On February 1, Finance Minister Arun Jaitley will get down to deliver his fifth annual Budget 2018-19, and, all eyes will be on his announcements for the farm sector, which is going through a downturn in the last few years.
The sector is the spine of the Indian economy that provides employment to half of the total workforce in India and contributes a major chunk to the country’s GDP. This year’s budget can be a landmark in terms of agrarian policies and rural initiatives.
Here, are the top 5 expectations of farm sector from Budget 2018:
1. The agriculture sector is likely to get top priority in the Budget. Slowing agri-GDP growth has shaken the roots of the rural economy. For the full year for FY18, CSO estimates agri-GDP growth at 2.1 percent, which is less than half of 4.9 percent registered for FY17.
2. In FY18, the total allocation for the Agriculture ministry was Rs 51,026 crore — an increase of 6 percent from the revised estimates of FY17. But given the thrust to Prime Minister Narendra Modi’s pet schemes such as the Pradhan Mantri Krishi Sinchayee Yojana (allocation last year – Rs 7,377 crore), the Pradhan Mantri Fasal Bima Yojana (Rs 9,000 crore), the electronic National Agriculture Market and others, there is likely to a bump-up in allocation this year.
3. The Modi government has prepared an action plan to double farm income for farmers in the next 5 years and under the plan has listed many reforms. Experts believe that the said reforms and recommendations should be given a boost through the Budget 2018. As the annual increase in farm income needs to be around 10 percent between FY16 and FY23 for PM Modi’s dream of doubling farmers’ income to come true.
4. According to media reports, to improve credit flow in the agriculture sector, the farm credit target is expected to be raised by Rs 1 lakh crore to a record Rs 11 lakh crore.
5. Credit rating agency, ICRA, in its pre-budget report, said that government is expected to make policy measures and give a stimulus to the agricultural sector — on irrigation, crop insurance and agricultural credit to help cash-starved fertiliser players.
Meanwhile, for the agriculture sector, the Economic Survey 2017-18 while laying down medium-term risks to farm sector from climate change – it projects incomes to decline by 20-25 percent in un-irrigated areas – does not dwell much on the immediate concerns of falling prices of farm produce and dwindling incomes.
At current levels of farm income, the Survey said, adverse impacts of climate change translates into more than a Rs 3,600 per year drop in income for the median farm household.