Analysis: Amount allocated for various agricultural schemes seems inadequate

February 18, 2019 7:08 PM |

Budget Allocation for Agriculture

The Bharatiya Janata Party (BJP) government raised the agriculture allocation from Rs 57,600 crore to near Rs 1,40,764 crore in the interim budget. It is an unparalleled 144% rise in the interim budget 2018-19.

The agriculture ministry this time has created a benchmark for the upcoming governments by earmarking a share of 5.2% in the total union budget.

As per the budget allocation analysis, this unequalled hike would not be enough in fighting the ongoing agricultural crisis which has led to widespread farm agitations in India. The new income security scheme is short-term, which would provide the eligible farmers just Rs 500 per month (considering a household size of five).

2014-15 and 2015-16 were the two drought years faced by the Agriculture sector. At that time, the average growth was just 0.1% p.a.  As per the data, the ratio of allocation for this sector to GDP remained somewhere between 0.3 to 0.4% during 2014-15 and 2018-19.  During 2014-15 and 2016-17, the private sector investment to GDP ratio came down from 2.2% to 1.8% which has led to an overall decline in investment from 2.6% to 2.1%. Hence, resulted in rural crisis and agrarian distress.

These drought years could have been efficiently managed if the government would have focused on strengthening the irrigation networking systems in the nation. Sadly, no such thing happened.

The Pradhan Mantri Krishi Sinchayee Yojana, 2014-15 (prime minister’s irrigation scheme) has always been underfunded and has seen no rise since its implementation.

The agricultural crisis forced the government to shift the attention towards improving the income of the farmer. In the NITI Aayog’s three-year action agenda, government then promised to double farmers’ income by 2022 wherein they decided to use 2015-16 as the base year. The farm incomes were lower because 2015-16 was a drought year.

The BJP government followed some short-term strategies to raise farmers’ income by increasing the minimum support price in order to make farming more paying.

Another solution to address agri distress was to provide a minimum income support to the farmers. Recently in the interim budget 2019, the government announced an annual income support of Rs 6,000 to every family with less than 2 hectares of land under a scheme titled, Pradhan Mantri Kissan Samman Nidhi.

For the year 2018-19, Rs 20,000 crore has been proposed which would cater only 100 million farmers. This means that a transfer of Rs 500 would be given to farmers per month.

Image Credit: Down To Earth

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