Gist of Kurukshetra March 2023 Issue: Budget for Rural India 2023-24

Kurukshetra Magazine is a vital source of study material for the UPSC IAS exam. It is a monthly magazine that gives information about important government schemes and programmes in various sectors. Kurukshetra is an authentic source of information for the UPSC Exam. Here, we provide the Gist of Kurukshetra, exclusively for the IAS Exam.

TABLE OF CONTENTS

1. Visionary Budget for Making India a Developed Nation
2. Development Directions in Budget
3. Efficient and Inclusive Healthcare Ecosystem
4. Boosting Agriculture and Rural Development
5. MSME Sector on Growth Trajectory
6. Inclusive Development in Education
7. Trade and Industry
8. Development of Tourism Sector

Chapter 1: Visionary Budget for Making India a Developed Nation

Introduction

• The Union Budget of 2023-24 is the first budget of Amrit Kaal that aims to transform India into a developed country.
• The emphasis has been laid on promoting the agriculture sector by linking agriculture with modern practices in order to provide extensive benefits to farmers and those engaged in agriculture and allied activities.

Budgetary Provision for Agriculture and Allied Sector: 

• The total budgetary allocation of the Ministry of Agriculture and Farmers’ Welfare is Rs. 1.25 lakh crore.
• The credit target of Animal Husbandry, Dairy, and Fisheries has also increased to 20 lakh crore.
• A substantial increase has been made in the Digital Agriculture mission and Rs. 450 crores has been allocated for it. Notably, it’s a huge increase from Rs 70 crores in 2022-23.
• Moreover, digital infrastructure will be created to promote the agri-tech industry and start-ups and develop farmer-centric solutions.
• Rs. 2516 crores investment has been proposed to initiate the computerization of 63000 Primary Agricultural Credit Societies.
• To promote natural farming, approximately Rs 460 crores have been allotted. The government will encourage one crore farmers to adopt natural farming and for this 10000 bio-input resource centres will be established at the national level.
• Around 23000 crores have been allocated in Budget 2023-24 to enable farmers to continue availing the benefits through Kisan Credit Cards (KCC).
• A targeted investment of Rs 6000 crores will be made through a sub-scheme Pradhan Mantri Matsya Sampada Yojana.
• Ten thousand new Farmer Producer Organizations will be established in India and Rs. 955 crores has been proposed.
• For food and nutritional security, budgetary allocations have increased to Rs 1623 crores.
• Rs 60000 crores have been sidelined for PM Kisan Samman Nidhi.
• Rs 500 crores have been set aside for agriculture startups for the next five years.
• The budget provision for agriculture has increased from Rs. 1100 crore to 1800 crore
• The Atmanirbhar Clean Plant Programme will be launched with an outlay of 2,200 crores (in the next 7 years till 2030) to boost the availability of disease-free, quality planting material for high-value horticultural crops.
• 500 new waste-to-wealth plants will be established to promote a circular economy at an investment of Rs 10,000 crore under the GOBARdhan scheme.
• A provision of Rs. 5300 crores have been made for Bhadra Project to provide sustainable micro irrigation and to fill up surface drinking water tanks.
• Agriculture Infrastructure Fund and Fasal Bima Yojana are also benefiting farmers and their coverage has also increased.

For more details on Budget 2023-24, read here: Union Budget 2023 Summary

Chapter 2: Development Directions in Budget

Introduction

• The agriculture sector in India is growing at an average annual growth rate of 4.6 % during the last six years. It grew at 3.0% in 2021-22 as compared to 3.3% in 2020-21.
• The Budget speech has emphasized seven priority areas:
  • Inclusive development
  • Connecting targeted clients and reaching the last mile
  • Boosting infrastructure and investment
  • Bringing in innovation and technology for unleashing productive potential
  • Addressing climate change by focusing on green-growth-led strategic actions
  • Consolidating the youth power in economic growth
  • Strengthening the financial sector for effective financial inclusion 

Figure: Expenditure and Budget Allocation for Select Schemes

Source: Kurukshetra

Rural Employment Programmes

• Union Budget has allocated Rs. 60000 crores to MGNREGA and approximately Rs 14129 crore to National Rural Livelihood Mission. However, both schemes have witnessed a reduction of 17.8% and 0.8% respectively.
• There is also a proposal to revamp the credit guarantee scheme of Micro, Small, and Medium enterprises through an additional equity infusion of Rs 9000 crore. It will enable the disbursement of collateral-free guaranteed credit of Rs. 2 lakh crores.
• There is also an emphasis on the mobilization of more self-help groups for the creation and operation of the rural warehouse and other agri-logistics. It would help in improving the rural livelihood and incomes by converging rural development efforts with agri-infrastructure.

