Focus likely on farm productivity, irrigation potential and rural employment
NEW DELHI: The high economic growth rate in the current fiscal year is marred by what experts now define as the disparate growth of `India’ against `Bharat.’ Farmers’ suicides, inflation, special economic zones (SEZs) on farm land, `unviability’ of small farm holdings, Foreign Direct Investment (FDI) in the retail sector and growing unemployment occupied the centre-stage of national concerns for the better part of 2006. The budget 2007-08, will, therefore, have to address the `aam aadmi’ issues of inflation, livelihood and survival, particularly in the rural and agriculture sector.
The expansion of the National Rural Employment Guarantee Programme (NREGP), issue of farmers’ indebtedness, investment for raising farm productivity and irrigation potential, strengthening rural infrastructure, the Public Distribution System, enhancing the area under pulses and oilseeds and steps to tackle high prices of essential commodities will have to be at the centre of Finance Minister P. Chidambaram’s budget. Education and health sectors also urgently need infusion of finances.
Bharat Nirman and the NREGP shall continue to be the flagship programmes. The number of districts covered under the NREGP is expected to be raised to 330 with an outlay of Rs. 12,000 crore, up from Rs. 11,300 crore in 2006-07. The Pradhan Mantri Gram Sadak Yojna shall also get a fillip with additional funds for rural roads connectivity. Other Bharat Nirman programmes including the Indira Awas Yojna and drinking water will also get higher budgetary allocation to meet targets.
Time and again the Government, more particularly Prime Minister Manmohan Singh, has emphasised that unless the agriculture sector achieved a growth rate of four per cent, the overall economic growth of 8.1 per cent in 2006 will not sustain.
Indeed, quickly achieving four per cent growth rate — even by ad hoc measures — has become the benchmark for the mandarins of the Agriculture Ministry.
However, even after setting up the National Fisheries Board, the National Rainfed Authority, the Bamboo Mission and the National Horticulture Mission, the growth rate of agriculture and allied sectors (including high growth fisheries, animal husbandry and horticulture) remained at 2.3 per cent in 2006-07. The farm sector’s capital formation in GDP was 1.7 per cent in 2004-05, requiring urgent and sustained attention.
Access to credit
With farmers’ suicides symptomatic of the crises in the agriculture sector, credit remains the core issue. Not only does the demand for one-time waiver of farm loans has no takers, but the Government is yet to even address the issue of more than 60 per cent farmers not having access to credit.
The report of the Radhakrishnan Committee, which is looking into the indebtedness of farmers, is awaited. The M.S. Swaminathan National Commission of Farmers Report, which called for a National Policy on Farmers, has also been consigned to a Committee set up by the Planning Commission.
There are no signs either of a Comprehensive Crop Insurance Scheme for farmers to cover risk to crop and livestock.
On the other hand, it is expected that the Finance Minister will almost certainly announce incentives for the creation of a sugar buffer stock with industry, in view of the high production and low international sugar prices, discouraging exports. Pulses and oilseeds are also likely to get attention — the former for quality research inputs and the latter for revision in duty to check domestic prices.
The food and agro-processing industry may get tax concessions for setting up cold chains, abattoirs and food processing parks with linkages with terminal markets. This will also help Wal-Mart, Bharti, Reliance and other corporates entering the food sector.
It is anybody’s guess whether the Government will give in to the demand for excluding wheat, rice and sugar out of the forward market trade to control prices and counter the charge that the United Progressive Alliance Government favours corporate farming and multi-national company trade.
In the last two years, the Government has invested in basic and strategic farm research and will continue to do so.
However, there is widespread criticism that farm research is not addressing the need-based issues of stagnation in pulses and oilseeds output. There is also need to invest in research on developing crop varieties resistant to floods and climate change. However, Knowledge Centres may get requisite funding.
The decision on SEZs has been put on hold, but only temporarily.
Apart from this, farmers/workers also face the Planning Commission recommended strategy to shift 10 million agriculture workers to the non-agriculture sector. The proposed National Rehabilitation Policy has done away with the land-for-land component, saying, “wherever possible.”
And, with no jobs (as against mandays) being created to cater for such a huge population of uneducated or semi-literate farm people, the dispossessed rural population faces a crisis of existence.
Farmers and the rural poor, therefore, are seeking in this budget an all-inclusive action plan demonstrating the Government’s concern for their well-being and livelihood.