C M Sharma
Union and State budgets are the annual plans of respective governments that spell out the road map for promotion of economic growth, development and public welfare through corresponding financial provisions. On basis of previous achievements, shortcomings and estimated potentials, financial provisions are made and incentives announced for stakeholders in private and public sectors. New schemes are announced and promising initiatives are also strengthened while unwanted intervensions are curtailed or scrapped and shelved.
From time to time, the governments in India have launched and carried forward various schemes for growth and development of agriculture sector, but it is for the past over 3 decades that we see a progressive introduction of structural changes across many sectors through policy adjustments and funding allocations. The pace has picked up fast during the past decade with measures that span public infrastructure, social programmes and economic reforms. As the Finance Minister, Nirmala Sitharaman has declared in her Budget 2025 speech, the State governments are going to receive support for specific initiatives, while industry incentives target manufacturing and technology development during the financial year 2025-26. The policy document has established new parameters for taxation, credit access, and social welfare programmes, with defined timelines for execution across urban and rural regions.
The Union Territory of Jammu and Kashmir is already in the 3rd year of implementation of a comprehensive and project based Holistic Agriculture Development Programme (HADP), aimed at transforming the UT into an agriculturally vibrant region. Meanwhile, some of the announcements in the Union Budget 2025 are poised to give a further boost to agriculture sector here and a few relevant takeaways are briefly outlined below:
(a), Prime Minister Dhan-Dhaanya Krishi Yojana, a scheme motivated by the success of the Aspirational Districts Programme, will be implemented in partnership with states. Through the convergence of existing schemes and specialized measures, the programme will cover 100 districts with low productivity, moderate crop intensity and below-average credit parameters. The programme aims to enhance agricultural productivity; adopt crop diversification and sustainable agriculture practices; augment post-harvest storage at the panchayat and block level; improve irrigation facilities and facilitate availability of long-term and short-term credit. This programme is likely to help 1.7 crore farmers.
(b) Proposal to boost production, supply chain efficiency, and pricing for farmers through a Comprehensive Programme for Vegetables & Fruits. The comprehensive programme to promote production, efficient supplies, processing, and remunerative prices to farmers for vegetables and fruits will be launched in partnership with states.
(c) Focus on research, climate-resilient seeds, and commercial availability of 100+ varieties, under National Mission on High Yielding Seeds.
(d) Credit limit through Kisan Credit Cards (KCC) enhanced from Rs.3 lakh to Rs.5 lakh.
(e) The proposed Mission for Aatmanirbharta in Pulses through a six-year programme focuses on self-sufficiency in Tur, Urad, and Masoor dal. The Mission will place emphasis on development and commercial availability of climate resilient seeds; enhancing protein content; increasing productivity; improving post-harvest storage and management and assuring remunerative prices to the farmers. Central agencies (NAFED and NCCF) will be ready to procure these 3 pulses, as much as offered during the next 4 years from farmers who register with these agencies and enter into agreements.
(f) A comprehensive multi-sectoral ‘Rural Prosperity and Resilience’ programme will be launched in partnership with states. This will address under-employment in agriculture through skilling, investment, technology, and invigorating the rural economy. The goal is to generate ample opportunities in rural areas so that migration is an option, but not a necessity. The programme will focus on rural women, young farmers, rural youth, marginal and small farmers, and landless families. The programme aims in catalyzing enterprise development, employment and financial independence for rural women; accelerating creation of new employment and businesses for young farmers and rural youth; nurturing and modernizing agriculture for productivity improvement and warehousing, especially for marginal and small farmers and diversifying opportunities for landless families. The global and domestic best practices are envisaged to be incorporated and appropriate technical and financial assistance will be sought from multilateral development banks. In Phase-1, 100 developing agri-districts will be covered.
(g) In addition, the Budget 2025 includes substantial financial provisions to modernise land records, establishment of Second national Gene Bank for Crops Germplasm for food security and biodiversity conservation, encouragement of satellite-based, broadband services to improve connectivity in rural areas. The government has also proposed special focus and enhanced incentives and allocations for boosting manufacturing through startups and Micro Small and Medium Enterprises (MSME), besides boosting trade and export.
