Budget 2016: Govt has realised the extent of farm distress

March 01, 2016 1:56 AM

One must understand that the Budget is a balancing act of revenue and expenditure and not about only policy announcements.

By Ajay Jakhar, Chairman, Bharat Krishak Samaj

One must understand that the Budget is a balancing act of revenue and expenditure and not about only policy announcements. The agriculture and irrigation allocations, which have been increased by more than 90% from R25,988 crore for the current fiscal to Rs 47,912 crore, is a tremendous gain. It clearly signifies a course correction in the government thinking and realisation of the extent of the farm distress. It has taken a year for the ground reality to sink in and possibly due to electoral reverses in a few states.

The funding for irrigation projects is a long-term drought mitigation plan and allocation for digging five lakh farm ponds and wells in rain-fed areas will do good. However, I find it worrisome that the finance minister has announced fast-track completion of 89 long incomplete projects under Accelerated Irrigation Benefit Programme (AIBP). A cost benefit analysis is essential of existing programs and useless ones should be shelved to save resources.

The funds allocated to each Gram Panchayat of about R80 lakh each are well taken and hopefully will be done this year itself. There is a lack of mention of agriculture research and development sector in the finance minister’s speech, which is the cornerstone of increasing yields and prosperity, and it is worrisome. A shorter speech could be reason for this anomaly.

Besides, allowing 100% foreign direct investment (FDI) in food processing where fruits and vegetables are procured from farmers is also noteworthy. What has gone unnoticed is the allocation for digitalisation of land records, which is essential for delivering targeted subsidies also.

Allocation to Pradhan Mantri Gram Sadak Yojana, which had languished for some years, has been doubled to R19,000 crore. The allocation of R5,500 crore for ‘Prime Minister Fasal Bima Yojana’ is revolutionary, even though hampered by the fine print which can be sorted hopefully. I have no doubt on the growth predictions being stated, but if it will translate to more off farm jobs is subject to debate. Off farm jobs are essential to reduce the stress on agriculture.

A reform that over 99% of India would have appreciated is an announcement of a moratorium of seventh pay commission that would actually freeze government wages and perks. It would have provided the finance minister with additional annual revenue saving of over R1 lakh crore for investment in agriculture and rural development sector.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.