In order to create demand as well as development in the rural economy to increase discretionary spending and boost consumption, the Union Budget has unveiled a slew of measures ranging from housing to job creation to improving connectivity and overall infrastructure.

Accordingly, the outlay for rural development at Rs 2.66 trillion has seen an increase of 11.2% compared to the revised estimates (RE) of FY24.

Analysts said that the measures announced in the Budget would boost consumer demand in the hinterland, which is already showing green shoots of revival.

The PM Garib Kalyan Anna Yojana will now stand extended for five years, benefiting more than 800 million people. The outlay compared to the RE, has  however seen a slight decline of 3.3% at Rs 2.05 trillion.

Further, an additional 30 million houses under the PM Awas Yojana will be constructed in rural and urban areas across the country. The outlay for the PM Rural Awas Yojna at Rs 54,500 crore has seen  an increase of 70%.

With a focus on tribal areas, the Pradhan Mantri Janjatiya Unnat Gram Abhiyan has been launched to benefit 63,000 villages and 50 million tribal people. This initiative aims to provide saturation coverage for tribal families in tribal-majority villages and aspirational districts.

The Phase-4 of the Pradhan Mantri Gram Sadak Yojana (PMGSY) has also been announced, which will provide connectivity to 25,000 rural habitations that have become eligible due to population increases. The outlay here as seen an increase of 12% at Rs 19,000 crore.

In 2019, the government had launched PMGSY-3 through routes and major rural links connecting habitations such as gramin agricultural markets, higher secondary schools and hospitals. Out of the sanctioned 115,683 km of roads, 82,839 km has been completed under phase-3 of the programme, according to official data.

The government is expected to expand the definition of rural habitations in phase-4 of the project to include even smaller settlements. Currently, PMGSY aims to provide connectivity to the eligible unconnected habitations in rural areas with a population of 500 in the plains, and 250 in hilly areas, desert areas, tribal areas and certain tribal and backward districts.

“Its heartening to see the Budget expand from agricultural allocations to increased focus on skills, employment generation, youth, housing, sanitation etc to build human capacity and societal resilience,” Ajay Jhakar, chairman, Bharat Krishak Samaj, said.

According to Kushal Kumar Singh, partner at Deloitte India, “Many new initiatives such as the focus on water treatment, sewage treatment and solid waste management projects in 100 cities, development of additional industrial parks, and expanding PMGSY to another 25,000 habitations could be game-changers in the medium to long term”.

PMGSY is now in its 24th year of operation. The interim Budget presented in February had already provided a Rs 16,600 crore central outlay for the scheme, which is currently in its third phase.

The road connectivity project for left wing extremism affected areas is also underway. More than 99% of the work on PMGSY-I and PMGSY-II has been completed.

Spending on the scheme has consistently undershot Budget estimates. Barring 2021-22, the budgeted amount since 2016-17 has been roughly Rs 19,000 crore every year. A report by the standing committee on rural development, laid in Parliament in July last year, expressed concerns over unspent funds and noted that the need of the hour was expeditious utilisation of available finances for faster completion of projects, particularly in states that were lagging.

Apart from such schemes, land-related reforms and actions will also be undertaken, which will cover land administration, planning and management. These will be incentivised for completion within the next three years through appropriate fiscal support.

Rural land related actions will include, assignment of unique land parcel identification number (ULPIN) for all lands, digitisation of cadastral maps, survey of map sub-divisions as per current ownership, establishment of land registry, and linking to the farmers registry. These actions will also facilitate credit flow and other agricultural services.