Deciphering the Union Budget 2017 and its Implications on Agricultural Sector

Budget-2017-Impact-on-Agriculture-Sector

Highlights of the Budget for Agriculture

Farmer income to double in five years
Rs 10 lakh crore allocated for agricultural credit; J&K along with states in east and north-east to get special attention
Cropped area coverage under Fasal Bima Yojana increased to 40% and 50% in FY 18-19
Rs 1,900 crore allocated to computerisation and integration of 63,000 Public Agriculture Societies (PACS) for loan distribution
National Agricultural Market (e-NAM) to double - from the existing 250 to 585 APMCs; Rs 75 lakh allocated to each e-NAM
Rs 2,000 crore allocated as corpus for new fund – Dairy and Infrastructure Development Fund to be established under NABARD; allocation to increase to Rs 8,000 crore in three years
1,000 Mini Labs to be established in Krishi Vigyan Kendras (KVK)
Five lakh farm ponds to improve water availability for irrigation.

Implications of the budget announcement on the agriculture sector The Union Budget 2017-18 is perhaps the most significant budget for the Narendra Modi-led NDA government and will define the path forward on how the economy will perform. Coming in the backdrop of demonetisation, slowdown in global economy, forthcoming elections in UP, Uttarakhand, Goa, Punjab and Manipur, and the fact that general election is due in early 2019, the implications of this budget on the economy and political outcomes, is being closely analysed by all. This budget is special for other reasons as well, most important of all being the focus on agriculture and rural development. This budget has given both the interrelated sectors a major boost with significant increase in allocation, which is bound to show significant results going forward. With agriculture growth expected at 4.1%, this budget presents the best opportunity for transforming the rural economy. Let’s look at the major announcements. Rs 10 lakh crore allocated for agricultural credit The agricultural sector has been suffering on account of several factors – poor monsoons, lack of farm insurance, rising input costs, low remuneration to farmers, lack of storage facilities and low investment in irrigation facilities. The agricultural credit target for FY 16-17 is Rs 9 lakh crore. The allocation for FY 17-18 is targeted at Rs 10 lakh crore. That’s an increase of Rs 1 lakh crore or over 10%! This is expected to be a game changer for farmers who have been looking towards getting relief from the government to bail them out of the financial cesspool that many of them find themselves in. Short-term loans of upto Rs 3 lakh are already available to farmers at 7% interest. In December 2016, the government had announced a 60-day interest waiver to them. If the farmers avail of the 3% additional interest waiver by returning loans within the stipulated time, their actual interest comes down to only 4%. So the increase in total allocation of Rs 1 lakh crore for credit to farmers is a major boost. Cropped area coverage under Fasal Bima Yojana increased to 40% and 50% in FY 18-19 The Pradhan Mantri Fasal Bima Yojana was launched in 2016 with 30% of the cropped area brought under this scheme. In FY 17-18, this area has been increased to 40% and by FY 18-19, the area will further increase to 50%. In 2016, the budget allocation was Rs 5,500 crore and was increased to Rs 13,240 crore to settle arrears. In FY 17-18, Rs 9,000 crore has been allocated. This will hugely benefit farmers who are vulnerable to erratic monsoons. Rs 1,900 crore allocated to computerisation and integration of 63,000 Public Agriculture Societies (PACS) for loan distribution Various co-operative societies under NABARD have been in the forefront of releasing loans to farmers in rural areas. With Rs 1,900 crore allocated to computerizing all 63,000 PACS, the increase in total loan distribution will be efficiently distributed and better monitored. National Agricultural Market (e-NAM) to double - from the existing 250 to 585 APMCs; Rs 75 lakh allocated to each e-NAM Farmers lose a lot of their produce in the post-harvest phase due to poor cleaning, packaging and storage facilities. The government plans to improve farmer’s returns by investing in modern cleaning, packaging and storing of agricultural produce at each APMC. Towards this, Rs 75 lakh has been allocated to each e-NAM. Rs 2,000 crore allocated as corpus for new fund – Dairy and Infrastructure Development Fund to be established under NABARD; allocation to increase to Rs 8000 crore in 3 years Milk and cattle rearing is an additional income for the farmer and therefore, this move at establishing a fund dedicated to dairy development is going to transform the farmer’s livelihood as also increase the percentage contribution of milk and processed milk items to the overall agricultural output of the nation. 1000 Mini Labs to be established in Krishi Vigyan Kendras (KVK) Lab-to-land knowledge and technology will now be better facilitated at the local level with more of these mini-labs being set up at KVKs. Farmers will have better access to relevant seeds, soil analysis and suitable plant varieties, all of which will optimise output in their respective areas. 5 lakh farm ponds to improve water availability for irrigation From the existing 5 lakh farm ponds, the government plans to implement an additional 10 lakh farm ponds this year and add another 5 lakh ponds in FY 17-18. This will contribute to increasing farm output and is in line with the government’s overall target to doubling farmer income in three years. Overall view The Finance Minister has given the agriculture sector the attention and investment boost that it deserved and the impact will be seen in coming times. Read More..... Top Takeaways From Union Budget 2017-18 Focus on Poor, Small Businesses: PM Modi

Deciphering the Union Budget 2017 and its Implications on Agricultural Sector

Trending Pages

Related Articles