This is the second in a two-part explainer by the CNES InfoSphere team from its latest edition, as part of its special research series on Arthvyavastha: Measuring the State of the Indian Economy. To review InfoSphere’s research work, please view its website here.The first part of this series helped explain the nature of concerns affecting India’s macro and micro rural performance indicators from a lower disbursement and budgeted ratio of fiscal priorities weighted by the Union government during its elected term. A lower fiscal outlay and disproportionate rate of disbursement for schemes applicable have contributed directly to the poorer functioning of certain schemes, including those like MGNREGA which have been around for long and have been instrumental in providing some job security for an otherwise underemployed rural population across states. We look here at the performance of some more schemes under the Modi government and the factors that play a role in contributing to developmental prospects. Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)PM-KISAN Yojana aims to supplement the financial needs of the farmers in acquiring various inputs to ensure proper crop health and appropriate yields and generate equivalent expected income for the farmers. This nationwide scheme was announced in the 2019 interim budget of India.All small and marginal farmers would receive Rs 6,000 per year in three payments, which will be put directly into their bank accounts under this initiative. The Union government would fund the total yearly expenditure for this initiative.The programme’s benefits are now available to all farmers nationwide without the need for intermediaries through a farmer-centric digital infrastructure that upholds complete transparency in beneficiary verification and registration.As of August 2023, the Government of India has disbursed over Rs 2.60 lakhs crores to more than 11 crore farmers. In the last financial year i.e. 2022-23, a total amount of Rs 58,201.85 crore was disbursed to eligible beneficiaries.Beneficiaries of the scheme. Source: InfosphereThe above graph depicts a substantial increase in the number of farmers receiving benefits from the programme. Since its inception in 2019, the number of beneficiaries has increased dramatically, from 3 billion to 30 billion by 2021. Notably, data for the 2022-23 fiscal year were only available through November 2022, which may explain the lower beneficiary count for the 2022-23 fiscal year.The main concern for the scheme is the underutilisation of the allocated funds.Budget Estimate vs Amount Released. Source: InfosphereThe above graph demonstrates conclusively that the government has consistently underutilised the allocated funds for the programme. Except for 2021, the government consistently underutilised the allocated funds. A budget overrun in 2021 was primarily attributable to the necessity of meeting the requirements of farmers during the second wave of the COVID-19 pandemic.Percentage Budget Under-Utilisation. Source: InfosphereThe above chart shows that the government made efforts to address the issue of underutilisation but still confronts an average rate of 24% of the budgeted amount. Factors shaping rural development patterns across IndiaFirstly, literacy rate trends have a major impact on rural development scenarios. A higher literacy rate, especially amongst girls in rural areas, has been responsible for the improved performance of many public health statistics and over time helped rural youth get absorbed in higher-paying, and better-condition employment opportunities.According to NSS reports, the literacy rate in rural India increased from 68% for males and 43% for females in 2000 to 72.3% for males and 56.8% for females in 2014. Between 2003 and 2014, rural literacy grew at a compound annual growth rate (CAGR) of approximately 3.42%.In 2021, the literacy rate stood at around 73.5% in rural India, including 81% for males and 65% for females. The government of India has launched many initiatives such as Samagra Shiksha, Jahawar Navodaya Vidyalaya, mid-day meal schemes, etc. to increase the enrolment rate and also to encourage the already enrolled students to attend regularly, leading to a rise in literacy rates.Still, rural India requires a strong infrastructure, including roads, communication channels, electricity, drinking water, irrigation, drainage, and adequate housing.As per Census 2011, 45% of rural households do not have electricity connections and depend on kerosene and other means for lighting and merely 30% of rural areas are covered with tap water supply.In addition, the sanitation facilities in rural areas are also not adequate. As per the road statistics published by the Union government for 2012-13, rural roads span 60.39 km of every 100 km. Further, the rural surfaced road is just 33% of the total rural road network