Budget allocation for agriculture in India through the years

India is keenly anticipating the Budget 2019. All the different stakeholders of the country are now keeping their hopes high this time as the country is to face the general assembly election in April – May.

The severe drop in the annual rainfall this year has made the agriculture sector of the nation a crisis ridden one over the times ahead. Hence there are strong anticipations that the spending on agriculture sector in the 2019 interim budget will be an all-time high.

Notably, the agriculture sector sustains the lives of more than 600 million Indians that will make up more than half of the total population of the country.

Over the past five years, there was a sharp rise in the spending towards agriculture. In 2018-19, the total spend on agriculture under the National Democratic Alliance (NDA) government headed by Narendra Modi was about Rs 57,600 crores. Looking back at the allocation for agriculture in 2013-14 budget presented by United Progressive Alliance (UPA) government, we find a sharp three fold increase. A close analysis of the past agriculture budgets will reveal that the highest jump was noticed in 2016-’17 that which showed a whopping 79% hike in spending towards agriculture.

Though NDA’s allocations towards the agriculture sector were more static in nature, the government ensured that the allocation was on an average at 2% of the total spending across all the different sectors when compared to the 1.3% during the second term of the UPA. Also we find that the 2018-’19 taking it up further to 2.3% over the preceding year’s budget.

Agriculture economy makes up about 18% of the gross domestic product (GDP). However, it caters to more than half of the total population of the country. About 69% of the population or 833 million Indians are inhabiting the rural areas and a majority of this segment is below the poverty line. Hence, the agriculture sector is most likely to attract extra consideration when Modi’s government will present its last budget before the upcoming general elections.

In addition, we can say the agriculture sector has become even more important to demand the government’s attention as the Bharatiya Janata Party has lost in three state elections in December 2018, which are all a predominantly agriculture based economies.

Experts see that farm distress was the major factor behind the electoral reverse that challenged BJP’s stronghold. In November 2018, there were a line of protests by more than 200 farmer groups with the principal demand of better prices for their crops and cancellation of debts. After the debacle the government faced in the state elections, the agriculture sector might get a special attention by the Modi government in the interim budget 2019 as the government is most likely to use the budget to please the majority of the country’s population occupied with agriculture.

Anticipations foresee relief packages for the farmers. Already the government had also wooed the farmers stating that the farmer incomes will double by 2022. Hence the priorities in front of the Modi government seem to be clear for the agriculture allocation in budget 2019.