As India gears up for parliamentary elections in April-May, Prime Minister Narendra Modi’s major development plank is the Viksit Bharat Sankalp by 2047 (developed India by 2047). He has also said that the only “castes” that matter are the poor, farmers, women, and youth. While opposition parties are stuck with caste census promises, PM Modi is riding on the promise of Ram Rajya, an inclusive and sustainable growth model. More confident than ever, Modi has set a goal of winning even more seats in this election than in the last one. His confidence stems from the performance of his government over the last 10 years, and the promise of Viksit Bharat by 2047.
There is no doubt that the Modi government has done quite well in the post-Covid recovery period. The Economic Review by the Department of Economic Affairs points out that India will register a more than 7 per cent growth in GDP for three consecutive years — from FY22 to FY24, perhaps even in FY25. This is much higher than the global average as well as the growth in most G20 countries. But for inclusive growth, we need to dive a little deeper and see what has happened in the agriculture sector, which engages the largest segment of the working population (45.8 per cent in 2022-23, as per PLFS). In this context, let us compare the 10 years of the Modi government with the 10 years of the UPA government on certain key parameters.
On the macro-economic front, India’s real GDP grew by 5.9 per cent per annum between FY15-FY24 vis-à-vis 6.8 per cent achieved during FY05-FY14. On CPI inflation, the Modi government wins hands down with 5.1 per cent versus 8.1 per cent in the UPA period. Multidimensional poverty fell from 29.2 per cent in FY14 to 11.3 per cent in FY23 as per the NITI Aayog. Further, the Economic Review states that the unemployment rate has declined drastically from 6 per cent in FY18 to 3.2 per cent in FY23 (PLFS, MoSPI), although ILO data still shows unemployment is at more than 7 per cent. The two differ due to differences in definition. The agri sector, contributing about 18 per cent of India’s gross value added (GVA) in FY24, is likely to register a growth rate of just 1.8 per cent in FY24 as per first advance estimates, a major drop from 4 per cent in FY23. If we count this, the decadal growth in agri-GDP under the Modi government is likely to be roughly the same (3.5 per cent) as under the UPA government. It reminds us of the proverbial Hindu rate of growth of 3.5 per cent for 20 years.
The reverse migration during Covid-19 has increased the share of agriculture in the labour force, up from 42.5 per cent in 2018-19 to 45.8 per cent in 2022-23 (PLFS data). This is not a good sign. No wonder, during the Modi 2.0 period, real wages in farming as well as in non-farm rural operations have come down marginally. This raises questions about the efficacy of the inclusive growth model, as well as the promise of doubling farmers’ real incomes by FY23.
Moving forward, the big issue is what should be the strategy to achieve inclusive and environmentally sustainable growth in Amrit Kaal? The short answer is reorienting doles/subsidies towards sustainable development expenditures and fiscal consolidation. In the interim Union budget for FY25, the Finance Minister has provisioned an expenditure of Rs 47.6 trillion for FY25, and bringing down the fiscal deficit from 5.8 per cent of GDP in FY24 (RE) to 5.1 per cent of GDP in FY24. This is a good move, although the FRBM Act asks for the fiscal deficit to be 3 per cent of GDP. So, there is still a long way to achieve optimal fiscal consolidation.
In the agri-food-rural space, the government has pruned the fertiliser subsidy to Rs 1.64 trillion for FY25 against revised estimates (RE) of Rs 1.88 trillion (FY24). The other three major welfare subsidies/doles are food subsidy of Rs 2.05 trillion, MGNREGA at Rs 860 billion, and PM-KISAN at Rs 600 billion in the FY25 budget. All these subsidies need major rationalisation and targeting to divert more resources towards development expenditures and environmental sustainability, including agri-R&D, micro-irrigation, rural roads, agri-marketing infrastructure, and investments in building efficient value chains for high-value perishable commodities. India also needs to tackle the humongous problem of child malnutrition. It is time to change gears from a sole emphasis on food security to nutritional security, and having an agriculture system that is not only resilient to climate change but also protects its soil, water, air, and biodiversity. These goals can not be achieved in a business-as-usual scenario.
