BackNo radical reformatory steps, long-term growth may suffer
No radical reformatory steps, long-term growth may suffer
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New Delhi: On a day when most reactions from chief executives of large firms suggested that the Budget was largely targeted at agriculture, people involved with the sector struck a contrary note.
“This is definitely an agriculture-focused Budget," said Govind Shrikhande, CEO, Shoppers’ Stop. “It is just an average Budget, which skims the real issues ailing agriculture. It is silent on raising production of wheat and rice, crops which are impacting food security and growth," said P.K Joshi, director of the National Centre for Agricultural Economics and Policy.
Agricultural reform was expected to be the theme of this Budget. Then, that holds true for all Budgets that have come before this one.
The 15 August 1947 edition of the Hindustan Times had a headline that said “Everything else can wait but not Agriculture." Alongside ran a strapline, “Wanted a dream Budget for Agriculture."
Sixty years later, given the acute crisis in the agriculture sector, that headline still holds true. According to analysts like Joshi, however, the Budget for 2007-2008 falls way below expectations. At Rs8,389 crore, the 15% hike in agriculture spending is the lowest during the tenure of the United Progressive Alliance government. In 2006-2007 there was a 27% increase, while in 2005-2006, the government introduced an 18% increase.
Resources apart, the Budget announced no radical, long-term measures to reform agriculture. It made no attempt to address supply-side issues which is triggering inflation, or to reduce the interest on farm credit from the prevailing rate of 7%. It mainly focuses on irrigation, water resources and pulses production, apart from a few schemes to expand agricultural extension services and spur agricultural research.
Joshi said areas such as fisheries and horticulture, and marketing reforms and private funding for forging linkages with farmers found no mention. “If you want to put agriculture on a higher growth trajectory, and raise it from 2% to 4%, this Budget cannot do it. It leaves the farmer looking at the sky for deliverance," said economist Ashok Gulati.
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