From enhancing the allocations for MGNREGS and crop insurance to setting up a new fund for micro-irrigation, it is evident that New Delhi has woken up to the agrarian distress ravaging India’s rural landscape.
While the Budget is being widely criticised for not being dramatic enough, the drama has been tucked away in the subtext. One important clue to the drift in thinking is the announcement of a model law on contract farming that would be prepared and circulated among states to be adopted as the template. Farmers countrywide will await the fine print of this law. The more dramatic of the measures declared in this Budget is the increase in allocation for MGNREGS. At Rs 48,000 crore, this is the highest ever quantum set aside for the scheme. But that is half the story. Though the allocation went up from Rs 38,500 crore last year, the extra money earmarked is only Rs 500 crore more than what was spent in the last financial year, Rs 47,500 crore.
However, it still is a significant amount, when seen against the backdrop of the persistent campaign against the scheme which, according to NREGA designers, has protected millions of landless farm labourers from starvation in the drought years.
The target of Rs 10 lakh crore set for farm sector credit is another important announcement. This, however, is only a little over 10 per cent increase from last year’s target. As massive as the figure seems, it still may not result in an increase in availability of credit for farmers, especially the small and marginal ones. Many are outside the purview of formal banking sector and this Budget is not exuberant on addressing the lack of credit linkages.
Jaitley’s budget does speak of a Rs 1,900 crore plan to integrate Primary Agriculture Credit Societies with the core banking system of the District Central Cooperative Banks. This may help in straightening out the kinks in credit system and making it easier for small and marginal farmers to access loan windows. That’s the one learning from the demonetisation experience that the government has put into practice in this Budget.