With an eye on elections, Modi government has announced various sops to please the distressed farming community in its interim budget 2019. The move has come after the BJP lost power in three states– Chhattisgarh, Madhya Pradesh and Rajasthan, which are predominantly agrarian, with a high share of GDP and employment coming from the agriculture sector.

The budget included various farmer-centric steps such as Pradhan Mantri Kisan Samman Nidhi(PM-KISAN), Rashtriya Kamdhenu Aayog, a new Department of Fisheries and Interest Subvention Schemes.

Rising cost of living combined with falling food prices has led to pauperization of farmers, particularly small and marginal. This can be seen by various farm protests such as Delhi Kisan protest and Maharashtra Farmers’ March and rising farmers’ suicide. Against this background, the above announcement may give some hope to the disappointed farming community.

Madan Sabnavis, Chief Economist, CARE Ratings speaking to Financial Express Online agreed that the budget is a step towards mitigating the agricultural distress, provided it is implemented well. He further said that instead of going for loan waivers, the government has sought to give income to marginal farmers and lower the cost of borrowing for others by increasing the subvention rate to 5 per cent on rescheduled loans. This according to him is a welcome step.

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Rakesh Nangia, Managing Partner, Nangia Advisors LLP, said in a note that the Budget 2019 is revolutionary in nature. The Interim-budget has deviated from the past practice and acknowledged the need for reforms as the FM announced major relief to middle strata of the population from direct taxes and addressed the concern of the farmers and rural economy.

However a few experts point out that the budget is being too ambitious as the government has done nothing to generate revenue. For instance Moody’s has termed the budget as “credit negative”, saying it only has giveaways.

Mr Dhiraj Relli, MD and CEO, HDFC Securities pointed out that the allocation of Rs. 75000 crore per annum for alleviating farm distress is lower than expected. The transfer expected from RBI is also not unusually high, he added.