Budget 2015: No big proposals for farm sector

NEW DELHI: The main takeaway for the agriculture sector from the Budget was a proposal to create a national agricultural market to boost farm productivity and farmers’ income. While Arun Jaitly said “our commitment to farmers runs deep”, his Budget lacked big-bang programmes targeting the sector.

The finance minister proposed to increase the target of agriculture credit by Rs 50,000 crore to Rs 8.5 lakh crore and allocated Rs 5,300 crore for micro-irrigation. His plan to allocate Rs 25,000 crore to the corpus of a Rural Infrastructure Development Fund set up Nabard, too, will aid the sector.

The increase in credit target is less at a time when the government’s Economic Survey itself has highlighted farmers’ falling income and low coverage of formal credit, said Sudhir Panwar, president of the Kisan Jagriti Manch in Lucknow. “Increase of only Rs 50,000 crore in agriculture credit is the lowest in recent years.”

Several other farmer bodies and sector experts also expressed similar views. Nevertheless, they want the government to ensure that the money reached the needy.

As much as 94% of farm credit at 4% interest actually goes to the agribusiness industry, and not directly to farmers, said food policy analyst Devinder Sharma.

Surjit S Bhalla, chairman of Oxus Investments, a hedge fund and emerging markets advisory firm, however said the government’s Jan Dhan Yojana initiative to give bank accounts to each household will help the credit reach farmers in rural areas. “The budget is pro farmer with more investment in giving credit and other social security schemes,” he said.

Anil Jain, managing director of Jain Irrigation, which sets up drip-irrigation facilities and works in agriculture and related segments, said the allocation towards micro-irrigation programmes will lead to 20-30% growth for companies like his. As of now, out of the 140 million hectares under cultivation, only seven million hectares are under micro irrigation, he added.

Sanjay Kaul, MD and CEO, National Collateral Management Services, said allocation of Rs 25,000 crore for rural infrastructure along with the announcement to connect all habitations with all-weather roads will provide a fillip to development of the rural sector and boost farm incomes. "The exemption from service tax for pre-cooled storage structures for fruits and vegetables is also welcome, though it is doubtful whether such standalone measures are adequate for attracting large investments in agri infrastructure," he said.

The minister said the government will soon come up with an organic farming promotion scheme. He also proposed setting up a horticulture institute in Amritsar, Punjab.