Centre plans Rs 40,000 crores package to woo farmers

'The Government is working on an overall package for the agriculture sector, with a budgetary provision of Rs 40,000 crore,' said a senior Finance Ministry official.
Image of farmers used for representational purpose only.  (Photo| EPS)
Image of farmers used for representational purpose only. (Photo| EPS)

NEW DELHI:  Post Assembly polls debacle in five states, the ruling BJP government is planning a Rs 40,000 crore package to support the agriculture sector in its upcoming budget, in a bid to woo disgruntled farmers.“In the last budget itself, the government had shifted its focus to the rural sector.

There were a host of schemes and announcements by the government. The government will continue with its focus on farmers and is working on an overall package for the agriculture sector, with a budgetary provision of Rs 40,000 crore,” a senior Finance Ministry official told TNIE.

According to the official, the package will not necessarily mean a loan waiver. “It is wrong to conclude that it will be purely loan waiver. The focus is on the overall welfare of the farmers and the sector. The (Finance) Ministry is soon going to have met with Agriculture Ministry officials and members of NITI Aayog for consultation,” he added.

However, it was a no-brainer that farmers expect a decent share in the upcoming budget of the government, especially after its loss in the Assembly polls this week. The Bharatiya Janata Party lost its strongholds in Rajasthan, Madhya Pradesh and Chhattisgarh. As per post-election analyses, distress in the farm sector, which had brought over one lakh farmers to the national capital last month, was cited as one of the main reasons for ruling party’s poor show in the polls.

Also, the Congress party and many regional parties flagging loan waiver in their election manifesto is putting more pressure on the government to go for the same. However, data shows that budgetary support alone is not enough to save the sector. According to IndiaSpend data, the government’s agriculture budget for 2017-18 was up by 111 per cent over four years. Despite the government hiking Minimum Support Price for farmers and taking other major initiatives, the benefits did not reach the intended.

According to a Kotak report, average crop prices over the past few years show that market rates of major farm products have remained largely stagnant over the last five years. “MSPs have increased steadily at a CAGR of 6 per cent for rice, 6 per cent for wheat and 5-9 per cent for pulses, but market prices have increased at a much lower CAGR of 2.5 per cent for rice, 2.7 per cent for wheat and -1.1 to -1.8 per cent for pulses, capped by higher supply,” the report added.

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