Minister of Finance & Corporate Affairs, Mrs. Nirmala Sitharaman tabled the Economic Survey 2018-19 in Parliament today. With the theme of Shifting Gears and “Blue Sky” policy-making, India aims to achieve a sustained growth rate of 8% to become a $5trillion economy by 2025.
Source: Economic Survey 2018-19, Press Information Bureau
By TJEF Editor Vasudeva Kamath
Challenges faced by the Industry
- Large number of marginal farmers in India: There are a large number of marginal farmers in the country due to the fragmented land holdings. The fragmentation is to such an extent that it is economically unviable to cultivate crops by using mechanized farming methods.
- Lack of storage facilities: About 10% of the agricultural produce gets wasted due to lack of proper storage facilities in the country. There also the problem degradation of the quality of produce due to improper storage.
- Lack of proper irrigation channel: Indian farmers are largely dependent on the monsoon for irrigation. There is no proper implementation of irrigation facilities to grow the crops around the year.
Expectations from Budget
- The budget amount allocated to the agriculture sector was to the tune of Rs.1.5 lakh crores. The expectation this year is at least 8-10% increased allocation.
- Establish fund to guarantee credit to encourage investment in agriculture
- Allocate more funds for crop insurance schemes
- Increase spending for dams and canals, micro-irrigation systems
- Provide subsidies for building cold storage to avoid wastage of perishable crops
- Government has decided to keep minimum support price (MSP) for all unannounced Kharif crops at least one and half times of their production cost after declaring the same for the majority of Rabi crops
- The government has allocated a total of 1,87,223 crores, which is 24% more than what was allocated in the previous financial year.
- The volume of credit for agriculture is proposed to be at Rs. 11 lakh crores from the present Rs. 10 lakh crores, thus catering to the expectation from the budget.
- A new Scheme ‘‘Operation Greens’’ was announced with an outlay of Rs 500 Crores to address the price volatility of perishable commodities like tomato, onion and potato
- Agri-Market Infrastructure Fund with a corpus of Rs.2000 crores will be set up for developing and upgrading agricultural marketing infrastructure
- Rs 200 crores allocated for organized cultivation of highly specialized medicinal and aromatic plants
- National Bamboo Mission will be initiated with an outlay of Rs.1290 crores to promote bamboo sector in a holistic manner
- Ministry of food processing has got an almost double increase in allocation from Rs. 715 Crores to Rs. 1400 Crores
- Under Prime Minister Krishi Sinchai Yojna, 96 deprived irrigation districts will be taken up with an allocation of Rs 2600 crores
- To realize the full potential of Indian agricultural exports (about USD100 billion), the export of Agri-commodities will be liberalized
This year’s budget is termed as the “Next Green Revolution” by many experts. With normal monsoon forecasted for the year, there would be a good pickup in agricultural activities during the sowing season. We can expect a significant contribution from agriculture sector towards the GDP this year.
– By Kriti Kanchan Sinha, Editor, TJEF
Read the PDF file on Economic Impact of Doklam stand-off