Through above measures, the Union government appears on the right path to improve efficiency of farming. In J&K, there is still an unutilized potential in diversification through dairy farming, animal husbandry and poultry, fisheries, agro forestry and social forestry, sericulture, fruits, vegetables, flowers, mushrooms, bee-keeping etc. Through these interventions and by further transfer of latest production technology and focus on efficient use of water resources, farm mechanization, processing and marketing technology and skills, a sizable section of population can be progressively moved out to manufacturing, industry and service sectors. Absorption capacity of appropriately trained human resource will increase in Post harvest and agro-processing-cum-marketing sectors. Economists are already batting to immediately pull out at least 10% of the more than 50 percent of the population of the country from agriculture, because the contribution of this sector to GDP has declined to less than 17 percent.
Despite of the great concern of the economists, it appears that the pull out shall be gradual only, till the pace of expansion of services, industry and manufacturing sectors is substantially and equitably enhanced throughout the Union Territory and the youth and other workers from farming families find job in these. The Three Farm Laws were supposed to be a significant step to develop and grow the farm based industry, but even these reforms would not have yielded immediate results for the reason that India has a private investment problem and, in fact, the net capital outflow problem as the wealthy head out.
If agro-based manufacturers and industrialists seize the opportunity of a free and fair play provided by the latest budgetry provisions, then contract farming can become a driving force for profitable agriculture for all. Punjab ran through a few cycles of Contract farming & the farmers were really happy with basic guarantees in place for them. Even in J&K, Contract farming of different crops is in vogue, though it may not be official. Free market never hurts anyone because companies earn only through efficiency in cut-throat competition.
However, it is often observed that because of political and several other reasons, many initiatives remain ineffective to address the farmer’s problems and to boost their incomes. Some notable ones are the crop insurance scheme; the Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) and Pradhan Mantri Annadata Aayy Sanrakshan Abhiyan (PM-AASHA) to ensure remunerative prices for the farm produce. Some vital reforms concerning agricultural marketing, land leasing, contract farming and a few others are not making much headway for the same reason and proving counterproductive.
In October 2006, Dr. M.S. Swaminathan-headed National Commission on Farmers recommended shifting of agriculture from the State List to the Concurrent List of the Constitution. This would allow the Union government to have a greater and a relatively more decisive say in the matters related to agriculture and farmers without majorly diluting the powers of the state governments. More recently, the Dalwai committee on the issue of doubling farmer’s income also pitched for placing farm marketing in the Concurrent List to enable the Centre to revamp agricultural mandis, improve their functional efficiency and expand the rural marketing infrastructure.
It may be recalled that Agriculture in toto was included as State Subject under Entry 14 of State list of Schedule VII of the Constitution of India in terms of Government of India Act, 1935, because agriculture was then, basically region -specific and depended primarily on local agro-ecological conditions and native natural resources. The provincial administrations were considered better placed to look after it. Modern agriculture transgresses regional boundaries with inter-state commercial dealings being part of the game. Agriculture is now getting integrated with other sectors of the economy, like trade, industry and services. Bulk of the funding for rural infrastructure, irrigation and other farm development programmes comes from the Centre. The decisions concerning minimum support prices of crops, institutional credit and agri-commodities trade, both domestic and international, are taken by the Centre. By placing agriculture in the Concurrent List, serving farmers and saving farming becomes a joint responsibility of the Centre and the states.
To make farming profitable, it has to be demand driven and the demand will grow if purchasing power and level of awareness of consumers about nutritional requirement of different agricultural products is high. Union Budget 2025-26 is a big step in that direction. Industry has to respond & states have to match the budget announcements.
Simultaneously, the governments, both at the State and the Central Level, must ensure that the farmers don’t suffer at the hands of traders, big business people and corporate sector etc. The losses suffered by farmers due to reasons beyond their control must be duly compensated by the government or the contract farmer or the company, as the case may be.
Whereas, the Budgetry Provisions 2025 and various Central Schemes seem to significantly spell out the roadmap for the country’s growth and development, it is indeed the mutually cooperative attitude and understanding of the State governments and the Centre and the clear guidelines, timely release of funds, proper monitoring, regular appraisals, rectification of faults and plugging of loopholes at various levels, that hold the key to their successful implementation at the grassroots level.
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