Union Budget 2020-21: Not one to double farmers' income

Last year's allocartion goes unspent; this year's raise less than 3%

By Jitendra
Published: Sunday 02 February 2020

Union Budget 2020-21 could not inspire confidence in the government’s plan of doubling farmers' income by 2022. It increased allocation to the agriculture department by a mere 2.9 per cent over the previous budget. Worse, it seems the department will not be able to spend that previous allocation.

Finance minister Nirmala Sitharaman allocated Rs 1,34,399.77 crore to the Department of Agriculture, Cooperation and Farmers Welfare on February 1, 2020. Of the Rs 1,30,485.21 crore allocated in 2019-20, the Union government may be able to spend only Rs 101,904 crore, according to revised estimates.

The largest chunk — Rs75,000 crore — of the farm budget for 2020-21 went to Pradhan Mantri Kisan Samman Nidhi (PM-Kisan), the scheme for providing cash support to farmers. It was allocated the same in Budget 2019-2020, but revised estimates peg spending at only Rs 5,4370.15 crore.

In its interim budget before the general election, on February 1, 2019, the Narendra Modi government announced PM-Kisan, under which the central government would provide Rs 6,000 per year to small and marginal farmers in three equated instalments.

Down To Earth investigation in October 2019 found that only 25 per cent farmers in the country received all three instalments in the first year of the scheme. The scheme was designed in a way that all farmers could not receive all three instalments. 

16-point action plan 

Sitharaman announced a 16-point action plan for doubling farm income on February 1. It included measures to provide farmers access to faraway markets by running trains (Kisan Rail) and flights (Krishi Udaan) and providing relief to farmers from water shortage. But these announcements too have received poor response from farmer leaders and experts.

“This 16-point action plan is not going to cover more than 10 per cent farmers of the country,” said Rakesh Tikait, president of Bhartiya Kisan Union, terming budget disappointing. “This budget also reduces the subsidy on chemical fertilisers, which is going to impact productivity as well as income of farmers,” he added.

Ravindra Pastor, co-founder and CEO of E-FASAL, a Bhopal-based Agribusiness that provides electronics farming solution to farmers, said most of the 16 points are already covered in different schemes under different names and, therefore, the announcements would not bring any change in the agriculture sector.

Experts said influx of money into the rural economy in a big way could have revived the rural economy.“The government  should think about providing an income of Rs18,000 per month to farmers to counter the agrarian distress,” said Devinder Sharma, a Chandigarh-based agriculture and trade policy analyst. “The government has missed another chance to revive the agrarian sector,” said Ramandeep Singh Mann, a Delhi-based farmer activist.

However, International consultancy PricewaterhouseCoopers said the 16-point plan was a positive development. “Systematic coverage of agriculture sector through the 16-point agenda reflects a definite intention to bring fundamental development in agriculture and allied sectors. Covering allied sector and important thematic areas can surely work towards aspirational agenda of the government,” Ajay Kakra, leader, food and agriculture, PwC India, told Down To Earth.

The budget for agriculture insurance schemes was increased from to Rs15,695 crore from Rs 13,640 crore (revised estimate for 2019-20). The budget for Rainfed Area Development and Climate Change was reduced to Rs 202 crore from Rs 250 crore. The budget for agriculture research and education was marginally increased to Rs 8,362 crore from Rs 8,078.76 crore.

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