India on cusp on big shift in way rural economy is operating: Sitharaman to HT

Union finance minister Nirmala Sitharaman said there has been a significant transformation in the rural areas. But the problem is that “we are not able to measure it properly. We also don’t have surveys to measure it”.

FM Nirmala Sitharaman during the Post Budget Press Conference at National Media Centre, in New Delhi, India, on Thursday, February 1, 2024. (Photo by Raj K Raj/ Hindustan Times)(Hindustan Times)
FM Nirmala Sitharaman during the Post Budget Press Conference at National Media Centre, in New Delhi, India, on Thursday, February 1, 2024. (Photo by Raj K Raj/ Hindustan Times)(Hindustan Times)

In an interview with Hindustan Times, Nirmala Sitharaman said there is a demand for services in rural areas that was not present before, stressing the need to have better data for sharper policymaking.

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“We need to have a lot more comprehensive and credible data that captures these kinds of changes. One improvement in the labour force surveys, which is coming out of the labour department… but again that is only formal sector labour. We have not captured the informal sector yet,” Nirmala Sitharaman said.

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Is moderate growth in private consumption a concern?

When asked about the impressive multidimensional poverty numbers not translating into a substantial increase in private consumption, Nirmala Sitharaman said it reflects the economy undergoing significant shifts and challenges to existing paradigms.

“I take a very simple example; rural workers move to urban areas and during critical seasons [sowing or harvesting] they go back to their villages. Now, since post-Covid, many of those who had been in the urban areas and acquired some kind of skills — each at his or her level — are saying that the rural areas are giving them [similar] opportunities to utilise and monetise their skills. Many of them have not even returned [to urban centres]. If that is happening, are we able to measure that? Are we able to take into account such changes? So, I think we are at a very, very transitory stage,” the finance minister said.

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Nirmala Sitharaman also said agriculture and related activities are adapting significantly to changing methods and practices. The Common Service Centres (CSCs) established are now witnessing more mail and courier entries, even in post offices in rural areas. People are sending out products and samples, she said.

“We are at a wonderful stage, the cusp of a big shift in the way in which agriculture, the rural economy, is operating,” Sitharaman added.

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Then why MNREGA demand is also increasing?

FM Sitharaman said the demand for MNREGA, a scheme offering guaranteed wage employment in rural areas, is not increasing everywhere and also the increase is mainly due to seasonal activities.

“But equally, we’ll also have to notice that in some states it is being targeted as one of the resources coming from the Centre, nevertheless. The CAG has pointed this out. We need to understand what is actually happening on the ground on MNREGA,” Sitharaman said.

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“We’ll never deny even one penny. If it is required, yes you will get it. But, who explains the malpractice? Who explains to you that people who don’t even exist are getting the job cards,” she added.

The finance minister emphasised the need for clarity, saying that if indicators like MNREGA demand are used to measure economic activity, it cannot be simultaneously claimed that rural demand is increasing in some cases and not in others.

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