India's farm sector allocation jumped 90% in the February budget-- but it needs more

  • Finance Minister Nirmala Sitharaman is kicking off pre-budget consultations with India's farm sector.
  • Officials from the Agriculture and Rural Development Ministry will meet the FM today with their demands.
  • The allocation for agriculture including subsidised loans jumped 90% in the vote on account presented ahead of the elections in February.
  • Rural India has been reeling in economic distress and the uncertainty around monsoon may add to its woes this year.

The Budget allocation for agriculture has risen to 90% in the interim Budget from ₹678 billion in the 2018-19 Budget estimates to ₹1.3 trillion. But the Agriculture Ministry officials are demanding more in the upcoming budget on July 5, the first in Narendra Modi government's second term.

The officials will meet Finance Minister Nirmala Sitharaman for pre-Budget discussions on Tuesday (May 11) and are likely to seek more funds for Interest Subsidy for Short Term Credit to Farmers and for Market Intervention Schemes from what has been allocated to in the interim Budget.

Rural India has been reeling in economic distress and the uncertainty around monsoon may add to its woes this year. Over 80 million Indians are directly or indirectly reliant on agriculture for livelihood.

Interest subvention is provided to farm financiers like NABARD, regional rural banks, cooperative banks, public sector banks and scheduled private sector banks for providing short term credit to farmers at subsidized rate of interest.

The Agriculture Ministry will also have budgetary allocation for animal husbandry, dairying and fisheries. In the interim Budget, the government had proposed creation of a separate department for fisheries and a 2% interest subvention on loans to fish farmers to help boost seafood production and exports. Since this sector is a employment-intensive and export-based, the ministry will seek favourable policies towards the sector.

The interim Budget has allocated ₹18,000 crore for the interest subsidy and Rs 3,000 crore for the Market Intervention Scheme and Price Support Scheme (MIS-PSS). Given the stress on doubling farmers' income by 2022 and improving the lot of the farmers even before that, these two schemes may be picthed by the farm ministry for more allocation in the Budget.

The Income Support Scheme has been budgeted at ₹75,000 crore in 2019-20 where as ₹20,000 crore was budgeted last fiscal since the scheme was operational in 2018-19.

The ministry are likely to pitch for the market linkage infrastructure, including warehousing and processing of farm produce.

Rural Development

Rural Development Ministry representatives, who will be meeting the FM along with officials from the Agriculture Ministry, has already seen its allocation up by 5% in the interim Budget.

The ministry is the nodal department for the Mahatma Gandhi National Rural Employment Guarantee scheme (MGNREGA), Pradhan Mantri Gramin Awaas Yojana (PMAY-G), Pradhan Mantri Gram Sadak Yojana (PMGSY) and the National Rural Livelihoods Mission (NRLM), besides some other Centrally-sponsored schemes.

With inputs from IANS

SEE ALSO:
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