(GIST OF KURUKSHETRA) INITIATIVES TO BOOST RURAL ECONOMY WHILE INCREASING INCOME AND CONSUMPTION

(MARCH-2025)

INITIATIVES TO BOOST RURAL ECONOMY WHILE INCREASING INCOME AND CONSUMPTION

Introduction

India, as a mainly consumption-driven economy, necessitates ongoing efforts to invigorate demand, investment, and rural economic development. The Union Budget for 2025-26 introduces various initiatives aimed at augmenting rural income, elevating agricultural productivity, and fortifying rural infrastructure, all while ensuring fiscal equilibrium. This article delves into the diverse measures presented in the budget to uplift the rural economy, increase income, and stimulate consumption.

1. Current Economic Landscape and the Need for Advancement

(i) Fiscal Objectives and Growth Forecasts

Revenue Generation Goals:

The government is targeting to raise ₹42.70 lakh crore in revenue for FY 2025-26, reflecting an 11% increase from the ₹38.53 lakh crore goal for FY 2024-25.
Direct tax collection objective: ₹25.20 lakh crore (+ 14.4%).
Indirect tax collection objective: ₹17.50 lakh crore (+ 10.4%).

GDP Growth Forecasts:

First Advance Estimate (2024-25): 6.4% GDP growth.
RBI Projection (2024-25): 6.6% growth.
Anticipated GDP Growth (2025-26): 6.7%.

(ii) Challenges Hindering Growth

Global Influences: Tariff modifications, protectionist measures, and US Federal Reserve interest rates impacting worldwide markets.
Domestic Influences: Deteriorating GDP growth (5.4% in Q2 2024-25).
A need to boost consumption, investment, and exports.

Budget Initiatives to Fortify the Rural Economy

(i) Agricultural and Rural Development Investments

Total Funding for Farmers: ₹2.66 lakh crore (+ ₹1,000 crore from last year).
Fertilizer Subsidy: ₹1.67 lakh crore (+ ₹3,000 crore).
Agriculture Development Scheme: ₹8,500 crore (+ ₹947 crore).
Livestock and Dairy: ₹1,050 crore (+ from ₹369 crore).

(ii) Enhancing Farmers’ Income

(a) Kisan Credit Card (KCC) Loan Limit Increase

Loan cap increased from ₹3 lakh to ₹5 lakh.
Interest concession:
2% general subsidy.
3% additional subsidy for timely repayment (effective interest rate 4%).
Beneficiaries: 7.75 crore farmers.

(b) Pradhan Mantri Dhan-Dhanya Krishi Yojana

Focus on 100 low-yield districts.
Financial assistance for irrigation, storage, and improved seed varieties.
Expected beneficiaries: 1.7 crore farmers.

(c) Five-Year Missions for Agricultural Advancement

Cotton Technology Mission
Advocates for long-fiber cotton varieties.
Aims to enhance cotton quality and processing.
Pulses Self-Sufficiency Mission
Focus on pigeon peas, black lentils, and other pulses.
100% procurement security for farmers by NAFED & NCCF.

Fisheries and Self-Reliance in Agriculture:-

(i) Special Economic Zones (SEZs) for Fisheries

India’s seafood sector is valued at ₹60,000 crore.
SEZs for Fisheries to promote aquaculture and job creation (benefiting 2.8 crore fishermen).

(ii) Self-Sufficiency in Urea Production

A new urea facility in Namrup, Assam (12.7 lakh metric tons/year capacity).
Decreased reliance on imports.

Enhancing Rural Employment and Consumption

(i) Empowering Women Economically

Term Loans for SC/ST Women Entrepreneurs:
₹2 crore loan limit for 5 lakh women entrepreneurs.
Saksham Anganwadi and Poshan 2.0 Mission: ₹21,960 crore (+ ₹1,889 crore).
Mission Vatsalya: ₹1,500 crore for women’s welfare initiatives.

(ii) Support for Small Enterprises and Street Vendors

PM SVANidhi Yojana Expansion

Increased loan limits for street vendors.
Fostering financial inclusion and formalization of enterprises.

(iii) Infrastructure and Logistics Improvement

Conversion of 1.5 lakh rural post offices into logistics centers.
Cost-effective logistics solutions for MSMEs and farmers.
1.5 lakh crore interest-free loans to states for infrastructure development.

Conclusion

The Union Budget 2025-26 has set forth ambitious measures to expedite rural economic growth, enhance farmers’ income, and augment employment opportunities in rural areas. With increased agricultural investments, MSME reforms, and a substantial emphasis on empowering women, the government is tackling critical economic challenges while promoting sustainable progress. If effectively executed, these initiatives can facilitate inclusive growth and bolster India’s status as a global economic powerhouse by 2047.