Maharashtra budget focuses on farmers but skips farm loan waiver
Maharashtra finance minister Sudhir Mungantiwar’s budget lays emphasis on investment in the farm sector so that ‘farmers come out of the debt trap’
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Mumbai: The Bharatiya Janata Party (BJP)-led Maharashtra government on Saturday presented budget for 2017-18 with a focus on the farm sector though it did not concede to the demand for farm debt-waiver. Maharashtra finance minister Sudhir Mungantiwar presented the budget in the legislative assembly even as legislators from the opposition Congress and Nationalist Congress Party (NCP) raised slogans demanding loan waiver all through the budget speech.
The budget lays emphasis on investment in the farm sector so that ‘farmers come out of the debt trap’. Estimating revenue receipts of nearly Rs2.43 trillion, the budget pegs expenditure at around Rs2.48 trillion, thus projecting a revenue deficit of Rs4,511 crore. Mungantiwar said efforts would be made to minimise this deficit by reducing “avoidable expenditure and by effective revenue recoveries”.
Radhakrishna Vikhe-Patil, senior Congress leader and leader of the opposition in the assembly, termed the budget as a “complete hogwash”. “If this government was sensitive to the farmers’ plight, it would have made the announcement of farm debt waiver in the budget itself. Around 400 farmers have committed suicide in the first two months of 2017 and yet the government is completely immune to the farmers’ lot. The budget has totally wasted the opportunity to help farmers in any meaningful way,” Vikhe-Patil said later at a press conference.
The budget allocates Rs8,233 crore in 2017-18 to the water resources department, Rs7,000 crore for roads, Rs7,230 crore for scheduled caste welfare, and Rs6,754 crore for the scheduled tribes welfare.
Conscious that the demand for farm debt-waiver had received traction among all political parties, including the BJP after the party in Uttar Pradesh promised loan waiver for small and marginal farmers, Mungantiwar devoted the better part of his budget speech to the farm sector measures. He said the government was committed to making farmers debt-free.
“At present, 31.57 lakh farmers out of total 1.36 crore farmers are indebted and due to this they face the risk of going out of the ambit of institutional credit. If the farmer is to get crop loan in future, then it is necessary to repay his debts,” he said.
He added that the estimated institutional crop loan indebtedness in Maharashtra was Rs30,500 crore. “If the huge collective indebtedness is to be written off it will have an impact on investment in the agriculture sector. Further, there is no assurance that the farmer will be perennially out of the debt trap,” he said.
Mungantiwar added that the state government had requested the centre to formulate a scheme that aims at bringing back these 3.1 million farmers into the institutional credit system. “We have insisted that such a scheme should bring the indebted farmers back in the formal credit system but it should not encourage the remaining farmers who are regularly repaying their loans to default on their credit repayment. If such a scheme is announced, it will only be for those farmers who are indebted and not those who are repaying their loans,” he clarified.
The budget aspires to double farmers’ income by 2021 by identifying 8 areas for investment and long-term measures—irrigation, electricity, farm roads, food processing, agriculture technology, marketing, group farming, and agriculture credit.
The budget earmarks Rs1,200 crore for the BJP government’s flagship programme of Jalyukta Shivar (water conservation for agriculture) in 2017-18. So far, the government has spent Rs1,600 crore on this campaign which aims at making 25,000 villages drought-free by 2019. In 2015-16, as per the economic survey, 4374 villages were made drought-free but Mungantiwar’s two-hour long budget speech did not provide figures for 2016-17.
Maharashtra’s budget does not propose any new taxes in view of the rollout of goods and services tax (GST) on 1 July but reduces value-added tax (VAT) on a few commodities including aviation turbine fuel.
Mungantiwar said the government proposed to reduce VAT on aviation turbine fuel from 5% to 1% for the fuel sold to aircrafts operating under the Regional Connectivity Scheme that covers ten small airports in the state. The tax reduction has been proposed to encourage aviation industry and tourism, he added. These ten airports are at Amravati, Gondia, Nashik, Jalgaon, Nanded, Solapur, Kolhapur, Ratnagiri, Shirdi, and Sindhudurg.
To encourage cashless transactions post demonetisation, the budget proposes exempting card swipe machines from the current VAT slab of 13.5%. Similarly, it proposes waiving VAT (13.5%) on gas and electric incinerators to support environment by minimising the use of trees. To help farmers, the budget has proposed to exempt soil testing kits from VAT in order to support the soil health card scheme of the Union government. In Maharashtra, nearly 8 million farmers have been issued soil health cards.
Also, the budget exempts geomembrane, used in geotechnical engineering, from the existing VAT of 6% to help the farmers implement the state government’s farm pond digging scheme under the flagship water conservation programme of Jalyukta Shivar. The budget proposes exempting milt testing kits from VAT to crack down on milk adulteration.
The budget increases VAR on foreign liquor, Indian-made foreign liquor, and country liquor from the existing 23.08% to 25.93%. Tax on online and paper lotteries has been proposed to be raised from Rs70,000 per week to Rs1 lakh.