Budget 2023: Rural economy, social welfare key thrust areas, says DBS Bank's Radhika Rao

Just a year to go for the general elections, the Budget for 2023-24 is likely to have rural economy and social welfare as key thrust areas. There has been an improvement in sentiment after a year of spiralling inflation and excessive heatwave that damaged crops and squeezed rural incomes.

The pick up in business activity in urban areas has benefited the rural non-farm sector.

"The recent easing in rural inflation and a solid start to rabi sowing will help the near-term momentum. Besides, the non-farm rural sector is benefiting from backward linkages to a pick-up in urban business activity, and policy support is also likely," said Radhika Rao, Executive Director & Senior Economist, DBS Bank.

The government is likely to increase allocation on the rural employment guarantee programme, MNREGA, compared to the Rs 73,000 crore in the last Budget. It will also increase focus on schemes like crop insurance, rural infrastructure, low-cost housing among others.