Also read: NRLM – National Rural Livelihood Mission (Deendayal Antyodaya Yojana)

Measures for Agri-development

The budget has proposed many methods to increase production, productivity, and farm incomes through active participatory action towards:

• Comprehensive water planning
• Promoting natural and organic farming
• Ensuring balanced use of fertilizers
• Promoting and nurturing Farmer Producer Organizations (FPOs)
• Mapping and geo-tagging agri-logistic
• Construction and operation of community-led village storage
• Connecting unconnected areas and sustaining a national cold supply chain
• Integrating e-negotiable warehouse receipts with e-NAM
• Developing fodder farms through MGNREGA
• Promoting fisheries sector
• Doubling milk-processing capacities
• Utilizing enhanced farm credit

Leveraging Digital Infrastructure

Digital infrastructure in agriculture has a tremendous potential to enable relevant, timely, and adequate information for crop planning and crop health; enhanced access to farm inputs like credit; quick and effective damage assessment; market supply; etc.

Encouraging nutri-cereals

The UN has announced 2023 as an International year of millets and to acknowledge this Budget 2023-24 has made significant provisions for promoting millet production and consumption.

Strengthening Cooperative 

The Budget 2023-24 has reposed great faith in the cooperatives. 

For more details on Cooperatives, read here: Gist of Kurukshetra January 2023 Issue: Cooperatives

Conclusion

The initiatives and programmes announced in the Union Budget 2023 have the required potential to re-orient the rural economy. It also requires ensuring innovative and participatory investment opportunities, community participation, and research and development.

Chapter 3: Efficient and Inclusive Healthcare Ecosystem

Introduction

• Healthcare has been a priority for the past few years and there has been a steady increase in the budgetary allocation for this sector.
• There is an increase of 3.4% compared to the Budget 2022-23. A total of Rs. 89155 crores have been allocated to the Ministry of Health and Family Welfare.
• Notably, the budgetary allocation for 2021-22 was Rs 73931.77 crores.
• The Indian government is committed to building an inclusive, accessible, affordable, efficient, and modern healthcare ecosystem in the country.
• India is referred to as the pharmacy of the world. It is also emerging as a medical tourism hub on the global healthcare map.
  • The medical tourism industry of India is estimated to be $9 billion, making it the 10th biggest global medical tourism hub.
• The Budget documents have focused on the following aspects:
  • Investing in research and development
  • Modernizing healthcare infrastructure
  • Use of digital technology for healthcare services
  • Increasing trained medical professionals

Highlights of Budget related to Healthcare

• 157 new nursing colleges will be created.
• An amount of Rs 2980 crores has been assigned to the Department of Health Research.
• The budgetary allocation for ICMR has gone up by 7.4%. Some labs will be open for research by public and private medical schools.
• A mission to eliminate sickle cell anaemia by 2047 will be initiated with a focus on raising awareness and conducting universal screening of 7 million people between the ages of 0 to 40 years.
• The budget allocation for National Health Mission has gone up from Rs 28974 crores in 2022-23 to Rs 29085 crores in 2023-24.
• The National Digital Mission has also received a boost in funding from Rs 140 Crore in 2022 to Rs 341 crore in 2023.
• The allocations for Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana have increased by 12% (to Rs 7200 crores).
• The budget allocation for AYUSH Ministry has also increased by 28%.
• Rs 6825 has also been allocated for the establishment of 22 new AIIMS.
• The government will also support the implementation of specialized multidisciplinary courses in medical devices to ensure a skilled workforce for advanced medical technology.
• A national governance policy will also be introduced to facilitate access to anonymous data.

Also read: National Ayush Mission

Conclusion:

The budget announcements are comprehensive and forward-looking, giving the sector its well-deserved attention.

Chapter 4: Boosting Agriculture and Rural Development

Introduction

• In India, two-thirds of the total population and more than 70% of the workforce reside in rural areas.
• In order to become a $5 trillion economy by 2025 and the third-largest economy in the world by 2027, it is important to focus on the development of rural areas.
• The Ministry of Rural Development has two departments namely Rural Development and Land Resources.

Budgetary allocation for rural development

• The Ministry of Rural Development is provided with the seventh highest allocation among all ministries in the Union Budget 2023-24.
• Its allocation has increased from Rs 61,864 crore in 2013-14 to approximately Rs 1,60,000 crore in 2023-24. This implies a linear growth rate of 10.32% per annum.
• However, the budget expenditure for the Department of Land Resources came down by 3.93 % during the last decade.

