The farming community is hopeful that in its last full Budget on Thursday, the Modi Government will seek to alleviate distress of the agriculture sector which is not only a food provider but also the backbone of the economy
The Modi Government will be presenting its last comprehensive Budget on Thursday. With the lok Sabha election round the corner early next year, a common belief is that the Government is likely to come out with a populist Budget, something that provides relief to the agriculture sector.
Budget 2018 will also be the first one to be presented after the implementation of the Goods and Services Tax (GST). Therefore, on the GST front, it will be interesting to see how the Finance Minister details the tax structure. Expectations are also high that the Government might as well resolve several issues facing taxation. Most industries have particularly expressed lack of clarity on critical tax issues, such as inter-branch supply of services within the same legal entity, anti-profiteering compliance mechanism, scope of input service distributor, among others.
Expectations are high that the Government will endorse a sustainable growth environment for the Indian industry, thereby providing the much-needed tax certainty and resolution to teething and emerging issues being faced on account of GST implementation.
One expects that the Government will take necessary steps and resolve all issues and bring relief to the concerned sector. Keeping in mind the above mentioned issues, certain expectations for the agriculture sector are as under:
(i) Agriculture production and farm incomes in India are frequently affected by natural disasters, such as droughts, floods, cyclones, storms, landslides and earthquakes. Susceptibility of the Indian agriculture to these disasters is compounded by the outbreak of epidemics and man-made disasters, such as fire, sale of spurious seeds, fertilisers, pesticides and price crashes. The need of the hour is to find out the impact of insurance adoption regarding the advantages and disadvantages of ‘Pradhan Mantri Fasal Bima Yojana’ (PMFBY), when compared to the previous year.
(ii) It is important to examine whether evident implications for the choice of crops, productivities, variety of yields, variety of seeds and availability of High Yielding Variety and genetically-modified seeds, e-NAM etc benefits small and marginal farmers for farm credit.
(iii) In the current fiscal, the Government kept a credit target of `10 lakh crore, of which, the Indian farmer has already been disbursed `6.25 lakh crore in the first six months till September 2017. There is a need to increase farm credit target to `11 lakh crore or more to help improve credit flow in the agriculture sector because farm credit is one of the major issues for small and marginal farmers. It should be increased at least till `15 lakh crore annually.
(iv) The Government should create various awareness programmes to create knowledge about the impact of PMFBY (in previous Budget, it was decided that PMFBY’s coverage would increase by 50 per cent by 2018-19). Besides this, the Government should make it easy for the farmers to procedure PMBY.
(v) Minimum Support Price (MSP) is a major problem for Indian farmers as they face poor conditions due to crop failure or bumper harvest. There has been a sharp fall in the market price of crops like pulses, onions, potato, oilseeds, cotton and maize. Yet, farmers have been suffering huge loss.
(vi) According to Union Finance Minister Arun Jaitley, India’s economic growth is not “justifiable and equitable” unless the benefits are “clear and evident” in the farm sector. As found in a study, the Government has started procuring these crops at MSP, but procurement centres have not been set up in specific areas.
The Government must set up new procurement centers for the effective implementation of MSP. It can also link the suffered areas with e-NAM.
(vii) The Government must following the ‘Amul distribution model’ in the dairy industry for fruits and vegetables industry. This step will hugely impact the farmers’ income. It will also create a viable supply chain for fruits and vegetables in the market.
(viii) As we are aware, farmers have been suffering from natural hazardous like floods and droughts every year. The Government must designate droughts areas under ‘More crop per drop’ technology. This technology is used by Israeli agricultural scientists. We must take cue from them. It is saddening that drought-like conditions keep recurring every year.
(ix) The Government must also focus more on organic farming.
One expects Budget 2018 will have special backhander for the agriculture sector as this sector is not only the largest food provider, but also forms the backbone of the Indian economy.
(The writer is Associate Professor, (Economics), Faculty of Management, Marwadi University, Rajkot)