Will the Union Budget Proposals Help Revive the Rural Economy?

It offers benefits to the well-off instead of the farm sector that needed investment to overcome a crisis

- HIMANSHU

That the Indian economy is going through a difficult phase is no longer a matter of speculation. The Economic Survey not only made that clear, but went further by offering evidence of a decline in earnings of the self-employed in the last six years. For regular and casual workers, wages have been declining for almost a decade, leaving little doubt whether India's slowdown is cyclical or structural.

This isn't the first such episode for this government; its first term saw sharper declines in India's GDP growth rate between 2016-17 and 2019-20, even before the pandemic hit. Back then, the distress was driven by rural pain. Two years of back-to-back drought followed by demonetization and the GST rollout hurt an already-fragile rural economy. The pandemic made it worse. The current slowdown also has roots in rural distress, which has extended for almost a decade now. This was bound to spill over to the urban economy and hurt overall demand.