New Delhi: Finance minister Arun Jaitley on Thursday outlined a slew of measures to boost agricultural production and the rural economy, announcing new projects as well as enhanced support for existing schemes to the tune of Rs14.34 trillion in the Union Budget 2018.
Agriculture and the rural economy was the first subject Jaitley focussed on in his speech as he presented his last full budget ahead of the general elections scheduled for 2019, although there is some speculation that the polls could be advanced to December 2018.
“The focus of the government next year will be to provide maximum livelihood opportunities in rural areas by spending more on livelihood, agricultural and allied activities and construction of rural infrastructure," Jaitley said.
“In the year 2018-19, for the creation of livelihood and infrastructure in rural areas, the total amount to be spent by ministries will be Rs14.34 lakh crore from extra budgetary and non budgetary resources," he said.
Referring to 86% farmers in India who Jaitley described as small and marginal, he said efforts will be made to link them to markets to get adequate remuneration for their produce.
One of the first steps Jaitley announced was setting the minimum support price at 1.5 times the cost of production of the kharif (summer) crops.
The Niti Aayog, after discussions with state governments, will put in place a mechanism to ensure farmers get adequate remuneration should crop prices fall, he said.
Jaitley also announced an increase in agricultural credit to Rs11 trillion.
Among the other measures announced by the finance minister were development and upgradation of 22,000 rural haats or markets for which he set aside Rs2,000 crore. He further announced a provision of Rs500 crore for “Operation Green" to promote agriculture logistics.
The government will also make efforts to link villages and rural roads to agriculture markets, secondary schools and hospitals under the Pradhan Mantri Gram Sadak Yojna (PMGSY), Jaitley said.
The corpus of funds available to women in self-help groups was Rs42,000 crore in 2016-17, Jaitley said, adding that this would be increased to Rs75,000 crore by March 2019.
The government also announced an increase in funds allocated for the National Rural Livelihood Mission under the rural development ministry to ₹ ,750 crore in 2018-19, from ₹ 4,500 crore in 2017-18.
The finance minister announced an allocation of Rs2,600 crore to ensure irrigation facilities in 96 irrigation deprived districts, besides funds to boost fisheries and animal farming. The raft of measures announced by Jaitley come after farmers in several states protested a crash in crop prices last year.
Ahead of the budget presentation in Parliament, minister of state for civil aviation Jayant Sinha told CNBC news channel that this budget would be a political document rather than a market-focused one.
Assembly elections are due in eight states later this year—Madhya Pradesh, Chhattisgarh, Rajasthan, Karnataka, Nagaland, Tripura, Meghalaya and Mizoram. Four other states are going to polls in the first half of 2019.
Comments from both ministers come as India’s economy is making steady recovery from the disruptions caused by structural reforms such as demonetisation and rollout of the goods and services tax (GST) that led to a slowdown in growth in the first quarter of 2017-18.
The Economic Survey tabled in Parliament by Jaitley on Monday estimated that the worst is over for the economy and that it is poised to rebound and grow in the range of 7-7.5% in 2018-19.