Bhuvan Bhaskar
Finance Minister Nirmala Sitharaman is going to present the Union Budget for 2022-23 tomorrow. Obviously, all the experts are speculating about what may come in the budget and where the Finance Minister may miss this time too. But overall one thing is very clear that employment will be the priority of the Finance Minister and efforts will be made to take the fiscal deficit back towards the pre-corona target, which has been fixed under the FRBM (Fiscal Responsibility and Budget Management) Act. Everyone knows what the industries need; Everyone knows what the economy needs; Be it infrastructure or social sector, what should be the direction – everyone is clear about this. But one sector, about which confusion has arisen, is agriculture.
It is an irony that it is difficult for the Modi government, which has given the highest emphasis on agriculture in almost all of the last 7 general budgets, to make any clear estimates about agriculture in this budget, because in terms of agricultural reforms of the government, all three Agricultural laws were extremely important. But now all three agricultural laws have been withdrawn. After this the government will announce any major agricultural reforms in the budget, it is unlikely. Despite this, it will be interesting to take a look at the options available for the Modi government to give to the farmers and agriculture of the country.
If the work done in the last 7 years of the Modi government in the field of agriculture is classified, then it can be divided into 3 parts, first agricultural infrastructure, second economic empowerment of farmers and third, allied areas of agriculture, such as Special emphasis on Dairy, Poultry, Fisheries etc. The Finance Minister will try to go ahead with more or less the same classification in the Union Budget 2022-23, but hardly any revolutionary policy interventions are announced.
Since the Modi government assumed power in May 2014, the government has focused on infrastructural reforms ranging from soil testing to the introduction of the electronic National Agriculture Market (e-NAM). Let us first have a look at the options of the government in agri infrastructure. Finance Minister Nirmala Sitharaman last year launched a special fund for the development of mandis, named Agri Infrastructure Development Fund.
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Under this, a fund of Rs 1 lakh crore was earmarked, out of which Agriculture Produce Marketing Committee (APMC), Farmer Producer Organization (FPO) and Primary Agriculture Credit Society (PACS) would give easy loans up to Rs 2 crore and interest rates would be 3%. can be availed on subsidy. This time the Finance Minister can increase the scope of its use by expanding this fund further.
Apart from this, Sitaraman may bring some policy announcement and proposal for dedicated fund for warehousing and cold chain in the form of agricultural infrastructure. Along with this, some announcement can be seen in the budget to improve their quality by bringing more and more warehouses under the Warehousing Development Regulatory Authority (WDRA) and better government information on the crops stored in the warehouses. Such information will help the government to control food inflation more effectively.
The Modi government at the Center made several policy changes since 2016 with the goal of doubling farmers’ income from the base year of 2017. But now that 2022 has arrived, it is clear that the government is not going to achieve this target. To achieve this target, the committee of senior IAS officer Ashok Dalwai, set up to double farmers’ income, had estimated a 10% year-on-year increase in farmers’ income by 2022.
But the fact is that according to the NSSO data, where the average monthly income of a farmer was Rs 6426 in 2012-13, it could only increase by 29.7% to Rs 8337 in 2018-19, which if seen on a year-on-year basis. An increase of just 4.3%. This income is also after adding the inflation rate. That is, if it is removed, then in fact the income of the farmer has decreased by 2% in 6 years.
Keeping these figures in mind, the central government has made a huge increase in the agriculture budget and it has increased to Rs 135854 crore (Budget Estimate) by 2021-22 from Rs 46361 crore in the 2017-18 general budget. But this almost three-fold increase in the budget has failed in terms of increasing the income of the farmers.
The main reason for this is that even though the central government has increased the agriculture budget by 200%, a large part of it has gone to cash incentive schemes for farmers, such as PM-Kisan and Fasal Bima Yojana. In the last budget, this share is 79% of the entire agriculture budget, while the share of centrally sponsored schemes was just 21%.
This simply means that for those schemes in which the central and state governments spend together, very little allocation was made by the central government for them. Obviously, the states also took out their share in the same proportion. All these schemes are such, through which community infrastructure can be created and farmers can be helped on the ground.
These include schemes like Rashtriya Krishi Vikas Yojana (RKVY), National Food Security Mission (NFSM), National Mission on Horticulture (NMH), which, if implemented properly, can lead to a lasting increase in the income of farmers. . But this will require that the Finance Minister increase the share of centrally sponsored schemes in the agriculture budget. Along with this, there is also a need to increase the scope of PM-Kisan, so that crores of such farmers left out of its purview can also be included, who cultivate on the land of others.
In the current year’s budget, the government has made a provision of agricultural credit (farm credit) of Rs 16.5 lakh crore. It is expected that this year it will be increased to Rs 18 lakh crore. But the real question is to take this loan to the right class. At present, the beneficiaries of this agricultural loan include companies from food processing to many other sectors, through which banks give loans to these companies to meet their quota. The government should find a way so that the loans given to the farmers are given to the farmers only. Only then will the benefit of such a huge fund of agricultural credit actually be there.
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There have been several schemes over the years for budgetary support to the third category i.e. ancillary sectors. All government and non-government studies have made it clear that the role of allied sectors i.e. Dairy, Poultry and Fishery is huge in increasing the income of the farmers. According to the latest NSSO data, only 37% of the income of the households associated with the agriculture sector comes from agricultural produce, while 15 percent of the income comes from animal husbandry and 52% from allied sectors.
The Modi government has paid a lot of attention to the ancillary sectors under the scheme of doubling the income of the farmers. In the year 2019, the government also created a separate ministry to increase the emphasis on allied sectors. But the total allocation on this is still only 3% of the agriculture budget. This is one area where the finance minister can get better results by increasing the allocation.
With all these schemes, such schemes can be announced to increase the participation of farmers on e-NAM and to ensure maximum participation of farmers on the futures market, so that without disturbing the sensitivity of farmers, they can be empowered to market agricultural produce. Modern means can be provided.
(The author is a specialist in economic and agricultural matters)
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