Union Budget 2024
Dr. Parveen Kumar
The Union Budget 2024 presented in the background of a robust economy that is projected to grow at 6.5-7 per cent highlighted nine priorities of the present government. These priorities include productivity and resilience in agriculture; employment & skilling; inclusive human resource development and social justice; manufacturing & services; urban development; energy security; infrastructure; innovation, research & development and next generation reforms. An amount of rupees 1.52 Lakh crore has been kept for agriculture and allied sectors. In the year 2023-24 an amount of rupees 1.25 lakh crore was kept for the Ministry of agriculture and Farmer’s welfare but there was a separate head for allied sectors.
As usual, the Finance Minister came up with the Economic Survey before the presentation of budget 2024-25 which among other things called for serious transformation in agriculture sector. According to Economic Survey, agriculture in the country is not in a crisis, but requires serious structural transformation because of the threats posed by climate change and water that will criticality loom large in the times to come. The survey further called for urgent structural reforms with a rider that the country’s inability to address the structural issues could further lead to impeding of country’s overall growth trajectory. This is because the sector supports 42.3 percent of India’s population and has a contribution of 18.2 per cent to the Gross Domestic Product (GDP) of the country. The sector has shown resilience with an average growth rate of 4.18 percent over the past five years, but down to 1.4 percent in the current year. The food grain production in the country in the year 2022-23 touched an all time high of 329.7 million tonnes. It is expected to decline a further in 2023-24 due to unfavorable monsoon. An important highlight has been the increase in production of oilseeds. The increase in domestic production of oilseeds has led to a reduction in the share of imported edible oil from 63.2 per cent in 2015-16 to 57.3 per cent in 2022-23. About the marketing of agriculture produce, the flagship programme e-National Agriculture Market which aims to connect all the regulated markets in the country has registered over 1.77 crore farmers and 2.56 lakh traders, streamlining agricultural marketing. Regarding the mobilization of farming community, the prestigious programme of Formation and Promotion of Farmer Producer Organizations (FPOs) wherein the government intends to form 10,000 farmer producer organizations (FPOs), about 8,195 have already been established. The government will also promote FPOs, cooperatives and Startups for vegetable supply chains including for collection, storage and marketing.
Indian agriculture is dominated by marginal and small farmers’. The Economic survey has rightly pointed out that it is not possible to increase their income by the traditional cropping cycles involving Wheat, Paddy, Maize, Pulses or Oilseeds. The need is to motivate and incentivize them to produce High Vale Crops (HVC) such as various vegetables and fruits along with diversification with allied sectors like poultry, apiary, fisheries, goatry medicinal and aromatic plants, dairy farming etc. The allied sectors such as livestock and fisheries have been highlighted as robust growth centres, with the livestock sector growing at a compound annual growth rate (CAGR) of 7.38 per cent from 2014-15 to 2022-23 and the fisheries sector at 8.9 per cent CAGR over the same period.
UNION BUDGET 2024: Sustainability is now the buzz word everywhere. This is because a lot of damage has been done to the environment because of our wrong and faulty habits and practices. In the agriculture sector, sustainable agriculture practices are now being promoted through Natural Farming. The shift towards natural farming also aims to reduce dependency on chemical fertilizers and pesticides. Natural farming enhances soil health and biodiversity while reducing cultivation costs for farmers, thereby increasing their profitability. In the next 2 years, one crore farmers will be initiated into natural farming supported by certification and branding. The Budget 2024-25 also plan to promote large-scale vegetable production clusters. These clusters will be strategically established to boost production and ensure a steady vegetable supply across the country. The government also plans to undertake a comprehensive review of agricultural research and focus on developing climate-resilient varieties in agriculture. To further augment the production in the country 109 new high-yielding, climate-resilient varieties of 32 crops will be released to farmers. Additionally, 10,000 need-based bio-input centres will be established to strengthen the production, storage, and marketing of oilseeds.
The Budget also comes up with the provision of promotion of digital public infrastructure in partnership with state governments. This digital framework will provide farmers with access to vital information, such as weather forecasts, crop advisory services, and market prices. A digital crop survey for Kharif will be conducted in 400 districts in FY25. The issuance of Jan Samarth based Kisan Credit Cards will be enabled in five states. Financing for shrimp farming, processing, and export will be facilitated through the National Bank for Agriculture and Rural Development (NABARD).
The abolition of Angel Tax; a tax applied to unlisted companies in India when they raise capital by issuing shares to investors at a price exceeding a company’s fair market value. The excess amount is treated as income and taxed at a rate above 30 per cent. This tax was acclaimed a punitive in more ways than expected. While abolishing the Angel Tax the Finance minister said that it will bolster the Indian Startup ecosystem, boost entrepreneurial spirit and support innovation. The limit for MUDRA loans has been increased from rupees 10 lakh to 20 lakh. E-commerce hubs will be set up to strengthen international trade. All this will definitely strengthen entrepreneurship in the country. Primeminister himself said that the government will create entrepreneurs in every city, every village and every home. Besides financial support for setting up of 50 multiproduct food irradiation units in the MSME sector will be provided, 100 food quality and safety testing labs with NABL accreditation will be facilitated.
Regarding crop protection from unforeseen calamities, the PM Fasal Bima Yojana continued to provide comprehensive crop insurance, with an insured area of 610 lakh hectares in 2023-24. It has to be ensured that marginal and small farming communities are included and that the compensation amount is being provided to the affected farmers at the earliest.
The increase in investment in agriculture sector has a considerable effect on the net returns. Research studies have shown that for every one rupee invested in agriculture, the net return is rupees 13.85, implying a multiplier effect that exceeds returns from all other activities linked to farming. This has been reported in a working paper published in April, 2024 by the National Institute of Agriculture Economics and Policy Research (NIAP) that works under the Indian Council of Agriculture Research (ICAR). Private sector is an important stakeholder for development of agriculture. Roping in private investment in this sector can also benefit by way of establishment of adequate infrastructure in rural settings, generation of self employment opportunities and creation of useful assets. The Economic survey had also stressed the need for increased private sector investment in agriculture to drive advancements. Investments in technology, modern production methods and marketing infrastructure were crucial for enhancing post-harvest management and reducing losses.
Significant focus in the budget on digital public infrastructure will also make things more transparent for the farming community. Skill training along with employment is one of the nine priorities of the government as mentioned in the budget. It will also further lead to more skilling opportunities for the youth to upgrade their skills in different agriculture related trades ultimately paving the way for entrepreneurship in the country.
(The author writes on
agriculture and social issues)
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