Finance minister Arun Jaitley unveiled on Friday a budget focused on the poor and the rural economy, promising to double farmers’ earnings in five years to offset an agrarian crisis that has become a political challenge for the government.
The Narendra Modi-led government hopes to turn around the slowing rural economy with steps to boost rural infrastructure, irrigation, farmers’ insurance and better prices for farm products through a new marketing scheme.
The budget’s main focus is on irrigation, considered Indian agriculture’s Achilles’ heel. For agriculture and irrigation combined, the budget allocated Rs 54212.33 crore for 2016-17, a 108% jump from this fiscal.
Only 46.9% of the country’s 141 million hectares of cropped area have irrigation cover, while the rest are exposed to weather shocks. Back-to-back droughts in two years have triggered a sharp rural distress.
“We need to think beyond food security and give back to our farmers a sense of income security,” Jaitley told Parliament. “(The) government will, therefore, reorient its interventions in the farm and non-farm sectors to double the income of farmers by 2022.”
The budget signaled a targeted expansion of irrigation facilities with Jaitley announcing a revamped Pradhan Mantri Krishi Sinchayin Yojana, a scheme announced last year, by turning it into a national mission.
The scheme failed to make much headway because it was strewn across several ministries. The government hopes the move to make it a mission will help consolidate the scheme under a single command.
The government will bring 28.5 lakh hectares under irrigation, Jaitley said, besides completing 89 struck projects under a separate scheme, the Accelerated Irrigation Benefits Programme.
“We will ensure that 23 of these projects are completed before 31st March, 2017.”
Together, these projects will bring water to 80.6 lakh hectares of farmed areas, Jaitley said adding this would entail expenditure of Rs 17,000 crore next year. For the next five years, the irrigation expansion will cost Rs 86,500 crore.
The government also announced a dedicated long-term irrigation fund in the state-owned NABARD with an initial corpus of about Rs 20,000 crore. The budget provisioned for Rs 12,517 crore for this through “budgetary support and market borrowings” in 2016-17.