In a country where 44.5 per cent of the population depends on agriculture as its main occupation, the Budget’s special focus on the sector is imperative. This explains the 16-point mega-plan announced in the Budget for agriculture. The focus on agriculture is crucial for two other reasons too: These are slow job creation in non-agriculture, affecting the shifting of the workforce from agriculture, and sustainable development.
Various experts and policy pronouncements by the government have emphasised the need for reforms in agriculture, diversification of production, improvement in infrastructure, a larger role for the private corporate sector and new commerce and formulating an institutional mechanism in the sector. Action on these aspects has been either very slow or missing. This Budget has taken a comprehensive view of the issues concerning agriculture and announced major plans.
The first and foremost step covers reforms in agriculture which include reforms in the APMC Act, adoption of the Contract Farming and Services Act, and changes in the land-lease law to facilitate leasing in and leasing out of agricultural land. Agriculture being a State subject, changes in these Acts come under the purview of States. Recently, some States have taken bold initiatives to liberalise and open up the agriculture sector through these reforms.
Uttar Pradesh has passed and notified a land-lease law which is very progressive and more advanced than the Model Land Lease Law proposed by the NITI Aayog. Tamil Nadu has adopted the Model Contract Farming Act and Arunachal Pradesh has adopted the Model APMC Act as proposed by the Centre. Some concrete steps will be required to take States on board to go for early implementation of the three reforms mentioned in the Budget.
Infrastructure is the second-most important factor after reforms for the transformation of agriculture, which has been emphasised in the Budget. The problem of gluts, heavy post-harvest losses, poor connectivity of hinterlands with towns, and slow transport are major hindrances in diversification towards perishable and semi-perishable high-value products. The Kisan Rail and Krishi Udaan announced in the Budget are unique measures to provide fast market connectivity to farm produce. This will be a boon for high-value farming in the North-East and other parts with poor market links.
The Budget highlights measures for diversification within and beyond crop sector. With their growth rate exceeding 7 per cent, fishery and livestock are impressive examples of market-driven growth. A favourable policy environment, credit and institutional support announced in the Budget will help in sustaining high growth of these sectors for many years. They are also important in realising the goal of doubling farmers’ income by 2022.
The writer is Member, NITI Aayog
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