ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Agriculture and Rural Areas in Budget 2023–24

A Need for Comprehensive Approach for Transformation

Agriculture and rural incomes are under stress for several reasons. The budget has given importance to agriculture and allied activities and strengthening their cooperative model, digital infrastructure, and the production of millets. These are steps in the right direction, but much more needs to be done. There is a need to change the narrative towards more diversified, high-value production, food systems approach for nutrition-sensitive agriculture, inclusion and sustainable agriculture.

Indian agriculture has done well with an average annual growth rate of 4.6% in the past six years (GoI 2023). It has been resilient with 3.3% and 3.5%, respectively during the pandemic years of 202021 and 202122, and the projected rate is 3.3% for 202223. However, agriculture and rural incomes are under stress for several reasons. The incomes of farmers from cultivation, in constant prices, have declined over time. Globally, fertiliser and food prices increased due to the UkraineRussia war, but have been rising even before the war due to high global liquidity. The rural areas have seen a decline in the purchasing power, along with a negative real rural wage growth due to high inflation (GoI 2023).

The weak rural demand has been a concern for fast-moving consumer goods and other durables, although we see a few green shoots now. The recovery from the pandemic looks k-shaped. While the big companies and large part of the corporate sector could survive, the informal workers, migrants, micro, small and medium enterprises (MSMEs), etc, have suffered. Demand for work under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) remains high, reflecting a continued stress in the rural areas.

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Published On : 20th Jan, 2024

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