By Jaya Ranjan
The Finance Minister Arun Jaitley presented the Union Budget for the year 2017-18 on 1st February 2017 amidst much anticipation and expectations.
The budget was expected to provide measures and reforms to revive the plummeting consumer demand due to demonetisation.
The effectiveness of the budget may be debated however the agricultural sector’s pivotal role in the Indian economy is undisputed.
The agricultural focus of the Budget
The Finance Minister has doled out various measures for the agriculture sector as a part of the Budget. Higher agricultural credit of INR 10 lakh crore, increasing the credit flow to under-served areas and the highest ever allocation of INR 48,000 crore for MNREGA are some highlights. INR 9000 crore has also been allocated to the Fasal Bima Yojana. Jaitley had pegged the growth of the agriculture sector at 4.1% during the current fiscal year. He based it on a good monsoon and facilitated the setting up of funds for micro-irrigation and daily processing. INR 8000 crore was allocated to daily processing to promote it as an alternative source of income for farmers.
Modern laws for contract farming have also been envisaged. The crop insurance scheme “Pradhan Mantri Fasal Bima Yojana” has also seen an increase in allocation of funds as compared to the previous year. It has been increased to Rs 13,240 crore for the current fiscal year, up from the Rs 5,500 crore. Apart from allocation of funds, the government also facilitated the computerisation of the National Bank for Agriculture and Rural Development (NABARD).
The real problems in Indian agriculture
[su_pullquote]These numbers indicate that most of the income of an average farmer is spent in meeting in meeting their consumption expenditure.[/su_pullquote]
Will all these schemes double the farmers’ income by 2022, as suggested by the Prime Minister last year? A survey conducted by the Situation Assessment Survey of Agricultural Households estimated the average monthly income of an Indian farming household at INR 6,426 and average monthly expenditure to be INR 6,233. These numbers indicate that most of the income of an average farmer is spent in meeting in meeting their consumption expenditure. Leaving cultivation-related expenditure to be financed primarily through loans. Therefore, to substantially increasing the farmer’s income, it is imperative that the farmers receive higher returns for their produce. The Minimum Support Price (MSP) has been stagnant over the years, while the prices of insecticides, pesticides, seeds and fertilizers have been increasing. It is no surprise then, that agricultural output has been stagnant.
Will the Budget work for all farmers?
Another aspect which needs consideration is the heterogeneity of the Indian farming community. It comprises of rich, farm owning landlords to poor landless farmers who can barely sustain themselves. Perhaps the Budget will have a non-uniform impact on their livelihood. Only the affluent farmers can derive maximum benefit from the provision of loans and online trading of their produce.
The illiterate and female farmers stand to lose the most in this Budget. | Source: The Better IndiaThe poor illiterate farmers don’t stand to gain much as compared to their wealthier contemporaries. Moreover, female farmers, comprising about 50% of the farming community, won’t be able to avail the benefits of crop loans and agricultural credit as they don’t have farms registered under their names. Unless female ownership of land is equally recognized, no amount of funding will help increase their income.
Agriculture undoubtedly stands to benefit from a higher allocation of funds. However, the government needs to uniformly distribute these funds and ensure it reaches those who genuinely need them.
Featured Image Courtesy: Asian World News
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