FM's Day 3 stimulus: Agriculture, allied activities get Rs 1.5-trn package

Opposition, experts say measures do nothing for farmers facing income loss

The announcements Union Finance Minister Nirmala Sitharaman made on Friday will require an expenditure of Rs 1.5 trillion, apart from what the administrative measures relating to them entail. Of this, Rs 35,000 crore will come from the Centre’s Budget over the next two to five years, top government sources told Business Standard.
 

Wednesday’s announcements will have a fiscal impact of nearly Rs 40,000 crore (6.7 per cent), the sources said, in a package of Rs 5.94 trillion. For the ones on Thursday, it is Rs 10,000 crore (3.2 per cent) of the Rs 3.16 trillion. For Friday, it is 23 per cent.

The finance minister on Friday announced a Rs 1-trillion agriculture infrastructure fund for farm-gate infrastructure. She said a financing facility would be provided for funding infrastructure projects like cold storage, warehouses, and yards at farm-gate and aggregation points.

Financial Services Secretary Debashish Panda said the National Bank for Agriculture and Rural Development (Nabard) would create this fund.
 

Another fund, which too will be Nabard’s responsibility, is the Rs 15,000-crore Animal Husbandry Infrastructure Development Fund. Sitharaman said its aim would be to support private investment in dairy processing, value addition, and cattle feed infrastructure.
 

“Incentives will be given for establishing plants for exporting niche products,” she said. While the 2020-21 Budget has allocated Rs 127 crore for the fund, much of the remaining amount Nabard will raise, a top official said.

Government expenditure will fully fund most of the other measures announced on Friday, either through the upcoming supplementary demand for grants or the next two to five Budgets, the official said. Sitharaman announced a Rs 10,000-crore scheme for formalising smaller food enterprises.

“Existing micro food enterprises, farmer producer organisations, self-help groups and cooperatives are to be supported,” she said.     

“The focus will be on women and SC/ST-owned units and those in aspirational districts, and a cluster-based approach will be followed,” she said.
 

The official said this would be a multi-year scheme and the amount would come from future Budgets.
 

The minister also said the amount spent on the Matsaya Sampada Yojana, an existing scheme, would be Rs 20,000 crore for the next five years.

The other multi-year schemes she announced included initiatives to promote herbal cultivation and beekeeping, and extending a central scheme to all fruit and vegetables. These would involve an outlay of Rs 5,000 over a few years, the official said.
 

Sitharaman also spoke about the National Animal Disease Control Programme, which would cost the Centre Rs 13,343 crore over the next five years. However, the scheme and its outlay were approved by the Union Cabinet in June last year and hence cannot be considered a new programme.
 

While some analysts welcomed Friday’s announcements, others, including Opposition figures and sectoral experts, said there was no relief or compensation for farmers facing massive income losses due to the nationwide lockdown.
 

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