Budget 2019: Shifting gears in rural India will be important, says Ajay Shriram, MD, DCM Shriram

Published: July 7, 2019 12:43:06 AM

Union Budget 2019 India: The expenditure on agriculture in 2017-18 was `52,628 crore, in 2018-19 it was `86,602 crore, and in 2019-20 the allocation is `1,51,518 crore—almost tripled in just two years, and the major increase coming from the `6,000 per acre income support.

Budget 2019, Union Budget 2019 India, Budget 2019-20

By Ajay S Shriram

Budget 2019 India: In many ways, 2019 is a turning point for rural India. For years we have heard about the importance of access to sanitation, to financial services, to roads, to clean energy and access to risk mitigation.
With initiatives such as Swachh Bharat, Jan-Dhan, PMGSY, Ujjwala, Saubhagya, PM-KISAN, much has been transformed in the countryside and these traditional challenges are largely behind us.

It was now time to shift gears and the Budget has tried to do the same. It views farming as a business and, therefore, the focus is on farmers’ income, plus there is an effort in improving quality of life.

Let’s look at the big numbers. The expenditure on agriculture in 2017-18 was `52,628 crore, in 2018-19 it was `86,602 crore, and in 2019-20 the allocation is `1,51,518 crore—almost tripled in just two years, and the major increase coming from the `6,000 per acre income support.

It is difficult to recall such a dramatic increase in allocation in the past, and that too with zero leakage, on account of DBT. Let’s now look at how incomes and lives will be impacted.

— The Pradhan Mantri Awas Yojana will ensure roof over every head; this is no pipe dream because each house is geotagged and that will ensure transparency;

— The renewed emphasis on the Pradhan Mantri Gram Sadak Yojana will allow farmers to deliver produce to the markets, fresh and without transit losses.

— The creation of Common Facility Centres and incubation of 75,000 skilled entrepreneurs will play an important part in marketing both agricultural and non-agri produce, through better linkages and value addition;

— The plan to incubate 10,000 FPOs will take farmer collectives to the next level as it will help in reducing inputs costs as well as realising better prices. As India urbanises, more marketable surpluses will move from rural to urban, and FPOs can be the critical link between producers and organised retail;

— The centrality of water scarcity can never be overemphasised, and the Jal mission recognises the need for local and sustainable solutions. In addition, the government should gradually and through suitable pricing mechanism encourage water conservation methods and put a cost to excessive usage.

But could the Budget have done more?

Possibly not much in terms of fund allocation, but certainly some fairly important policy areas are still to be covered. They do not have to be addressed on the Budget day, but do need the attention of the government.

The two big challenges are: One, on-ground implementation is always the state responsibility and this often becomes a stumbling block. A better constitutional arrangement to ensure synergy between the state and the central government needs to be put in place.

Two, Indian farmers should not be denied technologies that are accessible to peers globally.

We look forward to the government providing the final push.

(The author is Chairman & Senior MD, DCM Shriram)

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