At a time when the agriculture sector is facing distress, Finance Minister Arun Jaitley on Monday stressed the need for more investment and for revamping the incentive structure for farmers.
“The key challenges faced by Indian agriculture are the need to increase productivity by leveraging technology, especially for high-yielding and resistant variety seeds and efficient utilisation of water; adapt the latest IT to increase resilience to nature by phasing sowing, watering, and harvesting; and to increase the price benefits to the farmer by providing timely market information,” Jaitley said, at a pre-Budget meeting with representatives from agriculture bodies..
Read our full coverage on Union Budget
According to an official statement from the finance ministry, Jaitley said these challenges could be addressed by revisiting the incentive structure of farming, use of latest technology to raise productivity, reduce wastage and enhance earnings as well as to improve marketing of farm produce. He said there was a need for more investment in the agriculture sector.
The farm sector representatives sought enhanced budgetary allocations in the Union Budget 2016-17 to improve investment in agriculture, irrigation, research and development, and post-harvesting facilities.
The two-and-a-half hour meeting saw the agriculture bodies demanding setting up of national irrigation authority to give thrust to irrigation projects and river valley authorities for distribution of water, levying charges for water supply and suggesting cropping patterns.
The farmer groups also asked the government to provide loans of up to Rs 5 lakh to all farmers at four per cent interest and sought higher support price and consistent export policy.
The agricultural bodies also sought mandatory crop insurance for all crops, besides a long-term comprehensive export policy for five years to be announced to connect Indian farmers with international markets.
Budget 2016-17 is expected to see significant increase in allocation to marquee programmes such as the Pradhan Mantri Krishi Sinchai Yojana, Rashtriya Krishi Vikas Yojana, Pradhan Mantri Gram Sadak Yojana, and the one to provide soil health cards to the country’s 140 million farmer families over three years to boost the overall rural economy.
The farm sector also sought exemption of income tax on profit made by farmer producers’ organisations and agri-cooperatives, creation of buffer stock of milk powder, outright ban or increase in import duty of butter oil, and imposition of safeguard duty on import of rubber.
Farm bodies also said the government should do away with interest subvention scheme on crop loan and take corrective measures to provide institutional credit to small farmers.
Representatives from various trade unions also gave their representations to the Budget makers. These demands were raised under a 15-point charter submitted by 11 central trade unions.
Jaitley said one of the Modi government’s biggest priority was “to make health and social security benefits accessible to un-organised sector workers like construction workers and migrant labourers, and volunteers of different schemes like anganwadi workers etc. Jaitley added the government was considering a mechanism to provide social security benefit contributions to workers under a single window.
The unions have asked that fringe benefits such as housing, medical and educational facilities and running allowances in railways should be exempted from income tax. Unions suggested that public sector units (PSUs) be strengthened and expanded and the disinvestment of government shares in profit-making PSUs be stopped. Besides, they said the budgetary support should be provided for the revival of sick PSUs.
The unions’ joint charter said the threshold limit of 20 employees in Employees’ Provident Fund scheme be brought down to 10. It said the government and employers’ contribution should be increased to allow sustainability of employees’ pension scheme and for provision of minimum pension of Rs 3,000 a month.