Budget 2018: Farmer protest in a number of states and subsequent reported erosion of vote share in rural areas, most recently in Gujarat, was one of the biggest political concerns of Narendra Modi government before Budget 2018. The party suffered a number of protests in Rajasthan, Madhya Pradesh and Maharashtra – all three states ruled by it. And later, an erosion in vote bank in rural Gujarat, a state known as the citadel of the saffron party. Pressed to address the problem, political pundits had expected Arun Jaitley to come up with a number of sops for farmers this time. “Our emphasis is on generating higher incomes for farmers. We consider agriculture as an enterprise and want to help farmers produce more from the same land parcel at lesser cost and simultaneously realize higher prices for their produce,” Jaitley said in his Budget 2018 speech.
The biggest bonanza announced for farmers was to provide Minimum Support Price worth 1.5 times of the cost of production for Kharif crops. Further, the government doubled the allocation of funds to boost Food Processing, with Jaitley stressing that specialized agro-processing and financial institutions will be promoted by the government. The government further announced the allocation of Rs 500 for Operation Green, Rs 1290 crore rupees to promote the bamboo sector. Further to give a boost to fishery and aquaculture, the government announced infrastructure development fund and animal husbandry infrastructure fund with a corpus of Rs 10,000. And, “from 10 lakh crore to 11 lakh crore” fund for credit of agricultural activities.
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Looking at the recent history, it is difficult to say that Budget allocation will end Modi’s farmer woes. In 2017, Modi government had seen a steep increase of 24 percent in total allocation for the rural, agriculture and allied sectors. A total of Rs 2 lakh crore was committed for farmers and rural India. Just like this year, the target for farm credit was fixed at a new high of Rs 10 lakh crore. Yet, the allocations didn’t do much and Modi faced farmer’s wrath.
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The agriculture sector which gives employment to around half of India’s working population – was among the worst hit by PM Modi’s November cash ban which led to crashing of produce prices and job losses for the farm sector. Despite hardships, farmers were seen supporting Modi’s move. While the government, like every year, has focussed on providing easy loans, the crucial question of how the same will be repaid remains unanswered. One may well argue that increased MSP will further result in increased income of the farmer. But the implementation and dispensation of MSP remains a question.