Union Budget 2022-23: Allocations skewed towards cash-schemes in agriculture

The trend, experts said, only addresses the symptoms of the agrarian crisis and not the cause.  

By Shagun
Published: Friday 04 February 2022
Union Budget 2022-23: Allocations skewed towards cash-schemes in agriculture Photo: Vikas Choudhary

Cash-based agricultural schemes received almost 79 per cent of allocations in the Union Budget 2022-23, leaving only about 21 per cent expenditure for ‘core schemes’.

Budgetary allocations were heavily skewed towards cash-based schemes or direct monetary benefits in the last two fiscals as well. Investment to improve agriculture infrastructure was paltry. 

The trend, experts said, only addresses the symptoms of the agrarian crisis and not the cause.

In the Union budget 2022-23, Rs 1.04 lakh crore has been allocated to just five schemes: Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), Pradhan Mantri Fasal Bima Yojana (PMFBY), Modified Interest Subvention Scheme, Market Intervention Scheme and Price Support Scheme; and Pradhan Mantri Kisan Man Dhan Yojana. All these schemes provide cash benefits to individual farmers.

The highest share (51 per cent) among these is of PM-KISAN (Rs 68,000 crore), which provides income support by way of cash benefits to all land-holding farmers

“The kind of long-term perspective you get when you look at the schematic approach of the budget is that the Union government is more focused on individualistic solutions,” Gurpreet Singh, senior policy analyst, Centre for Budget and Governance Accountability, told Down To Earth.

The expert added that the government’s target should have been on:

  • Development of community-based assets like augmentation of water resources
  • Improvement in soil health
  • Good seeds
  • Labs for soil testing
  • Handholding support
  • Good research and extension services
  • Mechanisation techniques

For these kinds of interventions, the sector is left with only 21 per cent of the entire budgetary support.

This is a sign of worry, he added. Cash-based schemes are time-bound and exclusive in nature, Singh highlighted. “PM-KISAN, for instance, leaves out landless, women farmers and tenants.”

He said: The government is targeting the symptoms of the agrarian crisis by saying if incomes are not improving, let us provide direct income support. 

Cash-based schemes are okay but not when there isn’t sufficient support for other schemes that actually address the root cause, according to the policy analyst.

The Centre’s general emphasis on investment in other sectors is not visible in agriculture, said Sukhpal Singh, professor, Centre for Management in Agriculture, Indian Institute of Management, Ahmedabad. 

Funds have not been earmarked for the National Agriculture Market or eNAM, an online trading platform for agricultural commodities in India, the expert pointed out.  “eNam is one of the most important channels for the government to develop agriculture marketing after the repeal of the three farm laws.”

Instead of relying every time on public-private partnership (PPP) model, fiscal resources should be used in building agriculture infrastructure, Gurpreet Singh suggested. 

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