Neither outstanding, nor damaging; and heavily tilted towards the flagship rural job scheme, NREGA, at the expense of agriculture. That’s how farm experts have viewed the Budget.
In agriculture, the quibble is that finance minister Pranab Mukherjee could have spared some more cash, given his stress on 4 per cent farm growth.
The budget doesn't have any major incentive or sweeping reform, but it indulges the UPA government’s core focus areas: productivity and food security.
Mukherjee made a cautious mention of the proposed National Food Security Bill to provide 25 kg of rice or wheat at Rs 3 a kg without too many details. This indicates the government might review the eligibility criteria for cheap food with a fine-toothed comb.
Funding for the new food scheme has not yet been accounted for in the Budget. But it is likely to raise the food subsidy bill by Rs 17,000 crore, according to back-of-the-envelope calculations by HT.
“The budget is good for agriculture only because without what has been committed by Mukherjee-saab, we would be worse off,” said noted agro-economist YK Alagh.
His face plastered with a smile, Mukherjee announced massive doles. Allocation for NREGA, up by 144 per cent, stood at a staggering Rs 39,100 crore.
But for the critical Accelerated Irrigation Benefit Programme, it’s just Rs 1,000 crore. This when farm areas with deficit rainfall have shot up by 40 per cent and delayed irrigation projects have made matters worse.
Farm credit interest was lowered to 6 per cent. So, farmers can expect cheaper loans. Credit flow or loans to farmers will now touch Rs 3,25,000 crore.
“It’s not doles, but growth that will ultimately take you to your 4 per cent growth in agriculture,” said Ashok Gulati, Asia director of the International Food Policy Research Institute.
Farm allocation is very little, compared to welfare schemes, Gulati said. There was no word on high-value agriculture, like oilseeds, or unified markets or food processing schemes, he added.
Gulati said the government might be splurging too much on NREGA without any evaluation of its implementation.
However, given softer loans and cheaper food, the government is still on the right track to spur “inclusive growth”, said Sekhar Natarajan, the India head of farm tech major Monsanto.