Union Budget 2021 Expectations for Agriculture: Budget provides a golden opportunity for the government to allay fears of various sections of the farming community.
Credit guarantee scheme for the farm sector -- similar to that for MSMEs -- and some insurance schemes to comfort the farmers may be looked at in the upcoming budget. (Bloomberg image)
Union Budget 2021-22 Expectations for Agriculture: While the upcoming budget will determine the growth trajectory of the Indian economy this year, all eyes will be set on what the government has for the agriculture sector in its briefcase. It has been over a month since the farmers from Punjab and Haryana began protesting against the three farm bills passed in the parliament in September 2020. While the government may roll out measures to compensate the farmers and show a farmer-centric policy, it is also believed that the government has already rolled out a slew of measures for the farm sector and thus no major decision can be taken.
“The government has already implemented a number of schemes for agriculture such as direct benefit transfer under PM Kisan, MGNREGA scheme for farm workers, Rs 1 lakh crore agriculture infrastructure fund, and interest subvention,” Sameer Narang, Chief Economist, Bank of Baroda, told Financial Express Online. Further, credit guarantee scheme for the farm sector — similar to that for MSMEs — and some insurance schemes to comfort the farmers may be looked at in the upcoming budget, Sameer Narang added.
The farmers are agitated over not including the minimum support price in the new laws. Even as Prime Minister Narendra Modi has himself assured that MSP facility will not be withdrawn, the farmers are demanding for adding the provision for MSP in the laws. However, the government has so far not agreed for the same. Nevertheless, in the upcoming budget, the government may allocate extra funds to effectively roll out the new laws.
“Budget provides a golden opportunity for the government to allay fears of various sections of the farming community,” Arvind Sharma, Partner, Shardul Amarchand Mangaldas & Co, told Financial Express Online. Given that the farm laws are projected as new options presented to farmers as opposed to old laws being replaced, Budget 2021 could provide for allocating MSP for key crops and funds for effective and seamless implementation of the farm laws, Arvind Sharma added.
Meanwhile, the agriculture sector had single-handedly supported the economy while other major sectors were at a near standstill amid the lockdown. Even the first advance estimates released by the government on Monday showed that the farm sector is likely to grow at 3.4 per cent in the current fiscal year. It is to be noted that the manufacturing and construction sectors are expected to shrink 9.4 per cent and 12.6 per cent in the full fiscal.