Rural Economy – Expectations from the Union Budget

More government expenditure: On infrastructure, especially in rural areas: Economists lay greater emphasis on increasing government investment in capital expenditure to (a) generate demand in the economy and (b) create a base for future growth. More investment should be made in rural infrastructure, including roads, housing, health and education, for both short-term gains and long-term growth. It is the rural economy that has been hit the hardest in recent years due to various economic shocks and slowdown.

Higher minimum wages: The last time the central government raised the national minimum wage was in 2019. The hike was by a mere Rs 2 - from Rs 176 to Rs 178 - while an expert committee set up by it to fix a national floor rate proposed Rs 375 per day (Rs 9,750 per month) as the statutory minimum, irrespective of sectors, skills, occupations and rural-urban locations, for a family of 3.6 consumption units, and an additional house rent allowance of up to Rs 55 per day for urban workers.

Expanding MGNREGS: in addition to raising minimum wages, the allocation for the MGNREGS should also be increased to provide 100 days of work - raising it from the current average of about 45 days. Experts also advocate a similar employment guarantee scheme for the urban poor.

Expanding PM-KISAN scheme to landless agriculture labour: The PM-KISAN scheme was launched in the 2019-20 budget (in February 2019) for the small and marginal farmers, with retrospective effect, just ahead of the general elections and was later expanded to cover big farmers too. It envisages an annual income transfer of Rs 6,000 in three installments.

A Universal Basic Income (UBI) scheme: The concept of a universal basic income (UBI) was first mooted by the former chief economic adviser Arvind Subramanian in his Economic Survey of 2016-17. The basic premise was: "A just society needs to guarantee to each individual a minimum income which they can count on, and which provides the necessary material foundation for a life with access to basic goods and a life of dignity".

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