Budget 2019: What it could bring for India’s farmers

Budget 2019: What it could bring for India’s farmers

There are strong hopes and indications that the upcoming budget could contain some good news for the farmers in the country.

Addressing the gathering during a recent conference, the Union Minister for Agriculture and Farmers, Radha Mohan Singh said, “Union Budget 2019 will be dedicated to the farmer. It will be another step forward, in contributing to the realization of the goal of doubling farmers’ income by the year 2022.”

Amidst rising anticipations, we list out some possible areas that could receive some boost in a way benefiting the farmers of the country.

Development measures

Singh has indicated that the government might implement many programs to develop the agricultural sector and augment the economic condition of the farmers. Part of the government’s mission could work on the areas including bringing down the production cost, announcing profitable prices to farmers, preventing the wastage of farmers’ produce, and creating alternative sources of income to the farmers’ community.

Agricultural credit target and interest rates

Some insider views say that the Modi Government could hike the agricultural credit target to Rs 12 Lakh crore in the interim budget 2019. This will mark a 10% increase in the farm credit target over the earlier budget.

Singh added, "The government has been increasing the credit target for the farm sector every year. This time too, the target is likely to be increased by around 10% or Rs 1 lakh crore to Rs 12 lakh crore for the 2019-20 fiscal." For those looking forward to achieve a higher farm output, credit is a critical input. Institutional credit can enable farmers depend less on non-institutional sources that might charge usurious rates of interest.

The government has also plans to provide 2% subsidy on the interest on short-term farm loans up to Rs 3 lakh resulting in an effective 7% per annum interest rate. The incentive of 3% that will be given to the farmers on prompt repayment of loans within the due date will finally see the interest rates slide to just 4% over the year.

Other measures

Here are a few other expectations from the interim budget and the potential benefit for farmers

  • There could be another round of loan waivers costing the government over Rs 2 lakh crores.
  • There could be measures to bring about some market reforms in the states that can help free up the agricultural markets to benefit the farmers with better earning over their produce.
  • In some states of the country, there is a second consecutive failure of monsoons that is threatening the agricultural economy. As El-Nino could loom large over the coming year, crop insurance can provide the farmers a much needed relief. Hence steps to lower the premiums of agricultural insurance could be part of the interim budget 2019.
  • There could be some provisions of direct investment support to the farmers. This can help reach out the farmers with an efficient, corrupt free and prompt assistance.
  • Across the nation, there is a common consensus that state support is the need of the hour to help farmers survive. There are strong hopes that the interim budget 2019 will pave way for the same.