Budget 2020 farmer-friendly; takes steps to enhance rural employment livelihood opportunities

The allocation announced by Finance Minister Nirmala Sitharaman for rural development in the Union Budget is notable. The allocation of  Rs 1.2 lakh crore for rural development for FY20–21 remains more or less at the same level as the revised estimates for 2019–20. As the rural economy is experiencing a slowdown, the government’s focus on diversified livelihood opportunities such as horticulture, poultry and fisheries is a welcome move. Intrinsically linking rural women from self-help groups to become ‘Dhanya Lakshmi’ for providing seed storage will help in creating additional income for women and also provide a service to farmers closer to the farm gate. [caption id=“attachment_1067689” align=“alignleft” width=“380”]  Representational image. AFP.[/caption] The blue revolution has received an impetus with a 25 percent increase in allocation, amounting to Rs 570 crore. Introduction of Sagar Mitras gives due recognition to the blue economy and is a positive step towards upskilling rural youth to contribute to local sustainable livelihood generation. The specific intent of the government to look at agriculture and allied sectors like animal husbandry, livestock and pisciculture to supplement rural livelihood and income is commendable. The 150 percent increase in allocation for the Scheme for Fund for Regeneration of Traditional Industries (SFURTI), amounting to Rs 465 crore will revitalise traditional industries and propel rural employment. On the other hand, the Mahatma Gandhi National Rural Employment Generation Scheme (MGNREGS) will experience a fund crunch with a massive 13 percent reduction in allocation compared to the current year’s budget. This is set to restrict the targeted person-days for 2020–2021 which stands at 270 crore, a substantial 29 percent increase from the estimated person-days for 2019–2020. The total allocation under food subsidy has significantly been reduced, including the allocation to Food Corporation of India (FCI) for funding the National Food Security Act (NFSA). To service at the same rate, the FCI may have to borrow from the government. The debt burden will be passed on to FCI instead of the government. Overall, in addition to being a farmer-friendly budget, the 2020–21 Union Budget has taken positive steps towards enhancing rural employment livelihood opportunities for the average rural household. However, limited focus on extremely low-income households (that largely benefit from schemes such as MGNREGS and NFSA) may result in the government finding it too challenging to tide over the rural economic distress. (The writer is Social Sector Leader, PwC India;  Bano Fatima, Manager, PwC India also contributed to the article) Follow full coverage of Union Budget 2020-21 here