“By the time of the 75th year of Indian independence, …India (has to) become a prosperous country and a responsible global power… Madam Speaker, I am mindful of the five major challenges I have to reckon with. Firstly, Agricultural incomes are under stress…” said the Finance Minister in his speech today.
His response to this rightly identified foremost challenge is embedded in three policy statements made in the budget, two sets of budget allocations, and some hope.
The Policy Statements:
1. “I intend this year to work with the States, in NITI, for the creation of a Unified National Agriculture Market”, promised the FM. Such a unified market has the potential to transfer a larger share of the consumer price to the farmer. When the Economic Survey asserts, “If persuasion fails, it may be necessary to see what center can do, taking account of the allocation of subjects under the Constitution of India”, one sees some hope in converting this potential into reality.
2. “I propose to merge the Forward Markets Commission with SEBI to strengthen regulation of commodity forward markets”, said the FM. Hopefully, this will ensure dusting the Parliamentary Standing Committee’s Report on the Forward Contracts (Regulation) Amendment Bill 2010, and introduction of Options and other forward looking instruments.
3. “We need to cut the subsidies leakages, not subsidies themselves” declared the FM. Indeed subsidies are needed for the poor; what we need is a well-targeted system for subsidy delivery. For, these leakages distort the market and act as disincentive to private investments in the sector. As much as 42% of the grain distributed in the Public Distribution System leaks back into the open market per a study. The JAM trinity can help in Direct Transfer of such Benefits, minimize distortion and nurture vibrant markets.
The Budget Allocations:
1. Rs 100,000 Crores is allocated to Rural Infrastructure Development Fund, and various Long & Short Term Rural Credit Funds. This will surely raise the investment capacity of the farmer and step up the Gross Capital Formation in the sector, besides expanding the much-needed rural infrastructure.
2. Funds already allocated to the ‘Deen Dayal Upadhyay Gramin Kaushal Yojana’ and the Scholarships and Loans promised under the ‘Pradhan Mantri Vidya Lakshmi Karyakram’, will enhance the employability of rural youth in non-farm jobs. This will improve the ratio of arable land available per agri worker, which is otherwise deteriorating to unviable and unsustainable levels.
The Economic Survey reiterated the importance of agricultural research, extension, irrigation, mechanisation etc as the key drivers of growth of the sector. Hopefully, the funds allotted under different Government schemes, such as Rashtriya Krishi Vikas Yojana, the National Food Security Mission, the Mission for Integrated Development of Horticulture, the Soil Health Card Scheme, the Pradhan Mantri Krishi Sinchayee Yojana etc, are channeled to appropriately technologise our farming to deal with the extreme weather variations which have now become the norm. Many of these schemes have been folded into the new Krishionnati Yojana, and the funding has been curtailed, with the FM expressing hope that the States will put in the required money from the higher allocations they now have from the 14th Finance Commission formula. I hope that hope is not belied...
It’s only then that the Amrut Mahotsav of our independence will be sweet!