On February 1, Union Finance Minister Nirmala Sitharaman presented the central government’s budget for India for the upcoming financial year 2022–23. The total projected expenditure for 2022-23 is Rs 39.45 lakh crore. Of this, about 3.1 per cent or Rs 1.24 lakh crore is the share of the Department of Agriculture and Farmers’ Welfare. Out of this share, three schemes – PM Kisan, Rs. 68,000 crores; interest subvention on short term credit, Rs. 19,500 crores; and crop insurance, Rs. 15,500 crores – take away Rs. 1,03,000 crores. The two other major schemes are Rashtriya Krishi Vikas Yojana (RKVY) and Krishi Unnati Yojana (KUY).
Repairing important schemes
Rashtriya Krishi Vikas Yojana (RKVY): This 2007–08 central government scheme is a relatively flexible one that gives autonomy to state governments to prioritize schemes within the larger allocation. Depending on regional and local priorities, states could decide on interventions under this programme. Over the years, the scheme has been tapered down. However, it has been increased by 422 percent this year, from Rs. 2,000 crores (RE2021-22) to Rs. 10,433 crores. This reinforces the Centre’s drive to give some more autonomy to states and allow them to take forward the baton of agricultural reforms and growth.
Krishi Unnati Yojana (KUY): With an allocation of Rs. 7,183 crores, KUY makes its refreshed debut in India’s budget statements. First introduced in 2016-17 as a cluster of 10 schemes with a budgetary allocation of Rs. 7,580 crores, the Krishi Unnati Yojana has been reintroduced in 2022 with a different set of 10 schemes and a budgetary allocation of Rs. 7,183 crores. This time it combines, under its ambit, some of the older “green revolution” schemes. About 26 per cent of these funds are for the development of the horticulture sector. Oilseeds and edible oil prices have been on fire last year, particularly owing to the high global prices. So, to encourage their domestic production and processing, about 21 per cent of KUY funds are allocated to palm, edible oil, and oilseeds.
Pointing others
Paramparagat Krishi and Organic Farming: In the reshuffle of schemes under KUY, one interesting fact has come to notice. Organic farming, zero-budget farming, and Paramparagat kheti (traditional farming) seem to have lost their sheen. Introduced in 2019, zero-budget farming was positioned as one of the key drivers of farmer income growth. Concurrently, budgetary allocations for traditional and organic farming were seen rising in successive budgets. This year, however, except for the Northeast region where an allocation is made for developing the organic value chain, the “Paramparagat Krishi Vikas Yojana” and the “National Project on Organic Farming” programmes do not find a mention. RKVY may probably take care of this. But given the prime focus on “chemical-free natural farming” in the budget speech, one would have expected a specific scheme with a substantial outlay.
Agri Infrastructure Fund (AIF): As part of the Atmanirbhar Bharat package, PM Modi introduced the “Rs 1 lakh crore Agriculture Infrastructure Fund (AIF)” for farm-gate infrastructure for farmers. In 2021-22, GoI budgeted about Rs. 900 crores for it, but only Rs. 200 crores have been used. In 2022-23, GoI budgets Rs. 500 crores, much lower than its target for the last year. Does it mean that the centre’s AIF has not picked up pace as expected? Infrastructure is one of the key pillars of this budget. Is there a rethink on the guidelines for AIF?
Government’s view
The Union Budget 2022–23 presented in parliament has numerous provisions for transforming the agriculture sector, from which farmers will benefit, said PM Modi.
According to the government, there are many provisions in this budget aimed at transforming the agriculture sector, including ensuring credit, recording MSP, boosting food processing and encouraging start-ups in the sector. “I am confident that the hardworking small farmers will prosper as a result of these steps,” the Prime Minister said.
The important aspect of the Union Budget was the welfare of the poor. It seeks to solve contemporary problems and create new opportunities for the common people.
“The budget aims to ensure a pukka house, toilet, tap water and gas connection for every poor household. At the same time, the focus is on modern Internet connectivity also, “the PM said.
Along with the cleaning of the Ganga, which is the centre of faith for millions of Indians, the government will encourage natural farming on the banks of the river in the five states of Uttarakhand, Uttar Pradesh, Bihar, Jharkhand and West Bengal, the prime minister said.
This is a significant step for the welfare of the farmers and will also help in making the Ganga chemical-free. The provisions in the Union Budget also aim to make agriculture lucrative and full of new opportunities.
Also, measures such as a special fund for encouraging new agriculture startups and packages for the food processing industry will help increase the income of farmers. MSP purchases have resulted in the transfer of over 2.25 lakh crore into the accounts of farmers.
Farmers’ view
The Union Budget 2022-23 has aroused negative response from farmers who said provisions for agriculture were unsatisfactory and even negligent on their key demands.
The Federation of Farmers’ Organisations said that the budget seems to be tailor-made for big-time private investors while there is no mention of some of their demands, including implementation of the recommendations of the Swaminathan Committee Report on Agriculture or statutory guarantee of Minimum Support Price (MSP) for agricultural produce.
The announcement of a statutory guarantee for MSP was one of the key demands made by the farmers before withdrawing the year-long agitation against the contentious farm laws.
Other demands, including the abolition of GST on ingredients supplementing agricultural activities like power tillers, insecticides, pesticides, fertilizer, and tractors, have also been ignored.
Some of these demands would have had a direct impact on farmers and reduced the cost of agricultural inputs, but the government has remained deafeningly silent. Instead, the duty on jewellery has been reduced, which underlines the government’s lack of empathy for farmers.
Some of the measures announced in the budget, like the linking of rivers and emphasis on millets, are futuristic in scope and offer no immediate benefit to farmers reeling under the impact of COVID-19. Hence, the budget is disappointing.
Also, the allocation of Rs. 2.37 lakh crore towards procurement of wheat and paddy under MSP was less than the Rs 2.42 lakh crore announced in 2021. Farmers think that the government has persisted with its policy of corporatizing the agricultural sector, and there has been no course correction despite the withdrawal of the 3 farm laws, consequent to a year-long agitation by farmers.
On the reference to interlinking of rivers, there is blueprint nor has there been public debate on the pros and cons of the project, and it is a mere announcement without much substance. The budget on the whole is reflective of the government’s ‘anti-people, anti-farmers and pro-capitalist’s policies.
Conclusion
Overall, it appears that Budget 2022–23 is indicating the changes in GoI’s focus. No more are there talks about doubling farmers’ income or organic farming in the way it was done until last year. Some crucial schemes have been stopped or subsumed, and many older ones have been renewed. We truly wish the budget lays the foundation for the “Amrit Kaal”, a word coined by the finance minister in her speech that refers to the 25-year-long lead up to the year 2047, when India will celebrate its 100 years of Independence. Do not let farmers and rural landless people feel excluded from the digitized, infrastructure-driven economic growth.
Speaking of providing employment opportunities, the Finance Minister said, “Apart from PLI expansion, food processing sectors, and start-ups, many small MSME units are the mediums through which employment opportunities are increased.” During the Budget speech, it was mentioned that the Production Linked Incentive (PLI) Scheme for achieving Atmanirbhar Bharat has received an excellent response, with the potential to create 60 lakh new jobs.