Interim Budget 2024: FM Nirmala Sitharaman may significantly enhance allocation for farm sector schemes

Interim Budget 2024: The government is likely to significantly enhance allocation for key farm sector schemes and push credit in the interim Budget to boost rural economy as growth in the agriculture sector is projected to decelerate to 1.8% in 2023-24 from 4% a year ago

PTI
First Published24 Jan 2024
Interim Budget 2024: Finance Minister Nirmala Sitharaman is scheduled to present the interim Budget on February 1
Interim Budget 2024: Finance Minister Nirmala Sitharaman is scheduled to present the interim Budget on February 1(PTI/Manvender Vashist Lav)

The government is likely to significantly enhance allocation for key farm sector schemes and push credit in the interim Budget to boost rural economy as growth in the agriculture sector is projected to decelerate to 1.8% in 2023-24 from 4% a year ago.

Finance Minister Nirmala Sitharaman is scheduled to present the interim Budget on February 1, which will be the last major economic document of the Narendra Modi-led government ahead of the 2024 Lok Sabha elections.

Also Read | Budget 2024: Interim Budget vs Vote on Account. How the two are different?

In the 2019 interim Budget ahead of the 2019 general elections, the government announced PM-Kisan Samman Nidhi, under which up to 6,000 financial assistance is provided to small farmers annually. In the election year, there are expectations that the quantum of assistance may increase in the upcoming Budget.

Also, the government is likely to announce a substantial increase in the agricultural credit target to 22-25 lakh crore for the next fiscal and ensure every eligible farmer has access to institutional credit. The government's agri-credit target is 20 lakh crore for the ongoing fiscal.

Also Read | Budget 2024: How the Union Budget is prepared? A quick guide

In the current fiscal, about 82% of the agri-credit target of 20 lakh crore has been achieved till December 2023.

Director General of industry body CII Chandrajit Banerjee said agriculture and rural segments should be a key priority to drive inclusive growth in the interim Budget.

"In agriculture, warehousing must be promoted to reduce wastage. Coverage of electronic Negotiable Warehouse Receipts (eNWRs) must be increased, and we have recommended allowing them to be used to access finance, trading, and settlement of trade," he said.

Also Read | Budget 2024: A quick guide on how to read the Budget document

The industry chamber also made a case for moving towards dispensing fertilizer subsidies directly as cash transfers to farmers.

India needs budgetary support and stronger Farmer Producer Organisations (FPOs) to optimise operations and tap into emerging market opportunities, Gaurav Manchanda, Founder & Managing Director of The Organic World, said.

"Higher farm insurance outlays, greater investment in rural employment schemes, better irrigation facilities, and improved rural infrastructure can make a huge difference," he said.

In the Union Budget for 2023-24, Sitharaman allocated 1.25 lakh crore to the Ministry of Agriculture and Farmers' Welfare, including Agricultural Education and Research. The allocation was increased manifold from 27,662.67 crore in 2013-14.

Also Read | Budget 2024 date: February 1 vs February 28. Why Budget presentation date was changed?

In the upcoming interim Budget, M K Dhanuka, Managing Director of Dhanuka Agritech, expects that the government will continue the initiatives taken for the promotion of agriculture.

"Specifically, we expect some increase in PM-Kisan Samman Nidhi and enhanced rural spending, potentially manifesting in larger allocations for established rural schemes. Improving rural infrastructure is likely to remain a prominent government priority," he said.

In the last Budget, 60,000 crore was earmarked for the Pradhan Mantri Kisan Samman Nidhi (PM-Kisan). More than 2.81 lakh crore has been released to more than 11 crore farmers as of November 30, 2023, through Direct Benefit Transfer (DBT) under the scheme.

Ajai Rana, Chairman of Federation of Seed Industry of India (FSII) & CEO of Savannah Seeds, stressed the policy environment which attracts more foreign direct investment in the seed sector.

Also Read | Budget 2024: Interesting facts about the Budget presentation

"There is no denying that to improve productivity and farmers' income, we need more innovation. In this backdrop, a policy which encourages the protection of intellectual property and foreign investment would be helpful as this will encourage more players to invest in India benefiting our economy, farmers and overall productivity," Rana said.

P C Musthafa, Global CEO of iD Fresh Food, said that the government should give priority to promoting food safety standards and substantial investments in technology.

"As a proud 'Make in India' brand, our hope is for the budget to become a catalyst for innovation, streamlining regulatory processes, and fostering the growth of the food manufacturing sector," he said.

CII has also suggested that the food and fertiliser subsidies, which constitute the bulk of the subsidies, should be rationalised by better targeting and efficient utilisation without impacting the deserving beneficiaries.

Currently, the food subsidy programme is based on the data available from the 'Household Consumer Expenditure Survey 2011-12', the industry body said, adding that with economic growth and declining poverty, it is important to use more current data for better targeting.

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