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Agriculture and Union Budget

Dr. Parveen Kumar,
Dr. R.K. Arora
On the very first day of this month, the National Democratic Alliance (NDA) government led by  Prime Minister  Narendra Modi presented its last full-term budget. This was the last full-term budget before the general parliamentary election in 2019 and also before the legislative elections in eight states scheduled in the second half of this year. The budget was presented in the backdrop of Prime Minister’s clarion call of doubling the farmers income by the year the country celebrates 75th year of independence.  While some have termed it as populist prepoll budget and a sort of masterstroke; some other call it defeatist and rhetoric. Before presenting the Budget, Finance Minister Mr. Arun Jaitley had on Monday tabled the report of Economic Survey 2018 in the parliament. The economic survey estimated that worst is over for the economy and that the economy is posed to rebound and grow in the range of 7 to 7.5 percent in fiscal 2018-19. The present government has been from the very first year very sensitive to the needs of the farming community. Many schemes have already been launched for their welfare.
In the Union budget 2018, the BJP Government although in its last full-term budget fulfilled its election promise of a hike in Minimum Support Price (MSP) by 1.5times the cost of production.  The minimum support price for kharif crops (Paddy and Cotton mainly) will be increased to 150 percent of the cost of production. All this will be done by the National Institution for Transforming India (NITI) Aayog in consultation with states and the central Government. This is indeed a good step but the critics still doubt for devising a single formula to determine input costs of crops growing in diverse geographical location and having different input and labour requirements. Infrastructure is a very big problem in India. Lack of suitable infrastructure results in food grains wastage as well as forces the farmer to go for distress selling of the produce. Finance Minister has made a provision of rupees 500 crore for protecting the interests of potato and onion growing farmers. This amount has been kept for logistics creation. Another welcome step is the enhancement of institutional credit. The institutional credit has been raised to 11 lakh crores which is an increase by ten per cent from that of last year’s allocation. Hope this will help the farmers to access credit easily and save themselves from the clutches of moneylenders. The credit to the agriculture sector is also sought to be extended to the tenant cultivators. Another Agri-market development Fund with a corpus of rupees 2000 crore o be set up for developing agriculture markets.
The union budget has also approved hundred percent deduction to the companies registered as Food Producer Companies with an annual turnover up rupees 100 crore on profit derived from such activities for five years from 2018-19. Fish and aquaculture and animal husbandry funds with a corpus of rupees 10000 crore has been set up. Restructured National Bamboo Mission is to be launched with an allocation of rupees 1290 crores to promote Bamboo sector in a holistic manner. Describing Bamboo as ‘Green Gold’, the Government has now removed bamboo grown outside forest areas from the definition of trees. Grameen Agriculture market (GrAMs) will provide farmers a mean to sell directly to buyers. These GrAMs electronically linked to eNAM will provide farmers facility to make direct sale to consumers and bulk purchasers.
Allocation to food processing ministry has also been doubled from rupees 715 crores to rupees 1400 crore. This will definitely help to set up more food processing centres across the country thereby enabling more food items to be processed. In fact the complete tax exemption on agricultural produce processing which will create additional employment opportunities in the rural areas. This in turn will also help to raise the income of the farmers. Mr. Arun Jaitley also gave a call for Cluster model approach to be adopted for agricultural production with a focus on low cost farming with a higher Minimum Support Price. In the budget emphasis is also on generating farm and non-farm employment for farmers. Referring to 86 per cent farmers in India, the minister said that efforts will be made to link them with the markets to get adequate remuneration for them. Nearly 470 Agricultural Produce Marke-ting Committees have been connected to electronic National Agriculture Market (eNAM) network. The rest are to be connected by March 2018. For the development of agricultural markets, an Agriculture Market Devel-opment Fundwith a corpus of rupees 2000 crore is to be set up for development of agricultural markets. The focus of the government next year will be to provide maximum livelihood opportunities in rural areas by spending more on livelihood opportunities, agriculture and construction of rural infrastructure.
In the year 2018-19 for the creation of livelihood and infrastructure in rural areas the total amount to be spent by ministries will be rupees 14.34 lakh crore from extra budgetary and non-budgetary resources. The government will also develop and upgrade 22000 rural haats or markets for which the finance minister has also set aside rupees 2000 crore. To provide irrigation facilities in 96 irrigation deprived districts,an allocation of rupees 2600 crore has been made.Three lakh crores have been allocated for Prime Minister Mudra Yojana which will definitely help to create more entrepreneurs that will go a long way in creating more job opportunities.  Similarly, the loan amount provided to Self Help Groups (SHGs) has been enhanced to rupees 75,000 crore by March 2019. This will help in mobilization of rural communities especially the womenfolk.
With this budget, government also aims to generate employment of 321 crore person days in rural areas. The budget has also allocated highest ever amount of rupees 5500 crores to Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) compared to rupees 48000 crores in current fiscal. To sum up measures like GrAMs, tax benefits for FPOs, development of rural haats are welcome measures; the most important to be closely analysed and watched will be how the government will come out with MSP that will be 1.5 times the cost of production.
(The authors are from Sher-e-Kashmir University of Agricultural Sciences and Technology of Jammu)


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