Finance minister Arun Jaitley’s 2018-19 budget unveiled on Thursday focussed heavily on agriculture and the rural economy as the government sought to dispel the perception that it is a suit-boot ki sarkar ahead of next year’s general election.
One of the highlights was what it called Operation Green, a scheme with a Rs 500 crore allocation to boost production of tomatoes, onion, and potatoes. An Agri-Market Development Fund has also been set up with a corpus of Rs 2,000 crore to develop agricultural markets. The budget also allocated Rs 2,600 crore for irrigation under the Pradhan Mantri Sinchayee Yojana.
The government also increased the minimum support price of all crops in an effort to lift farm incomes and improve the standard of living of India’s farmers who account for more than 70% of the population.
“We consider it path-breaking because it has given a much-needed impetus to the agriculture sector, the backbone of the Indian economy. Allocations such as Rs 500 crore for Operation Green and Rs 11 lakh crore for the farm sector, among others, would definitely help farmers of the nation get the necessary funding,” said U.S. Awasthi, managing director of fertiliser cooperative IFFCO.
In the long run, Operation Green will strengthen the agricultural and allied sectors by generating more jobs in both the rural and urban economies. Health and wellness firm BVG Life Sciences believes the target of doubling the income of farmers by 2022 is ambitious but the budget allocation makes it achievable.
“I am happy to see the emphasis on agriculture and allied sectors of fisheries and animal husbandry. By linking MSP (minimum support price) to production cost, promoting a cluster-model approach, along with the focus on bamboo, food processing, and market development, I see that the government is aiming to drive professionalism, standardisation, and specialisation in the agriculture sector,” said Hanmantrao Gaikwad, chairman and managing director, BVG Life Sciences.
As part of its plans to boost the farm sector, the government also plans to push agricultural exports. “The government is committed to ensure that farmers get at least 1.5 times their investment … Exports of agricultural products will be liberalised,” the budget said.
While many saw the budget as an opportunity to diversify agriculture produce and grow the food processing industry, critics termed it ambitious and said greater agricultural exports could lead to rise in prices of food products and agricultural commodities. They also expressed concern that the budget did not offer any GST concessions for farm inputs like pesticide, fertiliser, fuel, and mechanisation products.
“Big talk on agriculture, but no real structural change to transform rural economy. Pulses & oil seeds have seen dramatic collapse in prices & imports continue to rise. Paltry allocation to ‘Operation Green' will yield very little. We need retail chains, compression of market chain,” Loksatta Party founder and national president Jayaprakash Narayan tweeted.
Stocks of agricultural companies such as PI Industries Ltd and Excel Crop Care surged on the budget announcements, but the sector’s woes aren’t over yet because of the dangers posed by climate change. Chief economic advisor Arvind Subramanian warned of the perils of climate change for agriculture in the economic survey, saying it could reduce annual agricultural incomes by between 15% to 18% on average. But the issue was not taken up in the budget.
For the moment, farmers have no reason to complain.