With the presentation of the fifth budget of the NarendraModi government now only a fortnight away, the policy option at the highest level of the Government has zeroed in on giving a big stress on the removal of farm distress in the 2018-19 budget proposals.Prime Minister NarendraModi who is masterminding the direction of the last full budget of his present NDA regime before the Lok Sabha elections in April/May 2019, has given strict instructions to the officials that the speedy removal of the farm distress and the immediate measures to generate jobs for the youth have to be the two pillars of the 2018-19 budget strategy.In the process, the Government will organize more public investments without waiting for the domestic private investment to pick up.
Mr. Jaitley is very firm for maintaining the fiscal deficit target in the 2018-19 budget also and it has become a bit of ego issue for him but he has been advised that in the present slowdown scenario of the economy, it will be better to spend more for pepping up growth even if that crosses the fiscal target a bit. There is political pressure from the BJP cadres at the grassroots level and the RSS for immediate creation of jobs for the youth and at the PMO also, the policy makers are not averse to spending more in the next fiscal to ensure increased benefits to the ruling party in the ensuing assembly elections in 2018.The strategy sessions held by both the BJP leadership and the PMO have mentioned that improving the farm conditions is the key to economic growth in the next fiscal and if the Government fails in ensuring buoyancy in agriculture, its adverse impact will politically hurt the BJP in both assembly elections and the LokSabha elections in the coming year.
The CSO data of the Government has projected the agricultural growth at 2.1 per cent in the current fiscal as against 4.9 per cent in 2016-17. This slowdown led to serious farm distress as was evident from the farmers agitations in different states last year.This slow growth has led the CSO to peg the GDP growth target in 2017-18 at 6.5per cent, the lowest in the last four years.The Modi Government claimed before the demonetization in November 2016 that the crisis and disruption, would not trickle down to the next financial year, but the data shows that the crisis has continued and the disruption which took place in the informal sector following demonetisation, has led to notonly joblosses in the rural areas but also led to substantial reduction in ruiral income leading to accentuation of distress.Though officially, the Modi government denies the big disruption in the informal sector, the officials are engaged in doing damage management and the farm strategy is taking care of the problems faced by the rural people affected by this disruption in post demonetization era.
Prime Minister NarendraModi has been talking of doubling farmers income by 2022 and as a part of that the advance action will be taken in the 2018=19 budget.Already the Government has with it the recommendations of a top level official panel which has gone into the present p[light of the farmers and have suggested measures to make agriculture more profitable so that farmers income can be doubled in the next five years.This panel has suggested adoption of a liberalized land leasing policy to recognize tenant farmers, contract farming,freeing up of agricultural markets and strengthening decentralized procurement of crops by the states,
The panel has given big stress on improving the marketing network to help the farmers.With the goal of transforming agriculture into profitable agri businesses, the panel has suggested revamping of the marketing division of the agriculture ministry into a division of marketing agri logistics and upgrading the RashtriyaKrishiVihasYojana into a a division on investments in agriculture to promote investments in agriculture production and post-production facilities.
A major recommendation is the change in the definition of farmer to include cultivators, lesse farmers and share croppers.This change in definition is expected to help the cultivators and large number of share croppers to get access to the support system and finances to move on their own. The panel’s analysis shows that to achieve a desired 10.4 per cent annual rise in real farm income, capital investments by the private and the public sectors need to grow at 12.5 per cent and 16.8 per cent respectively per year for seven years between 2015-16 and 2022-23.This means an increase in private and public investments from Rs.1.78 trillion in 2015-16 to a staggering Rs.4.86 trillion in 2022-23, calculated at 2015-16 prices.
This is a gigantic task and for organizing this kind of investments in agriculture, extensive reforms have to be done.Prime Minister has talked of the target of doubling farm income but the Government lacks that political and administrative will to create the necessary environment for achieving that.The social tensions in rural areas due to the divisive policies of the ruling party BJP,have also contributed to the fall in agricultural production.How far the Prime Minister and his team can go to adopt policies for transforming Indian agriculture through 2018-19 budget that has to be seen.That way the last full budget of the NDA regime, is crucial for the future of Indian agriculture.(IPA Service)
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