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Union budget: Investments in rural infrastructure crucial to boost new economy

Union budget: Investments in rural infrastructure crucial to boost new economy

New Delhi, July 21 Experts say there is a need for investments in districts and rural areas, both to accelerate traditional economic activities and to boost the new economy, which focuses on circularity.

India’s rural economy employs nearly 68 percent of the workforce but contributes less than half to the country’s GDP.

Accelerating socio-economic status in districts is essential for creating inclusive and sustainable growth.

Amit Vatsyayan, GPS Leader – Agriculture, Livelihoods, Society and Skills at EY India, said investments in rural infrastructure, agriculture and non-farm sectors have driven impressive growth.

“Initiatives such as rural digitalisation, financial inclusion, community institutions and scalable technology are crucial to revitalising the rural economy. New business models that enable rural communities to add value and reshape districts as economic corridors will be essential,” he noted.

By focusing on creating rural areas as champions of circularity, there is great potential as overall sustainability becomes a top priority.

Given that 60 percent of the rural economy is concentrated in six states — Uttar Pradesh, Bihar, Maharashtra, West Bengal, Madhya Pradesh and Rajasthan — it is critical to adopt a local approach that addresses specific challenges while developing rural investment strategy, experts said.

Meanwhile, women entrepreneurs are a powerful engine for economic growth and employment in India.

With over 10 million Self Help Groups (SHGs) established, collectively managing an estimated Rs 70 billion in savings and maintaining a remarkably low non-performing assets (NPA) ratio of just 2.01 percent, there is a compelling case for investing in helping women become entrepreneurs.

Women-owned micro, small and medium enterprises (MSMEs) in India have shown impressive results, hiring 11 percent more female workers than male MSMEs and creating a third of all new jobs.

They also reported a 12 percent increase in monthly revenue and a 19 percent increase in monthly net income, indicating better cost optimization and revenue growth.

“To promote women entrepreneurship in India, it is essential to invest in creating a robust ecosystem that provides access to critical business services such as finance, markets, skills, networking and mentoring,” said Vatsyayan.

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