Sitharaman confident she can make savings easier, raise income levels in rural India

While India handles a fast growing economy, Nirmala Sitharaman who presented the Union Budget recently asserted that she can make savings easier for those residing in rural areas through rate rationalisation.“I can ease people’s savings, I can facilitate them in the sense, by rationalising many rates with which they are dealing, whether the GST Council, which is going to look at rate rationalisationfor daily purchase and daily use, commodities, goods,” said Sitharaman in an exlusive interaction with ET.

Adding on to measures of Prime Minister Narendra Modi-led government for rural India, Sitharaman said “Government itself is coming forward to say I will invest in proper common public goods, which will bring in better business for you. Today the reach of the digital economy, even to the farthest point in our country has actually made it possible for people to reach such markets, which they wouldn’t have imagined even within the state.”

The average monthly per capita consumption expenditure in rural areas has increased from Rs 579 in 2004 to Rs 3,373 in 2023. In comparison, urban expenditure has gone up from Rs 1,105 to Rs 6,459. Yet, both consumption and spending in rural areas is about 40 per cent lower compared to urban areas, said Kantar in a new report.

“Public spending in infrastructure, digital infrastructure and public spending and taking it that far. These are cumulative ways in which brick after brick we have built and taken instruments for the real income of people in far-flung areas to go up,” said Sitharaman.

Budget booster for rural India enough?
Finance Minister Nirmala Sitharaman on Tuesday announced that Rs. 2.66 lakh crore has been allocated for rural development, including rural infrastructure. She also said that three crore additional houses will be constructed under the PM Awas Yojana in rural and urban areas.

Companies expect the recent budget’s push will help boost rural consumption and also increase discretionary spending. “The government’s decision to allocate Rs 2.66 lakh crore for rural development, including rural infrastructure, and its continued focus on rural infrastructure development are big steps in the right direction. These measures would further boost consumer sentiments in the hinterland, which is already showing green shoots of revival,” said Mohit Malhotra, chief executive officer at Dabur.