bPresenting the last full budget before the 2024 Lok Sabha elections, expectations were high from Budget 2023, which was presented by Finance Minister Nirmala Sitharaman on Wednesday. For example, it was believed that the amount given to farmers under the PM-Kisan scheme would be increased. While some expectations were successfully met, there were also some disappointments. Here’s a quick look.
some hits
Creating unicorns from women-led FPOs and SHGs: About 75% of the women workforce in India is employed in the agriculture sector of the country (PLFS 2020-21). Organizing rural women into self-help groups and finding ways to scale up their operations and help them sustain professionally is a welcome and much needed step.
Creation of a digital public infrastructure for agriculture: An open source and interoperable public good ready to leverage truly detailed data that can be used by the government to improve policy formulation and implementation.
Focus on Agri-entrepreneurs: India is becoming the entrepreneurial hub of the world. Through a fund dedicated to start-ups in rural India, Sitharaman rightly emphasized the value-chain approach in the agriculture sector. He suggested that the start-ups focus on ensuring high quality production and providing higher profitability to the farmers.
There is no specific mention of any crop other than cotton in the Budget 2023 speech. Cotton inflation has been in double digits in the last calendar year and crop yields have been under a perennial threat from pests. Sitharaman offered to create cotton clusters and invited closer partnership between farmers, seed suppliers, extension agents and traders.
millet was previously named Nutri-cereal in 2018-19 and from this budget will now say Mr. Anna, 2023 has been set as the International Year of Millets. by providing support for the research and development of Mr. AnnaSitharaman highlighted the need to improve the yield and quality of our crop.
ethanol from cropsIndia’s oil marketing companies (OMCs) require ethanol to meet fuel-blending targets and pharmaceutical industries need it to make sanitizers, disinfectants, etc. by-products), industrial needs are met largely through a combination of domestic supplies and imports from the US. In Budget 2023, duty on imported denatured ethanol was reduced to 5%. The policy move in one stroke improves domestic availability for industries as well as the availability of indigenously produced ethanol to meet E20 fuel-blending targets by 2025-26.
Read also: Ethanol blending is key to cutting oil imports but doubling it will hurt India’s food security
missed something
The allocation for the Ministry of Agriculture and Farmers Welfare (MoAFW) in Budget 2023 is low. This was unexpected given the impact of climate change and the high level. food inflation Last year was so intense. Compared to last year’s (budgeted) amount, this year’s budget for the agriculture ministry is about Rs 7,500 crore less, with its share in the country’s total budget falling from 3.4% to about 2.8%.
Climate Change and Mitigation: Better allocations on climate resilience and mitigation efforts are expected due to talks about the developing El Niño in the Pacific Ocean and its possible adverse impact on our upcoming monsoon, and the adverse effects of higher temperatures and erratic monsoons on the country’s major crops last year Can , Alas, no such indication is visible in Budget 2023. The Rashtriya Krishi Vikas Yojana (RKVY), which has absorbed this climate-related budget item, has actually been allocated less than last year. The previously mentioned “Climate Change Action Plan” no longer has a dedicated budgetary allocation.
Irrigation: According to the latest data available with the Directorate of Economics and Statistics (DES), about 52% of the country’s gross cropped area is under assured irrigation. The rest of the area depends on monsoon rains to irrigate crops. Budget for PM Krishi Sinchayee Yojana (PMKSY) Scheme – Major Irrigation Scheme which includes water to every field and the Accelerated Irrigation Benefit Program (AIBP) under which projects were implemented to renovate and restore water bodies, provide surface minor irrigation and other water management expenditure – reduced from last year’s budget of Rs 10,950 crore to about Rs 8,600 crore Crore has been done.
MGNREGA: Allocation under the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) has been reduced from Rs 73,000 crore last year (actual expenditure Rs 89,400 crore) to Rs 60,000 crore for the coming year. Compared to the actual expenditure in 2022-23, next year’s MNREGA allocation is about 33% less. It is an important employment guarantee scheme for Indian workers. It provides minimum livelihood assurance to the families in rural areas.
Operation Greens: Operation Greens was announced in 2018-19 due to excessive production and price volatility in India’s top crops (tomato, onion and potato). The outlay of this scheme was Rs.500 crore. The scope of the scheme was extended to include all fruits and vegetables by 2020. For 2023-24, the outlay for the scheme has been reduced by over 50% to Rs 214 crore. India is grappling with high double digit inflation in most of these horticulture crops, mainly TOP.
Some important aspects such as climate resilience schemes, crop diversification schemes (especially to move away from wheat and paddy), and plans to mainstream tenant farmers will be left out of next year’s budgetary support as in previous years.
Shweta Saini is an agricultural economist and co-founder of Arcus Policy Research. Thoughts are personal.
(Edited by Prashant)