By Ajay S Shriram
Indian Union Budget 2021-22: The build-up for the Budget is a guessing game with sentiments ranging from optimism to undue caution. This time, however, it was different, given the backdrop of Covid-19 and farmer protests. As the FM read her speech, the mood became upbeat, and by the time she completed it there was endorsement of the Budget. It was also a forum for messaging to rural India that the government is committed to their cause, after all the only tax that was levied was the Agriculture Infrastructure and Development Cess (AIDC).
The FM disclosed that in the current year the total value of purchases by the government of four key crops is Rs 75,000 crore for wheat, Rs 1,73,000 crore for paddy, Rs 26,000 crore for cotton and Rs 10,530 crore for pulses. The commitment by the government to a MSP price that is 1.5 times the cost of production across all commodities has been reinforced.
Access to credit is a key driver to improving productivity as well as asset creation in the sector. With the enhanced credit target of Rs 16.5 lakh crore, there will no shortage of resources. It will benefit sub-sectors of animal husbandry, dairy and fisheries.
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The increase in allocation by 25% towards the Rural Infrastructure Development Fund from Rs 30,000 crore to Rs 40,000 crore will ensure better price realisation to farmers on account of lower losses and better value capture. It will be made available to APMCs for augmenting their infrastructure facilities, particularly in the area of cold chains.
The commitment to water conservation has been enforced by increasing the corpus of the Micro Irrigation Fund from Rs 5,000 crore to Rs 10,000 crore through NABARD.
The extension of Operation Greens from tomatoes, onions and potatoes to include 22 perishable products will strengthen production clusters of these crops, creation of farmgate infrastructure and their linkages with consumption centres.
Addition of 1,000 mandis to e-NAM will help strengthen the transparency in agricultural markets.
A multi-purpose seaweed park will help India capitalise on its vast ocean resources as well as R&D capabilities. It will also provide employment in all coastal districts and give a boost to organic farming.
The Economic Survey indicated there is an urgent need to view agriculture not as “rural livelihood” but as “modern business enterprise”. There were expectations the Budget would unleash steps like DBT to farmers, focus on productivity of allied sectors, strengthen agriculture extension services, usage of more efficient inputs and steps around fortification of staples. It is hoped the respective ministries will look into these areas.
The author is Chairman & Sr. MD, DCM Shriram Ltd, and Past President, CII