The finance minister was at pains to stress that the Narendra Modi authorities had doubled the spending on wheat procurement and almost tripled that on rice procurement because it assumed workplace in 2014
Finance Minister Nirmala Sitharaman stated her Budget rested on six pillars and one of many targets was to double farmers’ revenue. But there was little in her Budget speech to change the path of agriculture, which not solely must be market-oriented and aggressive but in addition environmentally benign and resilient to local weather stresses.
The agriculture ministry’s outlay for the following yr is 5 p.c greater than the revised estimate for this yr. But the revised estimate is itself 13 p.c lower than the Budget estimate for 2020-21. The allocation for the division of analysis and training is Rs 8,500 crore which is about the identical as was supplied for this yr. The precise spending this yr might be lower than the Budget outlay by 7 p.c.
There has been acute underneath-spending in a few of the centrally-sponsored schemes. The micro-irrigation programme utilised solely 65 p.c of the price range allocation. The Rashtriya Krishi Vikas Yojana, which promotes horticulture, has used up 69 p.c of funds. It’s attainable that the lockdown and the gradual opening up thereafter disrupted the implementation of the schemes.
The Ministry of Fisheries, Animal Husbandry and Dairy will get 34 p.c greater than this yr’s revised estimate at Rs 1,220 cr. There is a much-needed emphasis on the event of fisheries together with harbours and touchdown factors.
Innovation in the Budget is the imposition of a cess on choose imports to create an agriculture infrastructure fund. It might be of Rs 900 crore. The cess might be imposed on gold and silver (2.5 p.c), apples (35 p.c), liquor (100 p.c), crude palm oil (17.5 p.c), crude soy and sunflower oils (20 p.c), gold and silver (2.5 p.c) and petrol and diesel. This might be in addition to fundamental customs obligation. Some of the cash might be used to enhance infrastructure in the regulated mandis, which might be impacted by one of many three central legal guidelines that prohibits the mandis from charging a market payment on agri-commerce exterior their bodily limits. The mandis cess was levied by states.
The agri-infrastructure is a central levy. Being a cess it won’t be shared with the states. Isn’t it higher to cost a payment from the customers of mandis than impose a tax on imports? The finance minister stated customers won’t be harm as a result of fundamental customs duties on this stuff might be lowered. But cesses have a behavior of creeping on extra objects.
The ongoing farmers’ protests on the borders of Delhi solid a shadow on the Budget. The finance minister was at pains to stress that the Narendra Modi authorities had doubled the spending on wheat procurement and almost tripled that on rice procurement because it assumed workplace in 2014. She stated there was a massive improve in the variety of beneficiaries however didn’t present comparable figures for beneficiaries underneath the UPA authorities.
The studies of the Commission on Agricultural Costs and Prices-which fixes the assist costs at which procurement is completed-don’t present a massive improve in the share of the procurement of rice (to take one commodity) as a proportion of manufacturing. Between the three years ending in 2013-14 and the three years ending in 2018-19 the share has elevated by two proportion factors. The spending on procurement nonetheless has vastly elevated as a result of cereal manufacturing itself has grown and so have the assist costs.
The finance minister’s claims on procurement contradict the said intention of enacting the three central legal guidelines, which is to make agriculture demand-pushed and market-oriented. Farmers promote to the federal government when assist costs are increased than market costs. This is the explanation why the protesting farmers of Punjab, Haryana and western Uttar Pradesh need procurement of wheat and rice at assist costs to be legally assured. They don’t need to face market uncertainties. But it will make the cultivation of rice and wheat unsustainable. The finance minister ought to have introduced a crop diversification fund for these states. It is a vital miss.
The author is a senior journalist
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