs of ministries for the vision statement of the new government for the next five years on matters pertaining to their respective ministry/departments.
Suggestions have been invited from ministries on measures to increase investment, improve efficiency and effectiveness of policies/schemes/programmes implemented by the ministries/departments.
Over the past decade, the government has implemented numerous interventions aimed at fostering economic growth and boosting employment in rural areas and small towns. These initiatives span various sectors, including agriculture, infrastructure, digital connectivity, and skill development.
Pradhan Mantri Fasal Bima Yojana (PMFBY), Pradhan Mantri Krishi Sinchai Yojana (PMKSY), Pradhan Mantri Kaushal Vikas Yojana (PMKVY), Pradhan Mantri Mudra Yojana (PMMY) and PM Kisan are among the several schemes that have been launched to boost the farm sector and bolster farmer incomes besides supporting SMEs.
