Lower allocation

Budget for rural India may need to be revisited

The Union Budget 2022-23 has underplayed the need to ramp up the farm sector, which, despite sustained growth during the pandemic, has continued to show signs of distress. Most of the measures presented in the Budget for this sector are virtually repackaged versions of the ongoing programmes. No new initiative has been mooted to cut costs or boost profitability in farming and its allied activities, barring duty reduction on inputs for export-oriented shrimp farming. Further, the outlays for some critical areas have either been curtailed or kept unchanged. These include a hefty cut in food and fertiliser subsidies, reduced funding for the rural employment guarantee programme under the Mahatma Gandhi National Rural Employment Guarantee Act, and the status quo in the allocation for research and development. The funds earmarked for the rural development sector as a whole have also been trimmed, which can have implications for rural demand. The Budget speech made no mention of the progress in fulfilling the commitments made to break the farmers’ 13-month-long sit-in at the Delhi borders. Unsurprisingly, the farmers are, by and large, disappointed with the Budget. While the All India Kisan Sabha has described it as “an act of revenge” for the farmers’ sustained and successful agitation, some other farm unions have called for a meeting to decide on their next move.
 

The most hyped among the measures proposed for the agro-rural sector include the greater digitisation of farm-related services; financial support to farmers’ producer organisations and start-ups; use of drones for crop assessment, land record updating and pesticide spraying; enhancing the production and consumption of millets as health foods; and promoting chemical-free natural farming. Almost all of these are actually works-in-progress. The agriculture ministry had signed agreements in October 2021 with five major national and multinational corporate houses to provide situation-specific and problem-solving knowhow to farmers through digital means. Besides, a digital agricultural mission was also launched last year to promote the use of artificial intelligence, drones and robots for blockchain data upkeep, remote sensing, and other purposes. The government is also offering a subsidy of up to 100 per cent for buying drones under its scheme to encourage mechanising farm operations. The standard operating protocol for operating drones was finalised in December last. Similarly, programmes are already in place to step up the output of millets and popularise organic and zero-budget natural farming.

The move to slash food and fertiliser subsidies has surprised many. It is true that some of the programmes for free distribution of food grains, such as the Pradhan Mantri Garib Kalyan Anna Yojana, are likely to be wound up soon in view of the abatement in the Covid-19 infection, but that is unlikely to rein in the burgeoning food subsidy. The overall cost of procurement, transportation, storage, and distribution of food grains is set to go on swelling, thanks to the steady rise in production and purchases of rice and wheat under the open-ended price support operations. The fertiliser subsidy, on the other hand, is bound to surge due to the persistent uptrend in international prices of plant nutrients. Any saving on these counts may not materialise in the next fiscal year.