Major Schemes under the Ministry of Rural Development

• There was a growth rate of 7.84% per annum in the last seven years for all centrally sponsored schemes for rural development.
• In 2022-23 it came down by 13.02% due to unusually high expenditure on Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) during the COVID-19 pandemic.
  • The fall in allocation can be attributed to lower demand for work due to strong agricultural growth and a post-pandemic recovery resulting in better employment opportunities.
  • In 2023-24, it accounts for nearly 38% of total expenditure on all centrally sponsored schemes of rural development.
• In terms of allocation, MGNREGS is followed by PM Awas Yojana-Gramin (35%), PM Gram Sadak Yojana (12%), and National Rural Livelihood Mission (9%).

Figure: Budget Allocation to Centrally Sponsored Schemes for Rural Development

Source: Kurukshetra

• Pradhan Mantri Awas Yojana Gramin (PMAY-G)
  • Originally launched as Indira Awas Yojana, PMAY-G was revamped in 2016 with the objective to provide around 3 crore houses to eligible rural households by 2024.
  • Approximately 2.83 crores have been sanctioned and 2.14 crore houses have been completed (on February 2023).
• Pradhan Mantri Gramin Sadak Yojana (PMGSY)
  • The main objective is to provide all-weather road connectivity to un-connected rural habitations.
  • The scheme has been allocated Rs 19000 crore in 2023-24.
• National Rural Livelihood Mission (NRLM)
  • Renamed Deendayal Antyodaya Yojana – National Rural Livelihood Mission(DAY-NRLM) aims to create diversified and gainful self-employment for the rural poor.
  • It also aims to strengthen Self Help Groups (SHGs).
• National Social Assistance Programme (NSAP)
  • It is a social welfare programme that comprises many sub-schemes for the vulnerable section of society like the elder population, widows, unemployed, etc.
• Shyama Prasad Mukherji Rurban Mission (SPMRM)
• • It was launched on 21st February 2016 with the vision to deliver catalytic interventions to rural areas on the threshold of growth.

Schemes for the Department of Land Resources

• The department is allocated Rs 2419 crore, which is 92% higher than the revised estimate of 2022-23.
• The department implements two major schemes:
  • Integrated Watershed Development component of Pradhan Mantri Krishi Sinchayee Yojana.
  • Digital India Land Records Modernization Programme.

Budgetary Allocations for Agriculture

• The budgetary allocation for the Ministry of Agriculture and Farmers’ Welfare went up from Rs 26071 in 2013-14 to Rs 125036 in 2023-24.
• It reflects a growth of 17.20% per annum during the last decade.
• The budget allocation for the Department of Agriculture, Cooperation, and Farmers’ Welfare witnessed a growth rate of 18.12 % in the period of 2013 to 2023.
• The budget allocation for the Department of Agriculture Research and Education went up at a rate of 6.70% during 2013-2023.
• Income support is also provided to farmers through the PM KISAN yojana.
• Moreover, Agriculture Accelerator Fund will also be established to encourage agri-startups.

Way Ahead

• It is important to promote economic activities through various incentives in rural areas.
• Public expenditure on social infrastructure should be prioritized for sustainable and inclusive growth.
• Socially and economically backward sections should be uplifted in order to bridge the gap between haves and have-nots.
• A joint effort of government, private sector, and self-help groups is vital for improving the quality of rural life.

Also read: Government Schemes to Protect Interests of Farmers and Boost Agriculture Sector

Chapter 5: MSME Sector on Growth Trajectory

Introduction

• The contribution of the MSME sector to the overall Gross Value Added (GVA) increased from 29.3% in 2018-19 to 30.5% in 2019-20. However, it fell to 26.8% in 2020-21 due to the pandemic.
• The MSME sector accounts for more than 90% of industrial units, 40% of total manufacturing output, and 35% of India’s exports.
• The MSME sector is the largest employer after agriculture in rural areas and is thus crucial for socioeconomic development of the rural populace.

Challenges for MSMEs

• MSMEs grapple with situations like low levels of technology use.
• They have limited access to inputs and credit facilities.
• They have an unfavourable market environment and fall outside the ambit of formal business and labour regulations.
• Rural MSMEs witness more locational disadvantages as compared to their urban counterpart.
• The MSME sector was severely impacted by the COVID-19-induced lockdown. They witnessed supply chain disruptions, reduced demands, loss of revenue, etc.

