India is staring at Budget 2019, with stakeholders keeping their hopes high this time, with a view that the country will go in from General assemble election in April-May. Economic surveys have started making rounds, with several surveys and analysis coming up on each sector.
In the backdrop of drop in average rainfall and impending droughts, government data on the crisis-ridden agriculture sector has revealed that the spending on the same is at all time high. Agriculture sector sustains over 600 million Indians that accounts for half the population of the country.
Agriculture budget has increased by two folds over five years to Rs 57,600 crore in 2018-’19 under the Narendra Modi led National Democratic Alliance (NDA) government. This figure is three times of the last budget in 2013-14, presented by United Progressive Alliance (UPA) government. Highest jump came in 2016-’17 that saw an increase of whopping 79%.
According to Scroll.in report, an IndiaSpend analysis of budgetary data stated that although NDA’s allocations for the sector were largely static, but government kept its allocation on an average at 2% of the total budget than 1.3% during the second term of the UPA. In fact, 2018-’19 saw it rising further to 2.3% over the previous year.
Agriculture contributes only 18% of the gross domestic product (GDP) but caters half of the country’s population. Around 69% or 833 million Indians live in rural areas and most of them are poor. Thus, the agriculture sector is likely to garner extra consideration in the Modi’s last budget before the next general elections.
Not only this, the sector has even become more important after the Bharatiya Janata Party lost three agri-driven states – Rajasthan, Madhya Pradesh and Chhattisgarh – in the state assembly elections in December 2018.
Commentators and experts site farm distress was the ‘factor’ behind these electoral reverses in BJP’s stronghold. In November 2018 had seen series of protests by over 200 farmer groups, demanding better prices for their crops and “freedom from debt”. After debacle in state election, agriculture sector is most likely to get Modi’s special attention in form of a relief package for farmers in interim budget before the general elections.
Besides this, NDA has stepped up the efforts to woo farmers as they have pitched in to double the farmer incomes by 2022. As per the experts, budget 2019’s priorities should be clear, that means more money and more research for the agricultural practices and public investment.
Radha Mohan Singh, Federal Minister of Agriculture told Business Insider on January 24, “The budget will be dedicated to farmers in the country as part of the government efforts to double their income by 2022.”
However, larger problems lie ahead as budget must address to mitigate the existing agricultural crisis and win over farmers.
Importance of agriculture budget
As per the agriculture census 2015-’16, around 70% of rural population is primarily engage in agriculture practices and around 86% of farmers falls under the category of “small and marginal”, which means their field size is less than two hectares.
IndiaSpend reported in January 2018 that the average debt per indebted rural household in 2013 was Rs 103,000, which is almost same to the price of a luxury bike, Royal Enfield Bullet.
On the other side, billionaire fortunes in India saw phenomenal growth by 35% last year, at the rate of Rs 2,200 crore a day. However, 136 million people who falls in the poorest 10% of Indians continued to be in debt since 2004, reported January 2019 report by international non-governmental organisation Oxfam.
Speaking on the similar lines, Delhi-headquartered think tank Centre for the Study of Developing Societies said nearly 69% of the farmers thought that city life would be better than village life.
Beginning in April 2017, eight states have given farm loan waivers worth Rs 190,000 crore, along with the increase in procurement price for both kharif (monsoon) and rabi (winter) crops by the central government. Still, government has failed to make farmers happy, as they feel that these increases were not par to the levels prescribed by noted agriculture economist MS Swaminathan led-committee set up in 2004.
Besides this, another key problem is that there are too many farmers on too little land.
Funding to the agriculture sector in span of Modi led five years
In span of last 5 years, the funds allocated to the Ministry of Agriculture and Farmer Welfare in the budget is Rs 209,084 crore. In this, 2018-’19 saw the highest money allocation, but 2016-’17 witnessed whopping 79% rise in the allocation to Rs 44,485.2 crore over the previous budget. Budget 2015-’16 was the only year to see fall in allocations that too by 20% over 2014-’15.
Talking about the several schemes launched during that period, based on budget data, the actual expense on Pradhan Mantri Fasal Bima Yojana was 17% less than the budgeted amount of Rs 13,240 crore in 2016-’17.
This article first appeared on Scroll.in
