Indian Government Increases Rural Development Ministry Budget by 12%

The Indian government has announced an uplift in funding for the rural development ministry for the financial year 2024-25, marking a 12% rise to Rs 1.77 lakh crore from the previous year's Rs 1.57 lakh crore. While this increase appears substantial, it represents only a modest 3% rise from the mid-year revised estimates of Rs 1.71 lakh crore.

During the interim budget session in the Indian Parliament, Finance Minister Nirmala Sitharaman spotlighted the enhanced allocation for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), which now stands at Rs 86,000 crore for 2024-25. This figure is approximately 43% higher than the Rs 60,000 crore budgeted in the last fiscal period.

However, it is important to note that the actual expenditure on the MGNREGS in the last financial year matched the current allocation of Rs 86,000 crore, suggesting a steady state in funding rather than an increase.

Historical Spending Trends

Historical data reveals fluctuations in actual spending versus initial allocations for the MGNREGS. For instance, while Rs 73,000 crore were earmarked for the scheme in 2022-23, the government ended up spending Rs 90,805 crore. A similar pattern was observed in 2021-22 and 2020-21, with expenditures reaching Rs 98,467.85 crore and Rs 1.11 lakh crore respectively, both well above the initial allocations.

The MGNREGS, a cornerstone of rural development in India, mandates 100 days of paid employment per financial year to a member of every rural household eager to perform unskilled manual labor, with a specific emphasis on empowering women by reserving at least one-third of these jobs for them.

Pradhan Mantri Awas Yojana-Gramin

In a pre-election pitch, the Finance Minister has also pledged the construction of an additional two crore homes under the Pradhan Mantri Awas Yojana-Gramin (PMAY-G) over the span of five years. The budget allocated for this scheme stood at Rs 54,500 crore. The previous year saw a similar provision of Rs 54,487 crore for the PMAY(G), though the revised estimate came down to Rs 32,000 crore, indicating a significant underspend.

Sitharaman has promised to expand the 'Lakhpati Didi' initiative, with a goal to lift the target from two crores to three crores. Part of the Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM), this initiative aims to amplify household incomes of self-help group members to Rs 1 lakh per annum through diverse livelihood ventures and interventions within the value chain.

For the National Livelihood Mission-Ajeevika, the budgetary provision is set at Rs 15,047 crore, showing a 6% increase from last year's allocation of Rs 14,129.17 crore. The revised estimate for this initiative also mirrored last year's allocation.

However, the Pradhan Mantri Gram Sadak Yojna (PMGSY) saw a decrease in funds, with the budget allocation declining to Rs 12,000 crore for 2024-25, from the Rs 19,000 crore that was assigned in the previous year. The revised expenditure for the PMGSY was Rs 17,000 crore.

budget, rural, development