Budget hikes for rural India inadequate

Still about 95% of the rural economy is informal both in agriculture and non-agriculture. Even though agriculture contributes only 13% of India’s GDP, it is a source of livelihoods for about 50% of the population. Agricultural sector growth was robust at 4.1% in 2016-17, but it was at the back of only 1.2% growth in 2015-16 and negative growth (-0.2%) in 2014-15.

Figures indicate that the rural non-farm sector growth was adversely affected by demonetisation. Hence, farmers’ organisations and villagers had big hopes on the budget 2017-18 to revive rural economy and aim towards doubling their incomes, but it followed a minimalist approach with no big-bang initiatives.

Fund increase marginal
The total allocation for the rural, agriculture and allied sectors in 2017-18 is Rs 1.87 lakh crore, which was only 11.6% higher than the 2016-17(Revised estimates). Out of this, allocation to agriculture was Rs 58,663 crore which was 11.1% higher and for rural development was Rs 1,28,560 crore which was again 11.8% higher than the 2016-17 (RE). This marginal increase of about 11% in both the sectors indicates little emphasis on rural sector, despite lofty goals.

Rural credit
The Budget has, however, given big thrust to credit availability to the farm sector with a target of Rs 10 lakh crore. It can only work if we are able to reduce costs and increase profitability in farming sector through innovative schemes like balanced use of fertilisers by promoting soil health cards, ensuring remunerative prices. Otherwise, farmers end up with indebtedness without welfare gain.

Rural housing got priority
Budget allocation to Pradhan Mantri Awaas Yojana-Grameen was 23,000 crore, 53% higher than last year. Allocation to MGNREGA was Rs 48,000 crore, marginally higher compared to 2015-16 (RE) but focus on creating productivity enhancing assets like farm ponds and compost pits is a welcome step. There was no change in funds allocated to Prime Minister Gram Sadak Yojana (PMGSY) at Rs 19,000 crore.

Agricultural development schemes
Fund allocation to green revolution heading ( National Food Security Mission with Rs 1,720 crore and Rastriya Krishi Vikas Yojana with Rs 4,750 crore and others) was increased by 32.6% to 13,741 crore. However, provision for PMFBY was decreased from Rs 13,240 crore in 2016-17(RE) to Rs 9,000 crore. Projection of increase in coverage from 30% to 40% of the cropped area needs explanation.

Strengthening of soil health card scheme by involving 648 KVKs is a good step. Strengthening e-NAM by providing Rs 75 lakh each mandi is also a good step. However, the assaying systems should have been given priority for e-NAM to be fully-functional, but there is no provision in this regard. Allocation to agricultural research and development was increased marginally, which is too little to meet increasing cost of high-tech research.

Little emphasis on poor
Rural electrification and poverty elimination reduce disparities among regions and people, but increase in allocation is marginal. Allocation of only Rs 4,814 crore is not sufficient to make villages 100% electrified under Gram Jyoti Yojana. Rs 4,500 crore allocation to Deendayal Antyodaya Yojana to bring one crore households out of poverty and to make 50,000 gram panchayats poverty free by 2019, the 150th birth anniversary of Gandhiji is a welcome step, but needs more focused efforts by bringing private funds and expertise if required. Increase in allocations to National Livelihood Mission Ajeevika, white revolution (dairy sector) and blue revolution (fisheries) is marginal.

Policy Reforms
Budget also talked about market reforms like introduction of new model law on contract farming to open up agricultural markets and create competitive market structures. However there was no mention of implementation of Model Agricultural Land Leasing Act, 2016.

Overall, it appears that increasing farmers’ incomes as well as area under irrigation got priority but not enough funds. Private sector help may be taken under CSR to reach the benefits to small and marginal farmers and other vulnerable sections of rural India. (Writer is Director, National Institute of Agricultural Extension Management, Hyderabad)

Budget allocation for flagship programmes of agriculture and rural development (Rs. cr)

Component	2016-17(RE)	2017-18(BE)	% change over 2016-17(RE)
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)	47499	48000	1.1
Pradhan Mantri Awas Yojna (PMAY)-grameen	15,000	23,000	53.3
Pradhan Mantri Gram Sadak Yojna (PMGSY)	19000	19000	0.0
Green Revolution (including NFSM, RKVY)	10360	13741	32.6
Pradhan Mantri Fasal Bima Yojana (PMFBY)	13240	9000	-32.0
Pradhan Mantri Krishi Sinchai Yojana (PMKSY)	5189	7377	42.2
National rural Drinking Water Mission	6000	6050	0.8
National Livelihood Mission -Ajeevika	3334	4849	45.4
Price Stablisation Fund for pulses	3400	3500	2.9

By A Amarender Reddy