Budget 2019: Why FM Sitharaman should have expanded PM-KISAN scheme to cover fertiliser, power subsidies

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Updated: July 6, 2019 5:31:51 AM

Union Budget 2019 India: PM-KISAN should have been expanded to cover fertiliser and power subsidies

Budget 2019-20, Union Budget 2019 IndiaUnion Budget 2019 India: These are all laudable steps in the right direction, although one will have to see how they are achieved in due course.

Budget 2019 India: In her first budget speech, the Union finance minister Nirmala Sitharaman reminded us of the famous quote of M. K. Gandhi that the ‘Soul of India lives in villages’. She also said that for Gramin Bharat, her focus is on ‘Gaon, Garib, and Kisan’. She spelt out certain schemes, but the overall focus was on strengthening infrastructure through PM’s Gramin Sadak Yojana (PMGSY), making Annadata also an Urjadata (i.e., converting farmers into producers of solar power), strengthening e-NAM, focusing on fisheries through Matsya Sampada Yojana, etc. She also reiterated the PM’s promise of supplying piped water to every home by 2024, while reminding that 1,592 blocks in the country are critical and over-exploited.

These are all laudable steps in the right direction, although one will have to see how they are achieved in due course. One notable thing in the various schemes announced for agriculture was the absence of emphasis on doubling farmers’ real incomes by 2022. Maybe, reality has dawned on the government that this is an uphill task, and they may not achieve even half the target. So, no more echoing of that.
But to know the real action in agriculture, one has to see the expenditure budget for Ministry of Agriculture and Farmers’ Welfare, which has jumped from `67,800 crore in 2018-19 (revised) to `1,30,485 crore for 2019-20, (budgeted), a jump of more than 92%. And, this is mainly coming from PM-KISAN, which jumps from Rs 20,000 crore to Rs 75,000 crore. This is the biggest policy shift, a move towards direct income transfer, which was an election promise. As far as other schemes are concerned, there is a marginal change, and nowhere near PM-KISAN. There are no significant reforms or strategies announced for boosting agriculture and farmers’ incomes.

The most disappointing thing is that allocation for agri-R&D has remained almost constant. The budget for the Department of Agriculture Research and Education (DARE) is kept at `8,078 crore compared to `7,953 crore for 2018-19 (revised). This is less than even one global company’s expenditure, say, Bayers’, on agri-R&D. The Economic Survey had highlighted that India spends only 0.37% of agri-GDP on agri-R&D. The global consensus is that developing countries need to spend at least 1% of agri-GDP on agri-R&D if they want to raise productivity sustainably and ensure food security, as also augment farmers’ incomes. The rate of return from agri-R&D is one of the highest. The neglect of this agri-R&D will haunt India in the years to come. Already, the rate of growth of agriculture exports in the first five years of Modi government has been negative! So, the whole talk of doubling agri-exports in five years, or even doubling farmers’ incomes by 2022, sounds empty in the face of such low expenditures on agri-R&D. Without continuous research, and augmenting productivity, the competitiveness of Indian agriculture will soon be lost.

There is, however, talk of zero-budget agriculture. Organic is fine for the niche markets, but for mass production at low cost, it is Science. One wonders whether Modi 2.0 is anti-science and anti-R&D?
Since PM-KISAN is the main flag march in agriculture, one would have expected some fine tuning of it and expanding it to cover fertiliser subsidy, and even a hint to bring power subsidy under it. But nothing has happened on any of these fronts. Fertiliser subsidy has gone up from Rs 70,000 crore to about Rs 80,000 crore. The pending bills of about Rs 30,000 crore of fertiliser industry remain as they were, demoralising the fertiliser industry.

Also read: Budget 2019 offers relief for start-ups, but road map missing

On the irrigation front, the situation remains alarming. Despite highlighting 1,592 blocks being overexploited in 256 districts, the budget for PM Krishi Sinchayi Yojana, though up by 17%, remains minuscule at Rs 9,681 crore. This is not enough to take care of the irrigation needs of agriculture or promoting efficient use of water. Within this PMKSY, the per drop, more crop scheme is budgeted at just `3,500 crore, way below the needs.

With all of this, if there is no big push towards agri-research (read better and high yielding seeds), any rationalisation of fertiliser subsidy, and with meagre investments in water, what shall be the future of Indian agriculture and millions of farmers dependent on it? It does not augur well for India’s peasantry. Is it that PM-KISAN is cutting down on much-needed investments and agri-R&D?

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