Missing farm focus

Budget impact on agriculture blurry

Like his predecessors, Finance Minister Arun Jaitley, too, could not resist the temptation of using the Budget as an opportunity to project a "pro-farmer" image for the government - though there isn't enough in it to show that he is walking the talk. Even while asserting that the government's commitment to farmers ran deep, Mr Jaitley relied largely on strengthening or tweaking measures that have either already been taken or have already been proposed by present and past governments. The significant among these include creation of a unified national market for agricultural produce; extension of irrigation facilities to every field; enhancement of water-use efficiency through micro-irrigation; launching of the national dairy promotion programme; and amalgamation of several existing schemes into a broad-based Krishyonnati Yojana (agricultural development plan). Besides, the Budget has stuck to the convention of annual increases in credit disbursement targets for agriculture, pitching it at Rs 8.5 lakh crore for 2015-16. However, going a step further, it has proposed the creation of some dedicated funds to help achieve this goal. Though the finance minister has listed boosting rural incomes as the first of his five key challenges - after admitting that it has not seen major increases of late - he has done little concrete to address this issue upfront. He, apparently, expects the additional income to come about from indirect measures like an improvement in crop productivity through protection of soil health, enhancement of water-use efficiency through micro-irrigation and expansion of the food processing industry. The Budget has, consequently, set apart funds for two new irrigation promotion programmes called the Pradhan Mantri Gram Sinchai Yojana to extend irrigation to all fields and the Pradhan Mantri Krishi Sinchai Yojana to promote watershed development.

The stress laid in the Budget on forming an open national agricultural market is aimed at achieving the twin objectives of lifting farm income and moderating prices of produce. However, the success of this move, which has been in the pipeline for over a decade, is dicey as agricultural marketing is a state subject and the states' record in amending their laws on agricultural produce marketing committees (APMCs) on the lines suggested by the Centre has remained unsatisfactory so far. The government should, therefore, take up the option of enacting a new central law, as suggested in the Economic Survey, to regulate the marketing of specified commodities to override the state laws in this regard. However, who would benefit more from the national market - the farmers or the traders - remains doubtful, with some saying farmers on their own cannot move their produce over longer distances to realise better prices.

When it comes to resource allocation for the broader farm sector, the finance minister has generally been parsimonious. He, obviously, hopes that the states would chip in with higher allocations as they are slated to get substantially more central resources as a result of the 14th Finance Commission's recommendations. The Mahatma Gandhi National Rural Employment Guarantee Programme is, of course, an exception as the funding for it has been stepped up substantially to generate more jobs, and improve the quality and effectiveness of the activities under this scheme. On the whole, the likely impact of the Budget on the agricultural growth remains blurred.