Measures taken by the Government

• In order to moderate the economic impacts of the pandemic on MSMEs, the government modified the definition of MSMEs.
• Provided financial assistance like equity infusion, and waived the global tender requirement for procurement of up to Rs 200 crore.
• The Udyam portal was also launched. MSME registrations on Udyam Portal crossed the one crore mark on August 2022.
• In order to transcend MSMEs to formal institutional networks and gain from the schemes and initiatives central government took various measures. For example, registration of unorganized workers on e-shram portal, SVANidhi scheme for street vendors, etc.
• To digitally empower the sector, various initiatives like MSME Sampark, MSME Sambandh, MSME Samadhaan, Udyamimitra, etc. were launched.
• Open Network for Digital Network will further strengthen its market.
• As per the Economic Survey 2022-23, 57% of the total business on GeM was contributed by MSME units. Moreover, female entrepreneurs have contributed nearly 6%.
• Some other initiatives include One District One Product, TRIFED (for onboarding Tribal artisans), Emergency Credit Line Guarantee Scheme, etc.

Also read: PM SVANidhi – PM Street Vendor’s Atmanirbhar Nidhi

Budgetary Provisions for MSMEs in 2023-24

• The budget has infused Rs 9000 crores in the corpus of the Credit Guarantee Fund Trust for Micro and Small Enterprises. It will enable additional collateral-free credit of Rs 2 lakh crores to MSMEs with a reduced cost of credit by 1%.
• A National Financial Information Registry will be established to serve as a national repository of financial and ancillary information and enable an efficient flow of credit.
• The limit for presumptive taxation is also increased for micro-enterprises with a turnover of up to Rs 2 crore to Rs 3 crore. 
• The government will return 95% of the forfeited amount related to the bid or performance of security in cases of failure of contract due to COVID-19. This will provide relief to pressurized MSMEs.
• Apart from the above measures, National Logistics Policy aims to bring down the logistics 14% to 8% of GDP. It would further encourage more MSMEs to use tech-powered logistics services.
• The 5-year rollout of the World Bank assisted Rs 6000 crore Raising and Accelerating MSME Performance (RAMP) would help MSMEs become more resilient, competitive, and efficient.
• A special package of PM Vishwakarma Kaushal Samman (VIKAS) is also announced to integrate traditional craftsmen and artisans with MSME supply chains and improve the quality, scale, and reach of their products.

Way Ahead

• The budgetary allocations should be duly executed.
• A robust mechanism should be designed to sensitize entrepreneurs about the available provisions and features.
• Special Gram Sabha like Udyam Gram Sabha should be conducted at the panchayat level to encourage aspiring entrepreneurs.

Chapter 6: Inclusive Development in Education

Introduction

• The education sector is going through a rapid transformation with the implementation of the National Education Policy (NEP) 2020.
• The Budget 2023-24 aims to promote an equitable and inclusive education system across the country.
• In India, access to school is now recognized as a non-negotiable part of a child’s right to education. 

Status of Education

• The Gross Access Ratio in 2021-22 at the primary level is 97.49%, 97.01% at the upper primary level, and 95.48% at the secondary level.
• According to Unified District Information System for Education Plus (UDISE+), approximately 26.5 crore children are enrolled in schools.
• Moreover, the enrollment of children with special needs stood at  22.67 lakhs in 2021-22.
• Initiatives taken in the year 2022-23 include PM SHRI, National Curriculum Framework for Foundational Stage, disability screening app called PRASHAST, National Credit Framework, Balvatikas, etc.

Budgetary Provisions in 2023-24

• The budgetary allocation for the education sector is approximately Rs. 112899.47 crores. The Department of School Education is allotted Rs. 68804 crores and the Department of Higher Education is allotted Rs. 44094 crores.
• The budget has followed on following key areas:
  • Teachers’ Training
    • • District Institutes of Education and Training will play a crucial role in in-service teachers getting high-quality training. They will be made centres of excellence for research and dissemination of best practices in teachers’ education.
  • National Digital Library for Children and Adolescents
    • A national digital library for schools will be developed with the work of reputable Indian and international authors.
    • States will be urged to establish physical libraries at the ward and panchayat levels.
• In the next three years, the government will appoint nearly 38800 teachers and support personnel for 740 Eklavya Model Residential Schools that will provide education to 3.5 lakh tribal children.
• There is an increase in budget allotment for Samagra Shiksha, PM SHRI, the World Bank-aided STARS scheme, New India Literacy Programme, etc.
• Provisions for Higher Education:
  • Three Artificial Intelligence Centres of Excellence will be established in prestigious educational institutions to “Make AI work for India a reality”.
  • One of the IITs will get equipment and seeds from Lab Grown Diamonds for a period of five years.
  • 100 labs for developing apps using 5G services will be established in Higher Education Institutions.
  • Multidisciplinary courses in medical devices and programmes to promote research in pharmaceuticals will be introduced to strengthen the “Jai Anusandhaan” motto.