in India and the remaining are kutcha roads which are highly vulnerable and inaccessible, particularly during the rainy season.Various schemes and initiatives are being undertaken by the current government including the Jal Jeevan Mission which aims to provide functional household tap connection to every rural household by 2024. As of December 31, 2019, road length worth Rs. 2.9 lakh crore had been sanctioned and expenditure of Rs. 2.17 lakh crore was incurred. The vision for 2025 is for 100% of the rural population to have access to pucca houses with basic civic amenities such as piped drinking water, power supply and LPG connections.Government policies have helped to develop rural India, creating new job opportunities. One such initiative is TRYSEM, or Training Rural Youth for Self-Employment. It aims to train young people in technical skills so that they can start their businesses. Multi-pronged strategies are being taken by the Government to address issues relating to employment opportunities through centrally sponsored schemes likeMGNREGS, Deendayal Antyoday Yojana- National Rural Livelihood Mission, Deendayal Upadhyay- Gramin Kaushalya Yojana and Pradhan Mantri Gram Sadak Yojana.The government launched the Garib Kalyan Rojgar Abhiyaan (GKRA) of 125 days on June 20, 2020 to boost employment and livelihood opportunities for returnee migrant workers and similarly affected persons including youth in rural areas, in 116 selected districts across Bihar, Jharkhand, Madhya Pradesh, Odisha, Rajasthan and Uttar Pradesh. The Abhiyaan has achieved an employment generation of 50.78 crore person-days with a total expenditure of Rs 39,293 crore.The rise of mass media, such as television, social media, and radio, has increased awareness among rural people. With mobile phones and the Internet, they can now search for jobs, learn new skills, and connect with people outside of their village. This has also made them more aware of different government schemes that can help them with farming and other activities.The Indian Council of Agricultural Research (ICAR), which is responsible for agricultural research, helps understand how crop yields are affected by different atmospheric and soil conditions, and how fertilizers can be used to increase production leading to the overall development of the rural areas.From 2014 to 2023, ICAR has been able to release 2,764 varieties of field and horticultural crops including 123 bio-fortified varieties. It has enhanced export-oriented production of horticultural crops and gene modifications to explore improved resistance to biotic/abiotic stresses. ICAR was able to develop 28 eco-friendly pest management modules and. 53 multi-enterprise integrated farming systems (IFS).In summation India’s root is still habituated in the heart of its villages even though, paradoxically, its cities power the growth story. The appropriation of rural populations’ hard work has become a cost-benefit advantage for urban areas to source cheap migrant worker bases. One can see that while analysing the growth of construction, or MSMEs too.Upon assuming office in 2014, the Modi administration instilled considerable optimism on the prospects of rural reform and the lofty objective of doubling the earnings of farmers. Nevertheless, in 2019, the development achieved was not in line with the initial expectations. However, a considerable segment of the rural voting population maintained a sense of optimism and adopted a cautious stance, expecting that the government’s subsequent term in office would yield the desired transformations they longed for.Representative image of a farmer spraying fertilizer. Photo: IFPRI/Flickr CC BY NC ND 2.0Road construction and better connectivity have helped remote areas to be better connected than before but rural livelihoods, and access to basic amenities, including better education, healthcare, or employment, remain a distant goal. This has negatively impacted the upward mobility promise that (new) governments bring with them when they expect to be voted back to power.Programmes like MGNREGS have brought a tangible difference to the rural economy and contributed to its growth rates, but require more funding and expansion. What has been observed is a reverse effect in the support for these – and more centrally budgeted schemes – in the Modi government’s second term. Fiscal insecurities are driving this, but a lack of intent and will to bring a transformative, long-term change in rural livelihoods will not only affect the aspirational hopes of the current generation but also the future ones.Deepanshu Mohan is professor of economics and director, CNES. Amisha Singh and Aditi Desai are research assistants with CNES and co-leads of the InfoSphere team. Vasudevan, Shilpa Santhosh, Aryan Govindakrishnan and Jheel Doshi are members of the InfoSphere team and research assistants with CNES.