The Union Budget was presented by FM Arun Jaitley against plummeting farm incomes despite a good agriculture growth of 4.1 percent and healthy production of rain-fed Kharif crops in 2016-17.
The impacts of demonetization were not that beneficial for the agriculture sector. The incomes of the farm were adversely impacted due to it.
Consequently, it caused a fall in the prices of fruits and vegetables.
Wholesale prices of pulses have fallen below the rate of support prices which are set by the government following a most productive harvest.
The government’s approach of increasing the financing capability of existing institutions by establishing dedicated funds is being seen by experts as good move to secure funds for the government’s farming initiatives without impacting the fiscal roadmap.
The Union Budget 2017 has:
- Opened the doors for market reforms in agriculture,
- Set a higher target for farm credit and
- Increased funding for crop insurance, as the government stepped up to tackle distress in rural India.
The budget for 2017-18 chose National Bank for Agriculture and Rural Development (NABARD), for implementing schemes to develop the dairy sector and improve access to irrigation.
To enhance access to irrigation, the budget allocated INR 20,000 crore for the long-term irrigation fund under NABARD under “per drop, more crop” initiative.
Under the “Har Khet Ko Pani” scheme initiative, the budget allocation of INR 5,000 crore for setting up of a dedicated micro-irrigation fund under NABARD was made.
Additionally, INR 8,000 crore was allocated for the setting up of a dairy development fund under NABARD.
Overall, NABARD’s refinancing capacity has been increased by almost INR 34,900 crore across numerous initiatives.
The finance minister proposed a model on contract farming to help farmers get enhanced value for their produce.
This model law will be circulated among states across the entire country.
The Budget elaborated the government’s previous goal of bringing in more regulated agriculture markets on the electronic National Agriculture Market (e-NAM) platform.
In the budget, it is indicated that the coverage of the electronic National Agricultural Market (e-NAM) would be expanded from the current 250 markets to 585 mandis.
Budget by government has asked state governments to delist perishables produce from Agriculture Produce Marketing Committees (APMCs) and allow farmers to sell such items face to face to consumers to get a better price
There is 24 percent increase in the funding for the rural and agriculture sector in fiscal 2017-18 to INR 1.87 trillion.
The government has made efforts to provide the flagship crop insurance to all farmers.
For this, the budget raised the allocation from INR 5,500 crore to INR 9,000 crore in 2017-18 for scheme Pradhan Mantri Fasal Bima Yojana (PMFBY).
The government plans to bring 40 percent of cropped area under insurance and take it to 50 percent next year.
Programs such as Rashtriya Krishi Vikas Yojana (RKVY) witnessed a 12 per cent reduction in allocation from the 2016-17 Budget Estimate of INR 5,400 crore to INR 4,750 crore in Budget Estimate 2017-2018.
The Union Budget increased the allocation of the Pradhan Mantri Krishi Sinchai Yojana (PMKSY) by 42.1 per cent in the 2017-18 Budget Estimates. This means INR 7,375.92 crore from INR 5,187.01 crore.
This was done with the purpose to accomplish pending projects and taking up new ones Budget has enhanced the target for agricultural credit allocation, crop insurance, and irrigation.
The government raised allocation under MNREGA increased from INR 38,500 crore to INR 48,000 crore.
The road work under Pradhan Mantri Gram Sadak Yojna is accelerated to 133 km roads per day in 2016-17 from 73 km per day during 2011-14.
Increased allocation as per MNREGA would help in strengthening social safety net in the rural economy.
The rise in construction of rural roads would create a further demand for two-wheelers, especially gearless scooters, in the rural areas.
The entry-level passenger vehicle sector also gets 30 percent of its demand from the rural market and likely it will be able to maintain it in future.
Cabinet approved extending of tenure of loans under Credit Linked Subsidy Scheme of Pradhan Mantri Awas Yojana from 15 to 20 years.
For women empowerment, Mahila Shakti Kendra at village level will be in place in this financial year.
For fulfilling the basic need of electrification, the government has promised to achieve 100 percent village electrification by May 1, 2018.
1,00,00,000 houses will be constructed by 2019 for those residing in kaccha houses.
The union budget announced an extension of tenure of loans under Credit Linked Subsidy Scheme of Pradhan Mantri Awas Yojana from 15 to 20 years.
The government also pledged to double the income of the farmers in 5 years.