India Ratings' chief economist Devendra Pant said unless a revival in the rural demand whatever one may do on income tax front that is unlikely to give major boost to the economy.

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Pant told CNBC-TV18: "I will look at what kind of steps are taken in the Budget 2020 to revive rural economy or the rural demand."

He said employment situation is grim in the economy, therefore, the government should provide jobs through NREGA or other rural employment guarantee schemes.

"What happens is these people have a marginal propensity to consume closer to unity, to put it in a simple way, if they get Rs 300 as wage, it is more likely that they will consume a large part of it and that will spur demand in the economy."

"Second is all rural focus employment guarantee like rural roads has multiplier effect -- it involves a lot of labour and again we are providing money to the people at the bottom of the pyramid who again will consume."

"Rural road and rural housing are important. At the same time don't lose focus on increasing irrigation coverage, so that whatever has been done under Accelerated Irrigation Benefits Programme (AIBP) or other schemes continue doing that."

Budget 2020 is now less than a week away. Agriculture contributes nearly 17 percent to the country's gross domestic product (GDP).

First Published:Jan 24, 2020 10:36 PM IST