A key government source told Reuters that the Indian government will likely increase its budget to the rural development ministry by 18% to Rs 1.60 lakh crore ($14.19 billion) for the current fiscal year.
India had allocated Rs 1.36 lakh crore for various hinterland schemes in 2022/23, but the stress in rural areas has increased demand for the Mahatma Gandhi National Rural Employment Guarantee Scheme, or MNREGA, the country’s only minimum job guarantee scheme that pays $2 to $3 per day.
In the fiscal year ending March 2023, the additional funds will be utilized to support programmes to create jobs and affordable housing. The official, who wished to remain unnamed because the details have not yet been made public, said.
The finance and rural development ministries in India did not react quickly to calls for comment.
The government had budgeted Rs 73,000 crore for the job scheme and Rs 20,000 crore for the housing scheme in the beginning. According to the rural development ministry’s website, it has already spent Rs 63,260 crore on the jobs program.
Following the epidemic, the Asian country’s rural areas were stressed, with rising costs and limited non-farm work options prompting more people to enroll in the government’s job plan.
According to statistics from the Centre for Monitoring Indian Economy (CMIE), a private think tank, the rural jobless rate has stayed over 7% for the bulk of the months in the current fiscal year.
According to CMIE, the rural unemployment rate was 8.04% in October.
The administration will almost certainly seek approval for these additional monies during the next parliament session, which begins on December 7.
A source familiar with the matter told Reuters that India may increase rural spending by nearly 50% to 2 trillion rupees ($24.51 billion) next fiscal year as the country seeks affordable housing and to boost jobs prior to national elections.
Finance Minister Nirmala Sitharaman is expected to present the 2023/24 budget on February 1st, the final full budget before the national elections in 2024. The fiscal year in India begins on April 1 and ends in March.
The Bharatiya Janata Party, led by Prime Minister Narendra Modi, won the national elections for the second time in 2019, making him one of the country’s most popular leaders since independence.
Modi, on the other hand, has had a mixed record in terms of economic management, and he has been chastised for rising unemployment.