Business Today

Focussed On Rural, Benefits Urban Too

Assured cash transfers to small and marginal farmers might become more inclusive, leading to a new form of universal basic income.
Siraj Hussain | Print Edition: February 24, 2019
Focussed On Rural, Benefits Urban Too

The government has finally decided to swim with the tide and accepted that the best way to help the agriculture sector is to reach farmers directly.

Ever since Telangana announced its Rythu Bandhu (RB) scheme, the debate has centred upon the most effective way to reach farmers. In fact, after the victory of Telangana Rashtriya Samithi (TRS) in assembly polls held in December 2018, the media has led politicians to believe that nothing short of direct support to farmers can win elections.

In this Budget, the Finance Minister has provided Rs 21,100 crore from Pradhan Mantri Kisan Samman Nidhi for direct payment to small and marginal farmers at the rate of Rs 6,000 per annum. Unlike most other schemes, including the flagship programmes of the government, the states do not have to share the cost from their respective budgets. However, the states will surely top up the amount so that farmers will finally get more than Rs 6,000. As payments are to be made to landholders, it is unlikely that the entire allocation of Rs 20,000 crore would be used by March this year. The government will require not only correct land records but also farmers' addresses and bank details to transfer the amount.

During the process of linking a landholder's title documents with bank details, the extent of absentee landlords leasing their land to tenants will also be discovered. That will only make the demand louder for extending the scheme to tenants. If tenants are covered, can agricultural labour and urban poor be left out? It means some kind of universal basic income is only some distance away. One can only hope that such transfers do not crowd out investments in agri infrastructure, required for sustainability of farming.

If the UPA takes credit for National Food Security Act, 2013, the Modi government will rightly claim recognition for PM Kisan Samman Nidhi. Regarding economic policies, both governments are on the same page.

As in several previous Budgets, the government has refused to pay major subsidy arrears. It is estimated that by March 2019, arrears of food and fertiliser subsidies may touch Rs 1.2 lakh crore and Rs 30,000 crore, respectively. With the rising MSP and the government's inability to raise issue prices of wheat and rice, the bill of food subsidy will only increase.

Recognition of fisheries as an important source of livelihood is praiseworthy. And the formation of a fisheries department will give a fillip to the sector that provides direct employment to 1.45 crore people. Extending the benefit of interest subvention to animal husbandry and fisheries is also praiseworthy as small and marginal farmers supplement their incomes by these activities.

In FY2017/18, seafood exports contributed $7 billion. There is an enormous scope of increasing fish production which will not only provide employment but also address protein malnutrition, rampant in northern states.

Computerisation of co-operative societies and the issue of plastic cards to those holding Kisan Credit Cards have been going on under the supervision of Nabard for several years. But the Budget speech says nothing about it. There is no reason to delay it beyond 2020 as it is necessary to bring transparency to Kisan Credit Card loans for agriculture, livestock and fisheries.

For an Interim Budget, this one has made substantial financial commitments, but should a government facing elections in the next three months make such announcements? With the Election Commission losing its prestige and influence, the Supreme Court may have to enact guidelines for interim budgets in the future.

The writer is former Union Agriculture Secretary and Visiting Senior Fellow, ICRIER

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