The Union Budget 2022-23 is being challenged by many observers and experts for somewhat neglecting the agricultural sector. This is because the FM did not address many key areas of the agricultural sector which were expected to be addressed. The Budget had no special announcement on MSP. On the other hand, it entailed substantial cut of subsidy amounts for agriculture and fertilisers. The total expenditure allocation in agriculture in FY 22-23 has been `1,05,710 crore. This is marginally less than that of FY 21-22. The allocation on fertilisers is `1, 05, 222 crore for FY 22-23 which is less than the allocation in FY 21-22 by 24.9%. At the same time, the FM made eight important announcements that may help the agricultural sector.
Firstly, the FM focused on the need to implement digital high-tech services to farmers, which she announced, will be initiated in PPP mode. Secondly, she announced start-up funds for agriculture and rural enterprises. For this, a scheme was announced where blended capital will be facilitated through NABARD. The fund will be raised under the co-investment model with a view to finance start-ups for agriculture and rural enterprises which are relevant for the farm produce value chain. The start-ups should be involved in some specific activities including providing machinery for farmers on a rental basis at the farm level and in promotion of technology involved in IT based support for farmers’ producers’ organisations (FPOs). Thirdly, the FM proposed the Ken Betwa Link Project. In this project, five river links, namely Damanganga-Pinjal, Par-Tapi-Narmada, Godabari-Krishna, Krishna–Penar and Penar-Kavery have been finalised. The project aims to provide irrigation facilities to 9.08 lakh hectares of farm lands, provide drinking water supply for 62 lakh people and create 103 MW of hydro and 27 MW of solar power. This project has a total estimate of `44,605 crore. For this year, `4,300 crore (RE) and `1400 for FY 22-23 has been announced by the FM. Fourthly, the FM emphasised on kisan drones. This has been used in developed countries for many years. The use of kisan drones will be ensure enhanced crop assessment, digitisation of land records and more efficient spraying of insecticides and nutrients. Fifthly, chemical free neutral farming was highlighted and it was stated that such chemical free farming will be gradually promoted all through the country. It would start with 5-kilometre-wide farm tracks along the banks of River Ganga in the initial stages. Sixthly, the FM announced specified support for millet products. In India, there is huge scope for increasing millet production. Millet can be used for variety of purposes – ranging from human consumption to animal feed. It is also a very important source for the food processing industry. Seventhly, the Budget focused on schemes for oilseed production. It is known that almost two-thirds of the total oil consumption in India depends on import. The Government of India wants to intervene and increase oil seed production by allotting specified funds for this purpose. Lastly, food processing has been given additional attention. The Budget has provided a well-planned package for this segment. Through this focused attention, the government will help farmers in choosing suitable varieties of fruits and vegetables. Additionally, the Budget has also stressed on implementing appropriate syllabi of agricultural universities with a view to meet the needs of natural, zero-budget and organic farming.
Agriculture, the stress ridden rural economy and the allocation
It should be noted that the economy had been in a crisis phase from before the pandemic. Falling GDP in the three to four years before that pandemic - from more than 8% to close to 3% - in the quarters just preceding the pandemic bears witness to that crisis.
Government policies during the pandemic had actually intensified the crisis. Agriculture was the only sector that maintained its growth. But even the farm sector is suffering from declining income and rising costs. Observers think that the rising cost will go up further after the five state elections as the central government can push up electricity and petroleum prices yet again. Given the level of distress in the rural and agriculture economy, the Budget was expected to provide for protection of incomes, employment and basic services to the majority of the people.