Budget 2018: Eyes on Arun Jaitley's announcements for rural sector
As Finance Minister Arun Jaitley gets down to deliver his fifth annual Budget for the 2018-19 financial year, all eyes will be on his announcements for the rural sector which is going through a downturn in the last few years. Two consecutive droughts along with a sharp fall in incomes have turned agriculture unprofitable resulting in massive agitations in several parts of the country.
According to some estimates, in the 2017 Kharif season alone, an estimated Rs 360 billion has been denied to farmers for not being able to sell their produce at the state-mandated Minimum Support Price (MSP). The fall in farm incomes not only threatens to dent the ruling BJP electorally but could also raise a big question mark on the government’s promise to double incomes by 2022.
In this perspective, Business Standard looks at budgetary allocation for agriculture and allied sectors in the past few years under the UPA and first years of the NDA along with agriculture growth during these years.
The Budget allocation for Ministry of Agriculture and allied activities, which includes the departments of agriculture research and animal husbandry, has grown by 114% since 2010-11, with a big jump coming from 2016-17 after the government started adding the expenditure incurred on interest subvention on short-term crop loans under the Ministry of Agriculture.
But, the higher budgetary allocation hasn’t translated big time into farm growth, projected to drop to its lowest level in recent times in 2017-18, according to the first Advanced Estimate. Though, allocations aren’t meant to boost growth and just give the direction of the govt’s spending.
more appropriate factor in farm growth seems to be the performance of the southwest monsoon, which has been erratic in 2014 and 2015. 2016 was the first full-year of a near-normal monsoon under NDA-2.
Note: Starting from 2016-17 Budget, the central government has been adding the component of interest subvention on short-term crop loans into agriculture ministry's Budget. Earlier, it was part of the Budget of the Ministry of Finance; LPA: Long-period average.
Budget 2018: Eyes on Arun Jaitley's announcements for rural sectorThe Budget allocation for Ministry of Agriculture and allied activities has grown by 114% since 2010-11