The budget doesn’t think India is a farm economy

Agriculture accounts for just 14 per cent of the country’s Gross Domestic Product (GDP) but 42% of total employment.

Published: 06th February 2022 08:03 AM  |   Last Updated: 06th February 2022 08:28 AM   |  A+A-

Union Budget

Image used for representational purpose only. (Photo | EPS)

Express News Service

After the high of a ‘growth-oriented’ budget, pumped up by the swish talk of industry reps, comes the hangover of the morning; and the feeling that all is not right. The two big holes now being seen in the finance minister’s Union Budget FY2023 is the lack of commitment to agriculture and to creating jobs. 
This is not to say these did not find mention. A wag counted and said Nirmala Sitharaman mentioned the word ‘agriculture’ 7 times in her speech.

On a serious note, the sector needs support desperately. It accounts for just 14% of the country’s Gross Domestic Product (GDP) but 42% of total employment. It’s a stark imbalance. Putting it another way, agriculture is the primary source of livelihood for 58% of the population. For starters, there is not a whisper of the much-talked-of target of doubling farmers’ income, a big omission considering the target for achieving the feat had been kept for 2022, India’s 75th year of Independence. The promise was made by the Prime Minister on 28 February, 2016. 

Understandably the FM did not bring it up. It would have been a huge embarrassment. The government’s figures estimated in 2016 the annual farm income to be Rs 96,703, or Rs 8,060 a month. Factoring in inflation, doubling of income will translate to Rs 21,146 a month. We are nowhere near that figure. What we do know is that average monthly income of farm households in 2018-19 was Rs 10,218 per month in nominal terms, as stated by the 77th round of Situation Assessment Survey of Agricultural Households in 2021.

Rural India gets short shrift
In a nutshell, the following is what is there in the Budget for agriculture:

  • Rs 2.37 lakh crore minimum support price (MSP) for procurement of wheat and paddy.
  • Chemical-free farming to be promoted initially on 5 Km wide corridors along the Ganga.
  • NABARD to finance a start-up fund for agriculture and rural enterprise.
  • ‘Kisan Drones’ for crop assessment, digitization of land records, and spraying insecticides.

Of these, the only substantial allocation in the procurement for wheat and paddy of Rs 2.37 lakh crore. This is a step down from the MSP allocation in the 2020-21 budget when it was Rs 2.42 lakh crore. The other proposals - for organic, non-chemical farming along the Ganga, a fund for agricultural start-ups and ‘kisan drones’ - all sound good, but where are the funds? There’s only Rs 198 crore allocated for development of organic farming in the North-East. 

Soumyadip sinha

It’s not just about outlays, the philosophy of the Budget gives a total miss to agriculture. Besides wheat and paddy, there is no MSP package for any other crop; nor is there any pushfor crop diversification. 
Research and crop diversification, the backbone of agrarian growth, has got no money. There is a meagre allocation of Rs 100 crore for Parampragat Krishi Vikas Yojana (organic farming), down from the earlier Rs 450 crore. There is also noreduction of the burden on farmers by cutting GST on the high cost of seeds, fertilizer, farm equipment and other inputs.

No jobs either
Is it political shortsightedness too? The Union government rightly pulled back on the farm laws and tried to make peace with the farming community a few months ago. The move was widely interpreted as a necessary compromise with elections looming large in Punjab and UP. However, what prevented the government to carry forward the initiative to give a booster dose to the teetering farm economy? 

In a statement, the All India Kisan Sabha calls the budget an ‘an act of the revenge’ on the farmers movement. “Farmers demand for assured procurement at remunerative prices and loan waiver, have met with callous indifference. Total allocation was Rs 4.75 lakh crore in 2021-2022 (Revised Estimates), that has now fallen to Rs 3.70 lakh crore, a cut of over Rs one lakh crore,” says the statement. 

Rural jobs and employment too have been given a miss. Let’s take a quick look at the government’s largest employment programme — the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) — which guarantees 100 days of work a year. 

The Budget allocated Rs 73,000 crore for this year, same as the Budget Estimates for 2021-22. But in the Revised Estimates of FY2022, the allocation was enhanced to Rs 98,000 crore. In this context, the Budget Estimates for 2022-23 are way short. In fact, in 2020-21, the actual expenditure on MGNREGS was Rs 1,11,170 crore .

The government unfortunately is clutching on to a trickle-down theory - a hope that its intense spending programme in infrastructure of Rs 7.5 lakh crore will kickstart new projects which will spin-off lakhs of jobs. It doesn’t happen that way. Generating jobs has to be planned and specific allocations made. This has been repeatedly proven, but who’s listening? 


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