Centre likely to increase its allocation for rural schemes

The Central Government is likely to raise its allocation to the Rural Development Ministry for the current fiscal year.

Details:

• Allocation to the rural development ministry is likely to increase 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 2022/23 for various schemes in the hinterland.
• The stress in rural areas has led to increased demand for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGA).
• The rural unemployment rate was 8.04% in October.

Reason for rural areas being under stress

• Slow recovery to pre-pandemic level
• Rising Inflation
• Limited non-farm job opportunities

The declining trend of spending on Government Schemes:

• Declining fertilizer subsidies: Subsidies have been in decline over the last few years; actual government spending on fertilizers in FY2021 reached Rs1,27,921 crore.

• Reduced budget of MGNREGA: The allocation for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) went down by approximately 25% in FY22-23.
• Delayed payments for Accredited Social Health Activists (ASHA): ASHA, who are the first responders, there have been delays in salaries for up to six months.
• Less funding or wildlife habitat development: Funding under the Ministry of Environment, Forest and Climate Change has declined: from Rs165 crores (FY18-19) to Rs124.5 crores (FY19-20), to Rs87.6 crores (FY2021).