Farm sector to gain momentum
The Budget 2018 looks like a vision statement of the incumbent Modi government. The government has given much emphasis on agriculture sector. A slew of measures including increasing Minimum Support Price (MSP) to one and half times of the cost of production has been announced.
In continuation to the agricultural market reforms, the Finance Minister, Arun Jaitley, has declared Rs 2000 corpus for Gramin Agricultural Markets (GrAM) to modernise and upgrade existing 22000 rural Haats and connect these gramin haats to the main APMC markets as well as linking them to e-NAM. It is certainly a good move.
The ‘Operation Greens’ has focussed on improving agri-logistics and stabilising price fluctuation of TOP (Tomato, Onion and Potato). These crops are not only price sensitive but also politically much sensitive.
The government has also emphasised on encouraging Fisheries, Animal Husbandry and Livestock activities with an announcement of 10000 crores corpus fund. The fisheries sector has demonstrated a considerable growth over the last decade and will also contribute in doubling farmers’ income.
The Finance Minister has stepped up allocation for institutional credit to the tune of 11lakh crores to benefit the farmers. The NITI Aayog has been asked to find modalities to extend the benefits of institutional credit to tenant and small farmers who have been out of the ambit of formal credit delivery system for last seventy years.
Among others, doubling budgetary allocation for the Ministry of Food Processing Industries, emphasising on Prdham Mantri Krishi Sampad Yojana, hiking the allocation for Pradhan Mantri Fasal Bima Yojana, exempting tax for Farmer Producers Organisations, increasing custom duty on imports, encouraging cluster farming and promotion of organic farming and horticulture will help in augmenting farmers’ income.
While the intent of the government is clear, it is yet to fully make out as to how they are going to implement the proposed schemes especially the MSP given their past experience in organised procurement with limited storage infrastructure. There are many questions involving the fund matrix are yet to be answered.
Importantly, the government has recognised agriculture as an enterprise, a paradigm shift from subsistence farming to commercial activity. There is a need for change of mindset at farm level with focus on diversification and climate proofing.
Though it is not a populist budget, the political undertone is palpable. Given the dismal performance of agriculture sector across the country, the focus of the government to boost farm income and improve rural livelihood is certainly a step in the right direction.