The rural markets have been a cause of concern with the demonetisation drive augmenting the woes of the rural populace and the economy. With the highest ever allocation to MGNREGA of R48,000 crore putting more liquidity in the rural economy, this increased allotment will aid in maintaining the robustness of the rural economy along with fulfilling the social objective of providing livelihood to the disadvantaged.
Spurring growth for boosting rural infrastructure, the total budgetary allocation of R1,87,223 crore is 24% higher than last year and is likely to spur growth in rural economy.
The rural-focussed Budget has also taken the first substantive step to double farmers incomes by 2022 with supportive measures.
The government’s plan for computerisation of agricultural credit societies will provide adequate and seamless flow of credit to farmers, particularly the small and marginal ones.
Also, setting up of a dedicated micro-irrigation fund by NABARD to achieve the goal of Per Drop More Crop, with an initial corpus of R5,000 crore will assist the farmers in increasing their earnings.
Other notable measures to increase farm income include 100% augmentation of Long Term National Irrigation Fund with NABARD and setting up of a Dairy Processing Infrastructure Fund for R8,000 crore over the next three years (2017 allocation is R2,000 crore).
Apart from employment generation, using of MGNREGA funds to develop productive assets like farm ponds, compost pits, among others, will make agriculture sustainable and resilient to droughts.
In line with the expectations of the sector, the finance minister Arun Jaitley restated the government’s earlier goal of bringing more mandis on the e-NAM platform by allocating R75 lakh per market for setting up cleaning, sorting, grading and storage facilities.
Improving the market access for farmers, e-NAM will be extended from 250 to 585 APMCs.
In a much-needed effort to push agriculture market reforms, states will be urged to de-notify perishables from APMCs leaving the farmer the choice of whom to sell and when to sell.
Integrating production of fruits and vegetables with agro processing units for better price realisation and reduction of post-harvest losses is a forward looking measure.
The proposal to introduce a model law on contract farming is likely to encourage more corporate involvement in the farming sector and also aid in the removal of middlemen for the farmers to get better prices for their produce.
The record allocation of R10 lakh crore for agriculture credit as compared to R9 lakh crore in 2016-2017 is noteworthy. “To spend more in rural areas, infrastructure and poverty alleviation” is a welcome direction chosen by the finance minister.
To cover farmers from losses due to natural calamities, the crop insurance coverage under the Fasal Bima Yojna has been augmented from 30% of cropped area to 40% in FY18 and 50% in 2018.
The fact that total insurance cover provided under the scheme more than doubled in one year to reach R1.40 lakh crore by Kharif 2016, is an indication of the scheme’s success.
This along with the extension of the term of loans under the credit linked subsidy scheme of the Pradhan Mantri Awas Yojana from 15 to 20 years will give the farmers some cushion and tide over the difficult times with two previous seasons of weak monsoon.
– Ajay S Shriram, Chairman & Senior MD, DCM Shriram