From solarising pumping sets, encouraging usage of traditional and organic fertilisers to special rail and flights service for the transportation of farm produce for doubling the farmers’ income by 2022 and reviving the farm sector, the Union Budget 2020-21 proposed 11 per cent increase in the farm credit target to 15 lakh crore for 2020-21.
A fund of Rs 1.60 lakh crore has been allocated for the Agriculture sector in the new budget. It has also proposed to promote ‘one product one district’ for better marketing and export of horticulture crops. It also called on states for early implementation of three key central model laws on land leasing, agriculture produce and livestock marketing and contract farming.
Announcing a 16-point programme for agriculture and rural development sector in the Union Budget presented in the Parliament, Finance Minister Nirmala Sitharaman on Saturday more than Rs 2.83 lakh crore would be spent on Agriculture, Rural Development, Irrigation and allied activities as farmers and rural poor continue to remain the key focus of the Government.
To provide better access to bank credit, the Union Budget proposed raising the target for disbursing agriculture credit to Rs 15 lakh crore for the 2020-21 fiscal from the current target of Rs 13.5 lakh crore. Normally, farm loans attract an interest rate of 9 per cent. But the Government is providing 2 per cent interest subsidy to ensure farmers get short-term farm loan of up to Rs 3 lakh at an effective rate of 7 per cent per annum. Since Non-Banking Finance Companies (NBFCs)and cooperatives are active in the agriculture credit space, Sitharaman said the NABARD re-finance scheme will be further expanded.
To improve marketing, Sitharaman announced that the Indian Railways will set up a “Kisan Rail” — through public private partership (PPP) arrangements — to build a seamless national cold supply chain for perishables, inclusive of milk, meat and fish. There would be refrigerated coaches in Express and Freight trains as well. ‘Krishi Udaan’ will be launched by the Civil Aviation Ministry on international and national routes. This will immensely help improve value realisation especially in North-East and tribal districts, she added. As water stress related issues are now a serious concern across the country, Sitharaman said, “Our government is proposing comprehensive measures for 100 water stressed districts.”
In the previous fiscal year, the government had allocated Rs 1.3 lakh crore for agriculture and Rs 1.20 crore for rural development. The current budget allocates Rs 1.60 lakh crore agriculture and allied activities, and Rs 1.23 lakh crore for irrigation and rural development. The 2020 budget has increased allocation to the farming sector by Rs 35,000 crore.
According to the budget document, the government has proposed a lower allocation of Rs 54,370.15 crore for PM-Kisan scheme this fiscal, as against the budget projection of Rs 75,000 crore because of implementation hurdles in some states. Despite lower outgo on the PM-Kisan scheme — under which Rs 6,000 is being provided to eligible farmers per year in three equal instalments, the government has kept the budget estimate for the next fiscal at the same level of Rs 75,000 crore.
To libersalise agri-market, she urged the State Governments to undertake implementation of three central model laws — Model Agricultural Land Leasing Act, 2016, Model Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017; and Model Agricultural Produce and Livestock Contract Farming and Services (Promotion and Facilitation) Act, 2018.
The Budget also proposed to expand PM-KUSUM to provide 20 lakh farmers for setting up stand-alone solar pumps and for another 15 lakh farmers to solarise their grid-connected pump sets, setting up of efficient warehouses at the block/taluk level. “Solar power generation on barren lands and would be operationalised. Farmers who have barren land can send the power to the grid. They will be able to make a living out of it,” Sitharaman said.
The government also proposed including all kinds of fertilisers, including traditional and organic types, as the prevailing regime encourages excessive use of chemical fertiliser.
“All beneficiaries of the PM Kisan Yojana will be covered under the Kisan Credit Card scheme. The focus will be on developing fodder farms and doubling of milk production from 55.8 million metric tonnes to 108 million metric tonnes by 2025,” Sitharaman said.
The Budget also proposes cultivation of cluster products, where each district would focus on one cultivating in order to boost the horticulture sector. The budget also encourages zero budget natural farming and online national organic products market.
The budget proposed boosting the ‘blue economy’ for the development and management of marine fisheries. The Budget proposed setting up of youth-run ‘sagar mitra’ centres and 500 fish farmer producer organisations to encourage the cultivation of algae and seaweed.