Within agriculture, the budget of FY25 provisions a 27 per cent increase in the allocation for the Department of Fisheries, Animal Husbandry and Dairying, Rs 71 billion, up from Rs 56.15 billion in RE (FY24). This is certainly a good step as fisheries and animal husbandry have been growing fastest within the agri-sector, and were not getting their due in proportion to their contribution to agri-GDP. However, one observes a massive jump of 70 per cent in PM Awas Yojana (Gramin), from Rs 320 billion (RE) in FY24 to Rs 545 billion (BE) in FY25. But this increased figure is actually the same that was budgeted in FY24, but could not be utilised. It is also interesting to note that more than 70 per cent of houses under the scheme have been allotted to women as sole or joint owners.
This not only ensures permanent asset creation for rural households but also provides dignity of life while creating more jobs in rural India. This is a commendable step and the FM deserves compliments. It would be even more innovative if MGNREGA in rural areas is synchronised with the PM Awas Yojana so that the dream of every household having a reasonably good shelter is realised as soon as possible. That will be the real beginning of Ram Rajya in rural areas, and will also reward BJP with votes in the coming elections.
Gulati is distinguished professor and Juneja a fellow at ICRIER. Views are personal
Tavleen Singh writes: Things more important than the BudgetPremium Story
Experts behind Uttarakhand UCC draft: Meet the five who drewPremium Story
In Bharat Ratna for Advani, PM Modi pulls another acePremium Story
Who stole my butter chicken?Premium Story
Interim Budget and challenges of sustaining growthPremium Story
Cat scan in Gujarat: Walking the extra mile to keepPremium Story
Anders Antonsen & his ambles and rambles towards taking onPremium Story
Behind Mamata attack on Congress, fear of split in MuslimPremium Story
Macroeconomic stability may create a good investment climate: Finance SecyPremium Story
Combining MGNREGA with PM Awas Yojana could ensure every household a reasonably good shelter
11
0
05.02.2024
As India gears up for parliamentary elections in April-May, Prime Minister Narendra Modi’s major development plank is the Viksit Bharat Sankalp by 2047 (developed India by 2047). He has also said that the only “castes” that matter are the poor, farmers, women, and youth. While opposition parties are stuck with caste census promises, PM Modi is riding on the promise of Ram Rajya, an inclusive and sustainable growth model. More confident than ever, Modi has set a goal of winning even more seats in this election than in the last one. His confidence stems from the performance of his government over the last 10 years, and the promise of Viksit Bharat by 2047.
There is no doubt that the Modi government has done quite well in the post-Covid recovery period. The Economic Review by the Department of Economic Affairs points out that India will register a more than 7 per cent growth in GDP for three consecutive years — from FY22 to FY24, perhaps even in FY25. This is much higher than the global average as well as the growth in most G20 countries. But for inclusive growth, we need to dive a little deeper and see what has happened in the agriculture sector, which engages the largest segment of the working population (45.8 per cent in 2022-23, as per PLFS). In this context, let us compare the 10 years of the Modi government with the 10 years of the UPA government on certain key parameters.
On the macro-economic front, India’s real GDP grew by 5.9 per cent per annum between FY15-FY24 vis-à-vis 6.8 per cent achieved during FY05-FY14. On CPI inflation, the Modi government wins hands down with 5.1 per cent versus 8.1 per cent in the UPA period. Multidimensional poverty fell from 29.2........
© Indian Express
visit website
login
who are we?
contact us
qosheapp
Toi Staff
Gideon Levy
Belen Fernandez
Andrew Mitrovica
Mort Laitner
Nikkei Editorial
Ali Fathollah-Nejad
Rami G Khouri
