Budgeting for better agri-growth

Support for initiatives that are integral to the India AgriStack will yield large gains in the long run

Given how the proposed reforms in the farm sector were aborted, the government was not expected to come up with any special measures for farmers. Political considerations ahead of crucial assembly elections in Punjab and Uttar Pradesh would also have restrained the government from announcing any reformist policy proposals of the kind envisaged in the farm laws. However, given its importance as the biggest employer, the sector could perhaps have attracted more from Budget FY23. The rural push too was somewhat weaker than anticipated; the outlay for NREGA, at Rs 73,000 crore, is smaller than the Rs 98,000 crore spent in FY22. The outlays on urban and rural housing were kept unchanged at Rs 47,000 crore. The government is probably banking on the revival gaining momentum and has pencilled in less demand for this employment scheme. However, if it wants to spend more, the funds can be raise through supplementary demands. Although the income support to farmers may have been left unchanged in the budget estimates for FY23, the government is spending on procurement. The procurement of foodgrain—wheat and paddy—during FY22 has been substantial at 1,208 metric tonnes from 163 lakh farmers; a significant amount of Rs 2.37 lakh crore would be paid directly into farmers’ accounts.

The outlay for the fertiliser subsidy has been trimmed by about 25% at a time when prices are on the rise globally; however, it is possible the allocation will be increased later in the year. To be fair, there are several initiatives being planned such as the use of drones for crop assessment, digitisation of land records and spraying of insecticides and nutrients. The PPP mode that is under consideration is a good idea; public sector research and extension institutions will work with private agri-tech startups and other stakeholders.

These initiatives are integral to the AgriStack being put in place by the NDA government with data it has been gathering from over 50 million farmers since 2014. Data from schemes like PM Kisan Samman Yojana (PMKSY), Soil Health Card and PM Fasal Bima Yojana will be linked to land records available with state governments. Once this information is seeded into a single database, AI and data analytics can be harnessed to provide actionable intelligence and personalised services that can boost farmer incomes by addressing challenges like plateauing yields, soil degradation, wastage, inadequate market and infrastructure. AgriStack is integral to the larger Digital India initiative that uses technology to transform how it delivers services to the population. Through authentication by Aadhaar, the government is already transferring food and fuel subsidies, MGNREGA wage payments, PMKSY payments, and wheat and rice procurement in a more targeted manner.

The fact is that most farmers continue to cultivate holdings that are diminishing in size given the opportunities to move to urban areas are limited. The need is to step up investments not just in cultivation but also livestock and fishing; there is also the need for crop diversification, from cereals to high-value crops to boost farmer incomes. Farmers need to be provided with more irrigation facilities. There is a need to prepare for extremely heavy as well as poor rainfall and develop drought-resistant and short-duration crops. The outlay for crop science and agri R&D needs to be upped. According to the latest Economic Survey, every rupee spent on agri R&D yields better returns than a rupee spent on fertiliser and power subsidies, improves farmer livelihoods, and contributes in a big way to sustainable agriculture.