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Budget 2019: What Nirmala Sitharaman offers to agriculture sector

The budgetary estimate for the Agriculture Ministry for 2019-20 is 140 per cent higher than that for 2018-19 at Rs 57,600 crore, primarily due to Rs 75,000 crore allocation to PM-Kisan

Anand Ramanathan   New Delhi     Last Updated: July 6, 2019  | 18:59 IST
Budget 2019: What Nirmala Sitharaman offers to agriculture sector

The agricultural and allied sectors in India have grown at an annual growth rate of nearly 2.9 per cent from 2014-15 to 2018-19. Women's participation in agriculture has been increasing with 13.9 per cent in 2015-16 from 11.7 per cent in 2005-06. Food inflation based on consumer food price index, maintaining its declining trend, has remained below 2 per cent for the last two consecutive years.

The Interim Budget announced Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) to provide Rs 6,000 in income support to 12.6 crore small and marginal farmers. The economic survey cautioned difficulties in expanding sources of funds for schemes such as PM-KISAN without compromising on the fiscal deficit target as per the revised glide path of 3 per cent of GDP by 2020-21. The fertiliser response ratio has been declining over time. It was expected that the allocation towards fertilisers would remain unchanged or even decrease. The government was expected to increase the Minimum Support Price (MSP), fixed at 50 per cent more than the cost, for 22 crops in the interim budget, further. This would have led to slighter higher inflation.

In the Union Budget, the allocation for the Ministry of Agriculture is Rs 1,30,485 crore and fertiliser subsidy is Rs 79,996 crore for the year 2019-20. The budgetary estimate for the Agriculture Ministry for 2019-20 is 140 per cent higher than that for 2018-19 at Rs 57,600 crore, primarily due to Rs 75,000 crore allocation to PM-Kisan. However, this is Rs 10,000 crore lesser than the allocation in the interim budgetary estimate 2019-20.

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While fertiliser subsidy allocation increased from Rs 70,090 crore to Rs 79,996 crore, innovative pilots of 'zero budget farming' will be replicated across the country to reduce fertiliser dependency. The newly carved out Ministry of Fisheries, Animal Husbandry and Dairying have been allocated Rs 3,737 crore. Of this, Rs 805 crore has been allocated to Pradhan Mantri Matsya Sampada Yojana (PMMSY) to address critical gaps in the value chain, including infrastructure, modernisation, traceability, production, productivity, post-harvest management and quality control.

Allocation under Pradhan Mantri Krishi Sinchai Yojana (PMKSY) remains unchanged from the interim budget at Rs 3,500 crore. The focus is also on the creation of 10,000 new farm producer organisations (FPOs) to improve economies of scale over the next five years. The Budget also outlines setting up of 80 livelihood business incubators (LBIs) and 20 technology business incubators (TBIs) to develop 75,000 skilled entrepreneurs in the agro-rural industry sector. The budget overall was dominated by schemes to reduce financial stress and boost complementary income opportunities towards the goal of doubling farmers' income by 2022.

(The author is Partner at Deloitte India)

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