Finance Minister Nirmala Sitharaman will be presenting the Modi government 2.0's full-year Union Budget 2019 on July 5, 2019. Nirmala Sitharaman's biggest challenge for the Union Budget will be to stay away from the populist measures like farm loan waivers and tread the middle path with stress on the rural economy. In the NDA's interim Budget, Modi 1.0 had taken a risky call against doling out waivers, and Modi 2.0 will be well advised to stay on course.
FULL COVERAGE: Union Budget 2019
In a bid to counter India's agrarian distress and encourage farm sector, FM Nirmala Sitharaman's Union Budget 2019 may opt for a new strategy and give loans to the farmers instead of waiving them off. During the launch of its Sankalp Patra (2019 Lok Sabha election manifesto) ahead of the elections, BJP had promised to provide short term new agriculture loans of up to Rs 1 lakh at 0 per cent interest rate for 1-5 years on the condition of prompt repayment of the principal amount.
Short term loans are important as it allows farmers to maintain and increase their productivity and allows them to purchase modern costly inputs and adopt new technologies for the farms. At present, farmers get loans with the Kisan Credit Card (KCC) at 7% per annum and the government offers interest subvention scheme of 2% for short term crop loans of up to Rs 3 lakh. Additionally, on prompt repayment, an incentive of 3% is credited to the farmer's account. However, if a borrower fails to repay the loan within the due date, the interest is applied at the card rate.
In order to help the farmers, the government had assured income support to marginal and small farmers (MSF) via the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme. The Central Government has already fulfilled this poll promise and notified a decision to extend the benefit of Rs 6,000 per year under the scheme to all 14.5 crore farmers in the country. The announcement of Pradhan Mantri Kisan Pension Yojana, a contributory pension scheme for small and marginal farmers was also made during the interim Budget to provide social security to them. Under the scheme, farmers in the country will get a minimum monthly pension of Rs 3,000 on attainment of 60 years of age. The scheme will cover five crore farmers and cost Rs 10,000 crore. It will be a voluntary and contributory pension scheme with an entry age of 18 to 40 years.
In the next five years, BJP has promised to create a National Warehousing Grid, invest Rs 25 lakh crores in farm/rural productivity. The government also hopes to institute an export-import policy to empower farmers by reducing agricultural imports and encouraging exports.
Edited By: Udit Verma