Union Budget 2014-2015 presented by the Finance Minister Shri Arun Jaitley

Comments by

Prof M S Swaminathan
Former Member of Rajya Sabha & Founder Chairman MSSRF

The Union Budget is a resource allocation exercise. The priorities in the allocation of resources are indicated in the address of the President of India to Parliament delivered on 9 June 2014. While the President’s address provides a framework for political and legislative action, the budget is the instrument for converting commitments into concrete achievements. Therefore the provisions in the budget have to be viewed in the context of the announcements contained in President’s address. In the field of agriculture, the Presidents’ address contains important statements. For example, reform of the Public Distribution System in order to ensure efficient delivery, as well as the preparation of contingency plans to face the challenges arising from subnormal monsoon are to be accorded priority.  Also, investment in agriculture infrastructure and agrotechnology will be stepped up considerably. Water conservation and effective use are also to be accorded high priority throughPradha Mantri Krishi Sinchayee Yojana with the motto of “Har Khet Ko Paani”. There is also a commitment to attract and retain youth in farming. A commitment has been made to adopt a National Land Use Policy.

The other major input in the preparation of the budget comes from the Economic Survey. The survey rightly calls for checkmating the adverse consequences of unfavourable monsoon as well as for vigilance against the rise in the price of petroleum of products as a result of the conflict in Iraq.  The survey also recommends a review of subsidies and the setting up of a National Common Market for agricultural commodities. The National Commission on Farmers had recommended the development of an Indian Single Market for farm commodities so that price volatility in different parts of the country can be avoided.

2014-2015 Union Budget

The budget presented by Shri Arun Jaitley today captures many of the above commitments made both in the address of the President and in the diagnosis presented in the Economic Survey. Shri Jaitley rightly cautioned against expecting too much in one budget but he indicated that this budget throws light on the roadmap for economic recovery and accelerated growth in agriculture and industry which the present government intends to follow.

Among the highlights in the farm sector, some of the important provisions are the following:

• Agriculture credit availability will be Rs. 8 lakh crore with provision to provide loans to farmers who make prompt repayment at 4% interest rate. A rural infrastructure development fund of Rs. 5000 crore will be available for bridging the rural-urban gap in essential infrastructure.
• Considering the fact that the present food grain storage arrangements are far from satisfactory, provision has been made for developing agricultural warehouses in rural India at a cost of 5000 crore. Funds have also been provided for encouraging producer companies particularly by young entrepreneurs as well as a price stabilisation fund of Rs. 500 crore. In addition, a provision of Rs. 500 crore has been made for agri-infrastructure fund.
• As promised in the Presidential Address, the Pradhan Mantri Krishi Sinchayee Yojana will have a support of Rs 1000 crore. In addition 1 lakh solar-powered agricultural pumps and solar power for irrigation will be provided at a cost of 400 crore. Drinking water policy will include the adoption of bioremediation techniques to provide safe water free of arsenic, fluorides etc. This will be initially taken up in 20,000 worst affected habitations at a cost of Rs 3600 crore.  Organic farming will be promoted in the North-east region with an allocation of Rs. 100 crore. Watershed development has been accorded priority with an allocation of Rs. 2142 crore.
• In the area of information dissemination, it is proposed to establish a Kisan Television as well as promote community radios. Efforts will be made to provide uninterrupted power to rural areas under Gram Jyoti Yojana costing Rs 5000 crore. To bridge the urban-rural digital divide, a National Rural Internet and Technology Mission for services in villages and schools will be organized at a cost of Rs. 500 crores.
• India being a land of the youth, skill empowerment of youth as well as mahila kisans will receive attention.  The National Rural Livelihood Mission will be extended to 100 more districts. Soil health cards will be provided to farmers and a New Urea Policy will be developed. I hope the Policy will give attention to improving the efficiency of the use of Urea through modern techniques like prilled urea.
• Reform of both FDI and PDS will be undertaken to make them more efficient and user friendly. A comprehensive plan will be developed to attack the serious problem of malnutrition within six months.  Meanwhile efforts will be made to launch a Protein Revolution through higher production of pulses.
• Taking into consideration, the potential address impact of climate change on agriculture  a National Adaptation Fund will be established at Rs 100 crore
• The Food Security Mission will cover 100 more districts. For landless kisans efforts will be made to provide sustainable livelihoods. Initially 5 lakhs landless labour families will be helped through NABARD. The Mahatma Gandhi National Rural Employment Guarantee programme will be redesigned to ensure better linkages with agriculture and the creation of permanent assets.
• Agriculture education and research will be strengthened through establishing new agricultural universities or institutes of agriculture in Assam, Jharkhand, Andhra Pradesh and Rajasthan. Horticulture universities will be established in Telungana and Haryana. It is proposed to set up a National Centre for Himalayan studies. The agri-biotech clusters in Mohali will be expanded and modern technology will be harnessed for improving farm productivity.
• Wherever necessary FDI will be encouraged particularly to fill gaps in critical infrastructure. Thus nearly all important areas of farming have been covered with renewed emphasis and additional investment.  Certain initiatives like Kisan Television have been a long felt need. Rural digital connectivity has been given importance.

The Finance Minister also mentioned about reviving the Special Economic Zones. In this connection, I would like to suggest that Special Agriculture Zones which can help to conserve prime farm land for agriculture, as for example the Rajasthan Canal Area or the Kuttanad region of Kerala, should also be taken up. We need to preserve prime farm land for agricultural purposes. As pointed out in the Economic Survey, an Indian Single Market which was recommend by the National Commission on Farmers should be established soon in

Overall, the budget places considerable emphasis on agricultural renewal and agrarian prosperity.  Obviously, the allocations are small but a beginning has been made to look at the problems in farming in a more holistic manner. I hope this process will be continued and by the time, the 2015-16 budget is presented, we will see that many of the root causes of the prevailing agrarian distress are eliminated.