Overview of Budget- 2018-19

The union budget 2018-19 was presented on February 01, 2018. Government called the budget farmer friendly, common man friendly, but there are always criticisms from oppositions and experts. The budget encompasses higher minimum support prices and increased farm credit targets. This is an assessment of the impact of the budget on farmers which is crucial to our work.

Agriculture and Farmers Welfare:  Overall 2.3 % of the overall budget

The Highlights are : – 

  • To raise minimum support price for kharif season crops to 1.5 times of agri production cost—that is cost plus 50 percent
  • Institutional credit for agri-sector increased to 11 lakh crore for FY19 from 10 lakhs crore last year
  • A Rs. 10,000 crore fund has been set up for fisheries and animal husbandries
  • Strengthening the e-National Agricultural Market network
  • In all, 470 APMCs have been connected to e-NAM, which connects farmers with mandis for price discovery
  • Around 22,000 rural haats, GrAMs ( Gramin Agricultural Markets) would be developed as agro hubs with NITI Aayog to allow farmers to get better price realisation. Rs 2,000 crore fund has been set up for the same
  • Operation Green’ will be launched for agriculture and allocated Rs. 500 crore for it. This is to address the price volatility of the perishable commodities like Potato, Onion and Tomato
  • To increase agriculture exports to $100 billion, linkages with 42 food parks will be created.
  • The government will also facilitate a futures and options market for agriculture, along with improved warehousing facilities, agri-logistics and processing facilities
  • It will encourage organic farms that are 10,000 hectares in size
  • The crop insurance scheme has been allotted Rs 13,000 crore compared to Rs 10,698 crore in the revised estimates of 2017-18
  • Allocation for Ministry of Food Processing doubled to Rs.1400 crore
  • Loans to Self Help Groups (SHG) of women to increase to Rs.75,000 crore by March 2019
  • Increased allocation of National Rural Livelihood Mission to Rs 5750 crore
  • Cluster-based approach for horticulture farming 

Amount in expenditures in agriculture and rural development, functional classification, revenue, 2017-18 to 2018-19, in rupees crore and per cent

Major Schemes

2017-2018

Revised Estimates

2018-2019

Budgeted Estimates

Green Revolution

11,185

13,909

White Revolution ( dairy)

1,633

2,220

Blue Revolution ( fishery)

302

643

Rastriya Krishi Vikas Yojana (RKVY)

4500

3600

Pradhan mantra Krishi Sinchi Yojan(PMKSY)

7,392

9,429

Pradhan Fasal Vima Yojana ( PFVY)

Crop Insurance scheme

10,698

13,000

Interest subsidy to farmers on short –term credits

14,750

15,000

Integrated scheme for Agriculture marketing

1190

1104

Marketing intervention and price support schemes

950

200

Paramagat Krishi Vikas Yojana

270

360

Cotton price support scheme

303

924

MGNREGS

55,000

55,000

This is about 2.3 %  of  the total budget and overall, there is 13% increase in the budgetary outlays from the last year. Animal Husbandry gets only 5.4% of the overall Agri ministry budget. In fact, the outlays for the Market Intervention and Price Support scheme fell from 950 crores of revised estimates last year, to 200 crores.

PKVY ( Pradhan Mantri Krishi Vikas Yojana) would be receiving 10 crore rupees more than last year. On Pradhan Mantri Krishi Sinchai Yojana, there is a meagre increase of 600 crores. Fisheries budget increased from 400 crores to 633 crore rupees.

There was no announcement to provide any relief to the indebted farmers. Even if MSPs rise in agriculture, there is no evidence that the benefits of higher MSPs reach the farmer. Only 6-7 % farmers are selling under MSP.  The rise in MSP will be on the cost of cultivation but what about the asset (own land) and labour cost (own labour) and as most of the farmers’ association and committees are demanding, Kisan Credit Cards being expanded to animal husbandry and fisheries is welcome. Earmarking Rs 10,000 crore for livestock, fisheries and aquaculture sector is encouraging. But this has to be for some period ‘4-5 years as livestock rearing and fishery based livelihood need some time go establish.

There is increase in operation green and marketing network. But market yards means procuring land, building infrastructure, assets (vehicle and computers) giving salaries to workers as happened in case of Bundelkhand drought package. There is already an Agricultural Prices Commission in place, also FCI, NAFED and other state bodies. Now what Niti Aayog would do additionally? Rs.2000 crores for 22000 markets wards, what would be unit per cost.

Agricultural credit is not a budgetary allocation and is provided by banks. How the co-operative credit network will be involved in this what will be role of NABARD. What about the agricultural credit reaches the genuine farmers and tenant farmers.

Favourable tax scheme for FPOs is welcome announcement. 

Analysis and Written By : Mr. K. C  Sahu, Head Livelihood