Finance Minister presented her fifth Budget on the eve of domestic economic slowdown, two years of covid-19 pandemic, and the war in Europe that upended the global supply chain and tested the past four union budgets. In addition, this budget was presented taking into account the election for the coming year. After the recovery from COVID-19, many countries were expecting a global economic slowdown in the coming days. From this perspective, only the agricultural sector could boost the economy as we saw during COVID-19.
Many people were expecting a huge investment in the different sectors of agriculture from this budget, but unfortunately the package announced is not sufficient or complete for the sustainable agriculture growth. According to the economic survey, agriculture has grown at an average annual growth rate of 4.6% over the past six years. However, govt attempted to balance and stimulate growth in the agriculture sector by addressing a variety of programs. Few initiatives launched by FM this time should be welcome, such as an Agricultural Acceleration Fund (FAC).This is a good way for the government to stimulate jobs in this sector. It will also provide modern technologies for transforming farming practices, increasing productivity and profitability. Another good decision has been taken for rural infrastructure that will certainly help to promote agriculture and the incomes of rural populations.
The second significant shift is in agricultural credit from 18-lakh crore to 20-lakh crore. But we must remember that this is not the amount given to farmers as a short-term loan for crops. The working capital given to food companies i.e., cold chains, arhatiyas, merchants, large companies, cold storage could well come from this 20-lakh crore target. This measure is designed to stimulate more jobs, ideas and entrepreneurs to stimulate growth in the agriculture sector. Last year, the government increased the farm credit target to Rs 18 trillion for F2022-23 by Rs 16.50 trillion the previous year. Another major part of the budget is a digital public infrastructure for agriculture. It has to be built as an open, standard, interoperable public good. This will enable inclusive, farmer centric solution through a relevant information service for crop planning and health, improved access to farm inputs, credit and insurance, help for crop insurance, market intelligence and support to the growth of agritech industry and startup. The government has also given more stress to natural agriculture through PMMatasyaYojna with a target investment of Rs. 6000 crores.
The capital investment outlay increase by 33%, which gives the right nudge to the industry asks, and shows governments strong resolve to boost private investments in the country's infrastructure development narrative. Govt. plans to establish a decentralised and massive storage capacity to support farmers. The Atmanirbhar Horticulture Clean programme has also put more emphasis on improving cotton productivity. One of the best moves is Shree Anna as it was planned due to the celebration of the millet worldwide year. Now make India a global hub for “Shree Anna”, the Indian Institute of Millet Research, Hyderabad will be supported as the centre of Excellence for sharing best practices, research and technologies at the international level. A major beneficiary of this year's budget is the cooperative sector, where several projects have been announced. The computerization of primary agricultural cooperatives (PACs) has been under way for two decades. It was announced for the promotion of PACS computerization with the total investment of R. 2516 crores. However, a lot more necessary for sustainable agricultural growth.
Investment in R&D could be increased. We must focus on Prime Minister Kishan, crop insurance, interest on subsidies, expenses for the minimum support price, special attention to Northeast agriculture to promote export, a soft import export policy for agriculture. The budget has not increased allocations for rural development actions. Rural development spending has declined from Rs 2.43 trillion in FY23 (Revised) to Rs 2.38 trillion in FY24. Demand for MGNREGA is still high in rural areas. But the allocation for MGNREGA decreased from Rs 89,400 crore in FY 23 (Revised) to Rs 60,000 crore in FY 24 - a significant decrease. This will also have an effect on agricultural production in rural India. Govt. neither has announced DBT in their agenda for next year. Everyone was expecting a huge increase in budget for PM Kishan, which began in 2019 to improve the standard of living of farmers through DBT. However, overall govt. tried to achieve structural shift of the agriculture sector by moving from the production centric to an income centric approach.
(Author is Assistant Professor, Department of Economics, School of Liberal Arts and Social Sciences, SRM University, AP)