Jaitley’s new measures will alleviate stress in rural sector and boost agriculture.
Finance Minister Arun Jaitley presented his fifth and final full budget today (1 February) before the country goes into general elections in 2019. A strong emphasis on alleviating stress in rural sector was expected, given that important states like Karnataka, Rajasthan, Madhya Pradesh and Chhattisgarh will be conducting elections to their assemblies this year.
Understandably, Jaitley kick started his budget speech with a set of announcements for agriculture. He acknowledged the contribution of farmers in India's record production by noting that in 2016-17 food grain output in the country stood at around 275 million tonnes and around 300 million tonnes for fruits and vegetables.
He underscored the government's commitment to give at least 50 per cent more for farmer's produce over the actual cost. Towards this goal, he reminded the Lok Sabha that the government has already declared minimum support price (MSP) for majority of rabi crops, at least at one-and-a-half times the cost involved. This 1.5 times the cost of produce MSP formula, he announced, will be extended to the rest of crops. “Government has decided to keep MSP for the all unannounced crops of kharif at least at one-and-half times of their production cost,' he declared.
Recognising that only increasing MSP is not adequate and it was important that farmers get full benefit of the new MSP, if price of the agriculture produce in the market is less than MSP. To achieve this, NITI Ayog, in consultation with central and state governments, will put in place a fool-proof mechanism. Here Madhya Pradesh's experiment may come in handy. The Shivraj Singh Chauhan government had announced last year that in case farmers get less than MSP price for their crops, the government will pitch in to bridge the gap by directly giving the difference to farmers.
Regarding connecting government-run farm mandis to e-NAM, Jaitley said that so far 470 agricultural produce market committees (APMCs) have been connected to e-NAM network and rest will be connected by March 2018.
To give impetus to food processing sector, he announced doubling of allocation to it from Rs 700 crore to Rs 1,400 crore.
In a major move, Jaitley also announced that the government will liberalise agri-commodities. Another big decision included extending the facility of Kisan Credit Cards to fisheries and animal husbandry farmers. This will help farmers diversify towards these more rewarding fields. Institutional credit to agriculture sector will go up by Rs 1 lakh crore in the next fiscal.