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Farming outlay underused, may be raised marginally this budget

Farming outlay underused, may be raised marginally this budget
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First Published: Tue, Jun 30 2009. 11 09 PM IST

 Agrarian economy: Agriculture and irrigation are unlikely to get any major funding increases despite concerns about a deficient monsoon. Indranil Bhoumik / Mint
Agrarian economy: Agriculture and irrigation are unlikely to get any major funding increases despite concerns about a deficient monsoon. Indranil Bhoumik / Mint
Updated: Tue, Jun 30 2009. 11 09 PM IST
New Delhi: Despite concerns that a deficient monsoon would hurt farm production, agriculture and irrigation aren’t likely to receive any major funding increases in the budget for 2009-10, according to two senior officials of the Planning Commission, the apex planning body.
Agrarian economy: Agriculture and irrigation are unlikely to get any major funding increases despite concerns about a deficient monsoon. Indranil Bhoumik / Mint
That’s because of the poor utilization by state governments of funds allocated in the previous year, said the two officials, who didn’t want to be identified.
Over the past two years, the government has initiated programmes such as Food Security Mission and Rashtriya Krishi Vikas Yojana (national agriculture development scheme) to boost farming. For irrigation, it announced 14 national projects in budget 2008-09 at an estimated cost of Rs55,000 crore.
For this year, the Planning Commission has recommended Rs7,200 crore for the department of agriculture and cooperation—a mere 4.8%, or Rs332 crore, increase over the allocation in budget 2008-09.
“No big allocation has been made because the states do not have the absorption capacity and money remains unutilized,” said one of the two Planning Commission officials. “There is (a) shortage of funds with the Central government and it cannot go on increasing allocation without seeing actual results.”
This is despite the Union government’s focus on food security, agriculture productivity and irrigation in a year when the India Meteorological Department has forecast that annual monsoon rains, which water much of the country’s crops, would be below normal.
For agriculture research and education, the Planning Commission has recommended maintaining the level of allocations made in Budget 2008-09 and the interim budget in February.
For animal husbandry, the commission has proposed a 6.4% increase in allocation.
As for irrigation, the second official said the Planning Commission has recommended Rs9,500 crore under the Accelerated Irrigation Benefit Programme, or AIPB, a 20% rise over the allocation in the previous budget.
AIBP is an important component of Bharat Nirman, the United Progressive Alliance government’s ambitious rural infrastructure programme, which has missed a time-bound target by 50% and needs lumpy investments. In this programme, the Union government contributes up to 25% of the expenditure for most projects. For some special category projects in hills and drought prone areas, its contribution can go up to 90%.
“States were asking for over 35% increase and also that (the) Centre contribute 50% of the total expenditure (of each project), but the task force on irrigation within the Planning Commission rejected their proposal because the performance of state governments is poor,” said the second Planning Commission official.
Experts say the Union government’s objective should be to meet the 4% growth target for agricultural production in the 11th Plan (2007-12).
“In the last two years, the plan allocation to agriculture has been good and as long as the 11th Plan targets are met, it is all right if an (increase in) allocation of 4-5% is provided,” said Ramesh Chand, a professor at the National Centre for Agricultural Economics and Policy. “The same is true for irrigation; the objective should be to meet the targets.”
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First Published: Tue, Jun 30 2009. 11 09 PM IST