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Since it is an Interim Budget, Finance Minister Nirmala Sitharaman did not make any big announcements nor did she increase allocations for welfare schemes in an election year.
She continued the emphasis on capital expenditure by increasing it to Rs 11.1 trillion, an 11.1 per cent rise over last year. This would be 3.4 per cent of gross domestic product (GDP). This will help agriculture as well as rural infrastructure.
The two announcements, rooftop solarisation (10 million households) and the PM Awas Yojana Grameen (adding 20 million more houses), will be helpful to rural areas. Regarding welfare of Annadata, the PM-Kisan Samman Yojana, financial assistance was provided for 118 million farmers, including marginal and small farmers; crop insurance was given to 40 million farmers under Fasal Bima Yojana.
On agriculture and food processing, Sitharaman listed PM Kisan Sampada Yojana, promoting private and public investment in post-harvest activities, Nano DAP, Atmanirbhar Oil Seeds Abhiyan, dairy development, and matsya sampada. As many as 10 million women have become lakhpati didis already because of self-help groups. The target for this has been increased from 20 million to 30 million women.
The allocations for agriculture and rural development do not show much changes as this is an Interim Budget. The Revised Estimates (RE) for food subsidy are Rs 2.12 trillion in FY24 and declined to Rs 2.05 trillion in the FY25 Budget Estimates (BE).
Similarly, fertiliser subsidy decelerated from Rs 1.89 trillion (RE) to Rs 1.64 trillion (BE) during the same period. There is a marginal increase for agriculture and allied activities from Rs 1.41 trillion in FY24 (RE) to Rs 1.47 trillion in FY25 (BE). On agriculture R&D, the allocation is only Rs 9,941 crore in FY25. The expenditure for rural development increased marginally from Rs 2.38 trillion in FY24 (revised) to Rs 2.66 trillion in FY25. The allocation for MGNREGA for this year is Rs 86,000 crore – same as last year’s RE. There were expectations that the government would raise allocations of the PM-Kisan Samman Yojana. However, it has kept the same amount of Rs 60,000 crore for FY25.
According to the Reserve Bank of India report on currency and finance in 2022, the agriculture sector suffers from low capital formation, declining research and development (R&D), low crop yields, inadequate crop diversity, and intensity, with excessive dependence on subsidies and price support schemes.
Despite the importance of agriculture R&D, spending on R&D at around 0.4 per cent of GDP is far below the levels in China, Brazil, and Israel. There is a need for significant increase in public investment in agriculture R&D to at least 1 per cent agricultural GDP in India.
The writer is Distinguished Professor, ICFAI, Hyderabad, and Former Director, IGIDR, Mumbai
First Published: Feb 02 2024 | 12:50 AM IST
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