Conclusion

The Union Budget 2023-24 is a step to augment and further the efforts to achieve Sustainable Development Goal 4 (Quality Education). 

Chapter 7: Trade and Industry

Introduction

• In the wake of the Russia-Ukraine War, the COVID-19-induced lockdown in China, and the global economic slowdown, Annual Budget 2023-24 is of great significance.

For more information on the status of the Indian Economy, read here: Highlights of Economic Survey 2023

Impact of Budget on Trade and Industry

• The Union Budget 2023-24 has laid a great thrust on ‘Green Growth’. For instance, the National Green Hydrogen Mission with an outlay of Rs 19,700 crores will facilitate the transition to a low-carbon economy.
• The agriculture credit target will be enhanced by Rs 20 lakh crore with a focus on animal husbandry, fisheries, and dairy.
• A programme to promote research and development in pharmaceuticals through Centres of Excellence is also proposed.
• One hundred critical transport infrastructures for last-mile connectivity have been identified and an investment of Rs 75000 crore has been provided in this context.
• An Urban Infrastructure Development Fund (on the lines of the Rural Infrastructure Development fund) for Tier 2 and Tier 3 cities will be established. It will be managed by National Housing Bank.
• Nearly 39000 compliances have been reduced to promote Ease of Doing Business. Additionally, 3400 legal provisions have been de-criminalized.
• Around 500 new ‘Waste to Wealth’ programmes will be established under the GOBARdhan scheme with a total investment of Rs 10000 crore.
• The auto sector will be benefitted from the Vehicle Scrappage Policy and reduction to 0% of the customs duty on specified capital goods/machinery for the manufacture of lithium-ion cells.
• Mobile phone production in India has benefitted from Phased Manufacturing Programme. There were 31 crore units valued at over Rs 275000 crore in the financial year 2022-23.
• Basic customs duty is reduced from 5% to 2.5% on acid-grade fluorspar in order to make the domestic fluorspar chemical industry competitive.
• Concessional Basic Customs Duty is also being provided for ferrous and copper scrap.

Conclusion

The budget will not only improve domestic manufacturing and services but will also incentivize green growth methods, thus emphasizing India’s commitment to achieving net zero emissions by 2070.

Chapter 8: Development of Tourism Sector

Introduction

• According to the United Nations World Tourism Organization, tourists are people travelling for leisure and other purposes from their usual place of residence to their destination for at least one night and not more than one year and return back to their place of origin.
• Tourist Generating Regions are the regions where the tourist journey starts and ends. They are traditionally high-income regions as the population has some discretionary income to engage in travelling and leisure activities.

Figure: Top 10 Source countries for Foreign Tourist Arrival in India

Source: Kurukshetra

Details

• The tourism sector suffered the most due to the COVID-19 pandemic. The year 2022 saw the gradual opening of the sector.
• The government of India launched ‘Dekho Apna Desh’ to promote domestic tourism.
• Outbound tourism from India witnessed an annual growth rate of 17.3 % (8.55 million) in 2021 whereas domestic tourism stood at 677.3 million with an annual growth rate of 11%.

Budgetary provisions for Tourism Sector

• The budget allocation for the sector is Rs 2400 crore. 
• Rs 1412 has been allocated to Swadesh Darshan Scheme.
• Rs 105 crore has been allocated for training and skill development and building capacity in the sector.
• Rs 250 crore has been allocated for the PRASHAD scheme.
• The budget has also announced the development of 50 new tourist destinations in the country.
• Infrastructure and investment are one of the seven priorities (Saptarishi) in the budget which will also have a role in the Tourism industry.
• Rural tourism is also being promoted through the Vibrant Village Programme.
• The cruise tourism potential is yet to be unveiled in India with a vast coastline of 7500 km. In this direction, MV Ganga Vilas is a great step.
• Budgetary allocation of approximately Rs 3400 crore to the Ministry of Culture will also complement tourism in India.

Conclusion

Tourism has great potential for the economy of the country. It can spearhead growth, generate employment, improve people’s lives and protect the environment if properly managed.

Also read: Gist of Kurukshetra June 2022 Issue: Rural Tourism

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