Agriculture . Budget 2019: Farm sector, rural economy hope for a big push

Union Finance Minister Nirmala Sitharaman is presenting her maiden Budget at a time when the farm sector is staring at yet another difficult year. If the current progress of the monsoon is any indication, the country is in for yet another rain-deficient season. A quarter of the current South-West monsoon season has gone by, but both the quantum and the spread of the rains are much below than what was officially forecast.

It is particularly tough for farmers in those States that suffered severe drought last year, particularly Maharashtra, Gujarat, Karnataka and Bihar. Yet another below-par monsoon would mean a further fall in farm production, adversely hitting rural households further. Many farm leaders have been demanding an early action from the government for those districts which suffered both a drought last year as well as 50 per cent rain deficiency till end of June. They have urged the Narendra Modi- government that it should declare these districts drought-hit at the earliest without waiting till the end of the monsoon season, which is the usual practice.

If the rainfall doesn’t improve over the next few weeks, its impact would be much beyond the fields. Apart from water scarcity, it can push the rural economy into a turmoil, seriously affecting rural demand, an upturn of which India Inc is looking forward to to uplift the overall economy and which grew only by 5.8 per cent in the previous fiscal.

MNREG scheme

One way to improve liquidity in rural India is to increase the allocation for schemes like the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) in the coming Budget. Many farmer leaders, for instance, have been arguing that the number of days entitlement under MNREGS should be increased from 100 to 150 days in those drought affected areas and this additional labour could have exclusively used for building water harvesting structures.

The election manifesto which helped the Bharatiya Janata Party (BJP) return to power with an overwhelming majority has made many promises on the farm front. Prominent among them is the commitment to invest ₹25 lakh crore for improving productivity of the agricultural sector — a promise further reiterated in President Ram Nath Kovind’s address to the Joint Session of Parliament two weeks ago. The manifesto also promised pension for small and marginal farmers, which was already approved by the Union Cabinet in one of its first meetings after the taking over of the new government.

The government has already set up a high-powered committee of Chief Ministers with Maharashtra Chief Minister Devendra Fadnavis as convenor to initiate a dialogue on the much-needed reforms in the agricultural sector.

Translating the electoral promises into reality would, however, require financial commitment as well. It is hoped that the Budget would clearly delineate funding for these schemes.

Financial allocation alone will not lead to the success of the scheme. Take for instance the income subsidy scheme, Pradhan Mantri Kisan Samman Nidhi (PMKisan). The Interim Budget may have made financial allocation for distributing an annual sum of ₹6,000 to 12.5 crore small and marginal farmer households, but the benefit has gone to less than 25 per cent of farmers so far. Now the scheme has been extended to all farmers in the country, irrespective of the size of their holdings.

Subsidies for fishermen

Similarly, the BJP-led government fulfilled yet another commitment made in its manifesto by creating a separate Department for Fisheries, but the fishing community thinks it wouldn’t be of much help unless it was given subsidies similar to those extended to the farm sector.

With rising fuel prices, the fishing sector wants the Budget to provide more subsidies on kerosene and diesel to help small- scale fishermen increase their catch.

“The Centre used to give subsidies for fuel to fishers almost two decades back when Ram Naik was the Petroleum Minister in the Atal Bihari Vajpayee government. It is very important for the government to provide fuel subsidies again to help small fishers go deeper into the waters for their catch,” said T Peter from the National Fish Workers’ Forum.

According to Pradip Chatterjee from the National Platform for Fisheries based in Kolkata, the Department for Fisheries should focus more on small-scale fishermen and give them subsidies. “Our present policies are all focussed on large-scale fishermen. We need more sensitivity towards small fishermen, including women,” he said.

The Confederation of Indian Industry (CII) has reiterated its long-standing demand of removing ambiguity in treating seeds as agricultural produce. The Service Tax authorities are of the view that seeds no longer remain as agricultural produce following activities such as drying, sorting, cleaning and fumigation, thus leading to a number of litigations, CII said. It wants the government to intervene and lift this confusion. The chamber also wants the government not to impose commodity transaction tax on agricultural commodities as the agricultural commodity futures market is still in a nascent stage.

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