Budget 2016-2017: 0.5% 'Krishi Vikas Cess' imposed to fund farmers' welfare schemes

The cess is to be used to fund the Centre's heightened allocation for the rural economy

The Union Budget 2016-17 for the first time introduced a 0.05% ‘Krishi Vikas Cess’ on all services to fund its ambitious programme of rural welfare.

The cess would be used to fund the Centre’s heighted allocation for the rural economy.

The increased allocation would be spent on irrigation, which was given an allocation of Rs 12,517 crore in 2016-17, over and above the Rs 5,300 crore allocated in 2015-16.

The Budget which so far has largely been focused on rural India has sought to raise the budgetary allocation to the agriculture sector by almost 100% to over Rs 35,000 crore.

Finance Minister Arun Jaitley also allocated Rs 368 crore for setting up Self-Help Groups (SHGs) for rural development. To boost pulses production, the National Food Security Mission (NFSM) was allocated Rs 500 crore to cover all the 622 villages.

The Pradhan Mantri Gram Sadak Yojana (PMGSY), which plans to connect all the villages in the country with all-weather roads in the next 2-3 years, the Union Budget allocated Rs 19,000 crore, as against Rs 15,100 crore in 2015-16.

The marquee crop insurance scheme, Pradhan Mantri Fasal Bima Yojana (PMFBY), which was launched with much fan-fare in 2015-16, the Central Budget allocated Rs 5,500 crore as Centre’s share on the subsidised premium.

To ensure that farmers get the benefit of Minimum Support Price (MSP)the Union Budget announced a three pronged strategy.