Rural development outlay has declined from Rs 2.43 trillion in FY23 (Revised) to Rs 2.38 trillion in FY24.
The finance minister presented her fifth Budget on the eve of the domestic economic slowdown, two years of the COVID-19 pandemic, and the war in Europe that upended the global supply chain, tested the past four union budgets. In addition, this budget was presented taking into account the upcoming elections next year.
After the recovery from COVID-19, many countries were expecting a global economic slowdown in the coming days. From this perspective, only the agricultural sector could boost the economy as we saw during COVID-19. Many people were expecting a huge investment in the different sectors of agriculture from this budget, but unfortunately the package announced is not sufficient or complete for sustainable agricultural growth.
According to the economic survey, agriculture has grown at an average annual growth rate of 4.6% over the past six years. However, the govt. attempted to balance and stimulate growth in the agriculture sector by addressing a variety of programs. A few initiatives launched by FM this time should be welcome, such as the Agricultural Acceleration Fund. This is a good way for the government to stimulate jobs in this sector. It will also provide modern technologies for transforming farming practices, increasing productivity and profitability. Another good decision has been taken for rural infrastructure that will certainly help to promote agriculture and the incomes of rural populations.
The second significant shift is in agricultural credit, which has been increased from 18-lakh crore to 20-lakh crore. But we must remember that this is not the amount given to farmers as a short-term loan for crops. The working capital given to food companies i.e., cold chains, arhatiyas, merchants, large companies, cold storage could well come from this 20-lakh crore target. This measure is designed to stimulate more jobs, ideas, and entrepreneurial growth in the agriculture sector.
Last year, the government increased the farm credit target to Rs 18 trillion for F2022-23 from Rs 16.50 trillion for the previous year. Another major part of the budget is a digital public infrastructure for agriculture. It has to be built as an open, standard, interoperable public good. This will enable inclusive farmer centric solutions through a relevant information service for crop planning and health, improved access to farm inputs, credit and insurance, help for crop insurance, market intelligence and support for the growth of the agritech industry and startups. The government has also given more impetus to natural agriculture through PM Matasya Yojna with a target investment of Rs. 6000 crores.
The capital investment outlay increased by 33%, which gives the right nudge to the industry and shows governments’ strong resolve to boost private investments in the country’s infrastructure development. The govt. plans to establish a decentralised and massive storage capacity to support farmers. The Atmanirbhar Horticulture Clean programme has put more emphasis on improving cotton productivity.
One of the best moves is Shree Anna as it was planned due to the celebration of the millet year worldwide. Now making India a global hub for “Shree Anna”, the Indian Institute of Millet Research, Hyderabad will be supported as the centre of excellence for sharing best practices, research and technologies at the international level. A major beneficiary of this year’s budget is the cooperative sector, where several projects have been announced. The computerization of primary agricultural cooperatives (PACs) has been under way for two decades. It was announced for the promotion of PACS computerization with a total investment of Rs. 2516 crores.
However, a lot more is necessary for sustainable agricultural growth. Investment in R&D could be increased. We must focus on Prime Minister Kisan Samman Nidhi, crop insurance, interest on subsidies, expenses for the minimum support price, special attention to agriculture in the northeast to promote export and a soft import export policy for agriculture. The budget has not increased allocations for rural development actions.
Rural development spending has declined from Rs 2.43 trillion in FY23 (Revised) to Rs 2.38 trillion in FY24. Demand for MGNREGA is still high in rural areas. But the allocation for MGNREGA decreased from Rs 89,400 crore in FY 23 (Revised) to Rs 60,000 crore in FY 24 – a significant decrease. This will also have an effect on agricultural production in rural India. Neither has the government announced DBT in their agenda for next year. Everyone was expecting a huge increase in the budget for PM Kisan Samman Nidhi, which began in 2019 to improve the standard of living of farmers through DBT. However, the government is shifting from a production centric to an income centric approach.