The Hindu Business Line : Farmed out

The first Budget of the new UPA Government presented by the Finance Minister, Mr Pranab Mukherjee, is likely to be remembered not so much for what he did as for what he omitted to do for the farm sector. One of the challenges before the Government, Mr Mukherjee pointed out in his speech, was to “ensure that Indian agriculture continues to grow at an annual rate of 4 per cent”. For the record, farm growth in 2008-09 was a paltry 1.6 per cent, and there is little to suggest that 2009-10 would be significantly better. The Budget proposals such as interest subvention on farm loan, higher allocation for Rashtriya Krishi Vikas Yojana and accelerated irrigation program, and higher target for farm credit flow are welcome measures, no doubt. Also welcome is the enhanced Central Plan outlay for agriculture and allied sectors by Rs 660 crore. Investment-linked tax incentive for setting up warehousing and cold chains would help attract more players to invest in rural infrastructure. Yet, it would be naïve to believe that these measures would energise the moribund agricultural sector or help raise productivity and production of a wide variety of crops. We need to go beyond these fiscal measures.

As agriculture consists of several sub-systems with intra- and inter-sectoral linkages, a holistic view is warranted. Indian agriculture not only deserves a big step up in public investment for strengthening the input delivery system, expanding irrigation, improving agronomic practices and for building rural infrastructure, but also urgently needs an outcome-oriented perspective in the implementation of public programs. Interestingly, the Finance Minister did admit that it is a challenge to re-energise the Government and improve delivery mechanisms; but did not go beyond that statement of pious intention. For the farm sector, improving the delivery mechanism is what he should have focussed his attention on. Currently, there is little accountability on the part of those charged with implementation of projects and schemes. Take irrigation. It needs not only investment, but also modern management. In the last eight years, several tens of thousands of crores have been spent on ‘creating irrigation potential’. Yet on the ground, the irrigated area under major field crops has not shown any marked expansion. A number of major and medium irrigation projects are languishing due to cost-and time-overruns and need additional funds for the so-called ‘last mile’ connectivity.

While the Government’s policy initiatives are targeted at stimulating the supply side, growth on the demand side is sharply trending upwards. Linking growth of food market to farm is actually the biggest challenge for the present Government to grapple with. So, the annual farm growth target of 4 percent could still be a pious hope, unmatched by an action plan on the ground.

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