Budget 2020 India: The Centre can initiate a consultative process and get the states’ buy-in by offering suitable incentives.
By Ajay S Shriram
Budget 2020 India: Budget FY21 will be remembered for placing the rural economy right up front; the finance minister devoted the initial half hour to agriculture. If we rewind to last year, the headlines were about farmer distress and falling prices. With many safety measures having been rolled out such as income transfer and crop insurance followed by a good monsoon and better price realisation, the farm crises is tad less. This Budget seems to make an attempt to build on the earlier initiatives.
The minister said that “prosperity to farmers can be ensured by making farming competitive. For this, farm markets need to be liberalised.” We now look forward to legislative steps such as repealing of the Essential Commodities Act.
The criticality of “comprehensive measures for 100 water-stressed districts” cannot but be overemphasised. It will focus as much on augmenting water supply as on efficient utilisation of water through drip irrigation, local water bodies, etc. It was remarkable to see the minister connect the country’s commitment to Paris climate accord with farming. By providing 20 lakh farmers with standalone solar pumps and helping another 15 lakh solarise their grid-connected pump-sets will ensure reduced carbon footprint.
The effort towards balanced use of all kinds of fertilisers including innovative fertilisers is a welcome step. Liquid fertilisers and speciality inputs are gaining traction all over the world; however, with access to unrealistically low-priced nitrogen, other nutrients have taken a back-seat. Changes in the fertiliser pricing policy are needed for this idea to take root.
Logistics and transit losses have been a weak link in the supply chain for perishables. Here, Kisan Rail and Krishi Udaan are timely. Also, the proposal for supporting horticulture producing states to adopt a cluster approach of “one product one district” will bring in efficiencies, increase exports and eventually farmer incomes. With dairy forming the largest component of agricultural GDP, facilitation towards doubling processing capacity will have multiple benefits.
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A few points need to be reiterated. One, agriculture is far too important and it should be moved from the State List to the Concurrent List. The Centre can initiate a consultative process and get the states’ buy-in by offering suitable incentives. The time has come to create an Agriculture Council, a statuary framework similar to the GST Council, having representatives of state governments. Two, the vast network of Indian Council of Agricultural Research, agricultural universities and Krishi Vigyan Kendras should be encouraged to work in tandem with industry as well as farmers. It can be achieved by establishing a formal interface mechanism between technology innovators and end-users.
The proof of the pudding is in the eating. The impact of all the commendable Union Budget initiatives will lie in the effective implementation.
Thw writer is Chairman & senior MD, DCM Shriram