Pranab’s farm revival budget

Nothing outstanding. Nothing damaging. And heavily tilted towards the social sector. That’s how farm experts view the Budget. See graphics

Nothing outstanding. Nothing damaging. And heavily tilted towards the social sector. That’s how farm experts view the Budget.

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Hedging on a good monsoon, Finance Minister Pranab Mukherjee has avoided a big splurge. But he has indulged the UPA government’s core focus areas of productivity and food security with tailored funds.

For the first time, the Budget has talked about taking the Green Revolution to low-productivity states like Jharkhand, Bihar, Orissa and West Bengal. A similar programme in the 60s in Punjab and Haryana helped India become self-sufficient in food production.

The quibble is that this could have been a path-breaking ‘look east’ policy if Mukherjee had spared more than just Rs 400 crore. “You can’t start a second Green Revolution with just Rs 400 crore for five states,” said senior BJP leader and former finance minister Yashwant Sinha.

However, on the whole, allocations for agriculture will go up by about Rs 5,000 crore. “A good monsoon itself should take care of the rest,” said Abhijit Sen, head of agriculture at the Planning Commission.

Mukherjee increased the budgetary allocation for agriculture to Rs 20,870 crore in 2010-11, up 27.5 per cent from Rs 16,370 crore last year.

“The government has finally recognised that it has to focus beyond Punjab and Haryana,” said P. Chengal Reddy of the Consortium of Indian Farmers’ Association.

Mukherjee outlined a four-pronged strategy—easier access to farm loans, greater focus on food processing, cutting food wastage and increasing farm productivity.

The moves come in the wake of the worst drought last year since 1972 that cut farm output by 16 per cent. Nearly 52 per cent of all Indians are dependent on agriculture and allied activities.

The effects of the drought quietly showed up in the form of a supply crunch and surging food prices, the single biggest driver of inflation.

The Budget aims to ease supply bottlenecks by removing service charges on movement of cereals and pulses. “This could have been extended to movement of fruits and vegetables as well,” said Rakesh Bharti Mittal, who heads the Confederation of Indian Industry’s farm council.

The Budget, however, shies away from providing enough incentives for private investment in agriculture. “I am disappointed that there has been no focus to develop agricultural markets or boost private investment,” farm economist Y.K. Alagh said.

The Budget does, however, offer some sops such as waiving duties on import of farm machinery. But that may not be enough to pull the farm sector out of the 0.2 per cent negative growth rate. Another bad monsoon could badly hit the country’s ability to feed its millions.