NDA government’s 6th Budget – A Disappointment to Farmers

For many weeks now, there have been speculative media articles about an imminent major announcement from the government, with regard to measures to be undertaken to address the agrarian distress and unrest in the country, often citing reliable sources in the government. The Budget announced on February 1st 2019 belied the expectations and once again showed the lack of intent on part of this NDA government to seriously address the issues of farmers in India. There have only been empty announcements of new schemes or dressing up of old schemes, without much change on the ground. We explain why we say so, below.

PM Kisan Samman Nidhi (PM-KISAN)

1)      Government’s declaration of PM Kisan Samman Nidhi is effectively an insult to the farmers – Rs.6000 per family per year too meagre to make any difference to the farmers’ plight.

2)      Finance Minister said that it is a major step towards doubling farmers’ income and that the farmers will not need to go to moneylenders. This shows that the government is completely disconnected from the reality of farmers. The Cost of Cultivation for most crops is around Rs.20,000 or Rs.25,000 per acre. A 5-acre farmer needs more than Rs.100,000 as an investment for each season. How can Rs.6000 per year given in 3 installments remove his/her need to go to moneylender?

3)      Rythu Bandhu scheme of Telangana provides Rs.10,000 per acre of support, which means that a 5-acre farmer would get Rs.50,000 per year, giving at least partial support towards cultivation cost.

4)      KALIA scheme of Odisha government provides Rs.10,000 per farmer in 2 installments. The support covers Landless agricultural workers, Tenant farmers and Sharecroppers also, whereas all these categories are left out of PM-KISAN.

5)      Both Rythu Bandhu and KALIA include a life insurance component of Rs.5 lakhs and Rs.2 lakhs respectively.

6)      Therefore, the PM-KISAN scheme is disadvantageous compared to the two schemes already in place in Telangana and Odisha.

7)      Not covered: Millions of tenant farmers, sharecroppers, landless agricultural workers, adivasi farmers without land pattas, distressed rainfed farmers owning more than 5 acres.

8)      How the funds will reach 12 crore eligible farmers within a month or two is a big question. It is almost impossible to prepare a master list of all the eligible landholders based on land records across the country. There is speculation that some existing database such as crop insurance database or soil health database would be used. However, this would be highly problematic because lakhs of farmers may not have opted to include in those schemes for various reasons including not being convinced of their utility. If they are left out of the PM-KISAN for that reason, it would be a large injustice.


Betrayal of MSP Promise – No mention of PM-AASHA

9)      Hiking MSP and ensuring that all farmers get the MSP were the major declarations of the previous Budget 2018. The raising of MSP to 1.5 times Cost of Production remained a hoax because the government used a partial cost measure (A2+FL) instead of Comprehensive Cost of Production (C2) while calculating MSP.

10)  Government announced the PM-AASHA scheme with major fanfare, promising to ensure that all farmers will be able to sell their crop at or above MSP. This is a combination of expanded procurement under Price Support Scheme, Price Deficiency Payment System on the lines of Bhavantar Bhugtan Yojana of Madhya Pradesh, and Private Stockist and procurement scheme. However, the total Budget allocation for PM-AASHA is only Rs.1500 crores in this budget. In order to fulfill the mandate of PM-AASHA, a minimum of Rs.50,000 crores to Rs.1 lakh crore was required.

As a comparision, the expenditure of M.P. government on Bhavantar yojana for just 5 crops was Rs.1800 crores in 2017-18, that too when they reached only around 20% of the farmers who cultivated those crops. It was calculated that if the scheme covered all farmers who cultivated those crops, the requirement would have been Rs.8400 crores (Dr.Ashok Gulati and Mr.Siraj Hussain).

Hence, the government has effectively given up on ensuring MSP reaches farmers. The reality is that in most crops, the farmers got much below MSP in Kharif 2018-19.

Loans and Indebtedness

11)  The Interest Subvention announcement is of minor significance because it applies only to loans which are rescheduled during calamities. With most natural calamities not even being declared by the government and poor implementation of loan rescheduling, this benefit would hardly go to 1% of the farmers.

12)  While farmers in several states are already getting interest-free crop loans, there was expectation that Union government will expand interest-free crop loans across India, but it proved to be a disappointment.

13)  The government was completely silent on the demand for loan waiver and debt relief mechanisms for the crores of indebted and distressed farmers.

14)  Prime Minister Modi stated in his ANI interview on January 1st, 2019, “There is only a very small segment of farmers who take loans from banks while a majority of them take loans from moneylenders.” It is shameful that the government has not announced any steps to make sure that the majority of farmers start getting bank loans!

15)  The Finance Minister in Budget 2018 speech assured that tenant farmers and sharecroppers would be identified and extended crop loans and institutional credit. No progress on that, and no reference in this year’s Budget speech or any allocation in the Budget.

Cows, Dairy and Animal Husbandry

16)  The government declared that the government “will do anything for protection and promotion of the cow”, and set up the National Kamadhenu Ayog – a Commission to ensure the welfare of the cow, but there is no statutory Farmers’ Commission for the welfare of farmers who nurture the cows. He did not even acknowledge the huge problem of stray cattle that have become the scourge of the farmers in villages across India, due to the irrational policies on cattle trade and the havoc by ‘gaurakshaks’.

17)  Meanwhile, the government’s support to dairy farming and animal husbandry has been very poor. In Budget 2017-18, with a lot of applause, a Dairy Infrastructure Development Fund was announced with Rs.10,881 crores allocation, to support and finance dairy units across the country within 3 years. Two years is already completed, and only Rs.440 crores has been disbursed so far! Similarly, in Budget 2018-19, an Animal Husbandry Development Fund of Rs.2430 crores was announced but it has not yet been set up after a whole year.

No Outcome Budget

18)  Though an Output Framework was announced two years ago, no Outcome Budget has been presented based on the output framework. It may be for good reason, because the performance is poor in many respects – as seen above in Price Support, Dairy and Animal Husbandry, and below in several schemes.

19)  In the Pradhan Mantri Fasal Bima Yojana, the target output was coverage of 50% of farm holdings but the actual coverage fell from 29% in 2016-17 to 24% in 2017-18 and this has further decreased in 2018-19.

20)  Converting 22,000 rural haats into fully equipped agricultural markets (GrAM) was declared as a priority in Budget 2018-19. But so far only 85 are complete and 180 are in progress.

21)  In NREGS, Rs.61,000 crores was spent last year, but the demand from states was more than Rs.80,000 crores. The pending payments itself runs to more than Rs.16,000 crores. But the allocation is lowered to Rs.60,000 crores this year (compared to Revised Budget 2018-19).

Alliance for Sustainable & Holistic Agriculture (ASHA)
(For more information Kirankumar Vissa: kiranvissa@gmail.com, 9701705743)






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