Agriculture in the interim budget 2019

Dr. Parveen Kumar & Dr. R. K. Arora. Dated: 2/7/2019 11:41:42 PM

As expected, the interim budget of the present government in this election year was tabled in the parliament on Feb 01, 2019. The National Democratic Alliance government led by Prime Minister Narendra Modi is to complete its full five year term within a few months and the new government will be in place by May 2019; so an interim maiden budget was presented by the interim finance minister Piyush Goyal in the absence of the regular Finance Minister Arun Jaitley. An interim budget also referred to as the vote on account is the budget of a government that is going through a transition period. Such type of budget is more common in democracies where a government has to pave the way for other within a few months. As the new government has a different fiscal plan for the country; so the interim budget is presented to help span the transition time between the two governments so that the government can continue to function. It is also required for the government to function in the months it takes for a new government to create its own budget plan. An interim budget provides an estimate of the expenditures to be sanctioned by the exchequer till the full budget is passed.
Agriculture being the backbone of the Indian economy is always being observed keenly for the treatment it gets in the budget. Although India's agriculture budget doubled over five years to rupees 57,600 crore in 2018-19 under present government and three times that of last UPA's budget in 2013-14 with the highest increase of 79 per cent over the previous year in 2016-17. Agriculture generates about 18 per cent of the Gross Domestic Product but sustains 600 million peoples i. e about half of the population in the country. About 70 per cent of the rural household depends primarily on agriculture. Agriculture in the country is dominated by marginal and small farmers. About 86 per cent of the farmers are categorized as small and marginal having less than two hectares of land. This interim budget was presented in the backdrop of the farm distress, the loan wavier, the suicidal tendencies among the farming community, the rising cost of inputs, exclusion of the farming community from the institutional sources of credit, lack of marketing and procurement infrastructure and still a lack of comprehensive insurance coverage. As such the government was under severe pressure to give immediate relief to the farming community.
A few days back agriculture minister Radha Mohan Singh had also said that the budget 2019 will be dedicated to the farmers of the country as a part of the government effort to double their income by 2022. In line with this the interim budget presented by the government in its last year came up with the 'Prime Minister Kissan Samman Nidhi' (PMKSN). under which farmers possessing up to 2 hectares of land will get rupees 6000 per year. This amount will be credited directly into their account thrice in a year. The whole exercise will cost the government rupees 75,000 crore a year and benefit about 12 crore small and marginal farmers in the country. The 'PMKSN' will be operational from December 01, 2018. The frequency of thrice a year has been kept so that the farmers can utilize the amount for purchasing inputs like seed and fertilizers at different sowing seasons. It is here also pertinent to mention that there are three sowing seasons in the country viz. Kharif, Rabi and Zaid. During the sowing season many of the poor farmers in the country have to left their land fallow due to their inability to purchase different inputs. This ultimately effects the total food grain production in the country as well as the food security in the country.
Some experts do believe that the switch over to PMKSN is a beginning of the idea of Universal Basic Income (UBI). With the direct transfer of the money in the account of the farmers; the government has also put to rest any scope for any type of corruption. But at the same time this is not only the solution for the distress among the farming community. The government has also revised the Minimum Support Price for different crops. It is now 1.5 times of their cost of production. But unfortunately most of the farmers in the country are still ignorant of the new MSP of different crops. The result is that the farmers are still being left with no other option except to sell their produce at below the MSP rates. The rates are still being decided by the private players. The government immediately needs to set up the procurement centers at not less than the Panchayat level where the government agencies like the FCI, NAFED etc should procure the food grains from the farmers directly at Minimum Support price. Only than the real purpose of announcing the Minimum Support Price would be achieved. Another intervention worthy would be the crop insurance. At present the crop insurance is also availed by a limited number of farmers in the country. Although the reach of the Prime Minister Krishi Bima Yojana has been widened to include all the farmers but the ground level picture is quite different. Many farmers are still outside the formal frame work of any insurance scheme. With this the government should also focus on the timely credit availability to the farmers. Credit should be provided to them timely at should be hassle free. This should reduce their dependence on the private players who charge a huge interest from them. The farmers' ultimately get burdened and consumes his life. Prime Minister Narendra Modi has also described the budget 2019 as a trailer of the new India to come. Hopefully the relief from the 'Prime Minister Kissan Samman Nidhi' will help the farming community to get some relief securing income security for them and food security for all.
*(The authors are from The Sher-e-Kashmir University of Agricultural Sciences and Technology of Jammu; can be reached at pkumar667 4@gmail.com)

 

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