Home TJEF TJEF Budget Series Budget 2023 Budget 2023 Analysis: AGRICULTURE
Budget 2023

Budget 2023 Analysis: AGRICULTURE

BACKDROP

The Circle of Life is consistently restored. The seasons shift. The sun rises and sets. Nature rejuvenates. The body recovers. The rims of the economy also rise after each downturn. Greater consumption is a result of having more disposable income. Private consumption growth is a factor in rising revenues and profits. More profitable businesses generate better tax revenues. Greater social welfare is made possible by fuller treasuries. This was explicitly acknowledged in the Budget, which also began the beneficial investment cycle, with its focus on heavy investment in technology and innovation in the primary sector of the country. The macropolitical environment in which the budget for 2023–24 was presented was difficult. Contrary to the previous two years, the increase in revenues brought on by high nominal GDP growth is unlikely to be duplicated; in addition, India’s real growth is projected to drop due to dark clouds brought on by a global downturn of recession & finally, general elections in 2024 means political compulsions. Even though India’s service sector accounts for the most amount of contribution in the GDP today, more than 70% of the rural households in India still depend on Agriculture as their primary source of income & livelihood. In the last six years, India’s agriculture sector has expanded at an average annual rate of 4.6%, in part due to favourable monsoon conditions. But in India, farming is still among the riskiest occupations. A farmer frequently prepares for subpar returns and middlemen. The budget for 2023–24 has a strong emphasis on long-term sustainable growth, which makes it encouraging for the farming community and the entire agriculture sector. This year’s budget makes a sincere effort to encourage innovation & technology in the sector to make it future ready. However, there are also concerns that wider allocations to farmers are being reduced by announcing new funds.

NEW MEASURES & THEIR EXPECTED EFFECTS

HITS:

  • To support farmer-centric solutions, the digital public infrastructure for agriculture will be developed as an open-source public good. Farmers will benefit from better crop planning and easier access to credit and insurance services thanks to the proposed digital Agri-stack. The development of Agri-tech firms will also be assisted by the digital infrastructure.
  • A fund to assist young entrepreneurs from rural areas in starting up agriculture businesses was also mentioned in the budget. “The fund will aim at bringing innovative and affordable solutions for challenges faced by farmers. It will also bring in modern technologies to transform agricultural practices, increase productivity and profitability,” the finance minister said in her speech.
  • The accelerator fund will support budding entrepreneurs while providing creative and cost-effective solutions to issues facing farmers, particularly with regard to increasing profitability and gaining access to contemporary technology.
  • For PM Kisan, which gives all farmers a yearly cash transfer of 6,000 in three instalments, the budget allotted 60,000 crore rupees.
  • With funding of $2,200 crore, the budget committed to establishing the Atmanirbhar Clean Plant Program to increase the availability of high-value horticulture crops with disease-free, high-quality planting material.
  • The Prime Minister’s Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth (PM-PRANAM), a new initiative to encourage governments to promote alternative fertilisers and balanced usage of chemical fertilisers, was also announced in the budget. The Centre budgeted 1.31 trillion rupees for urea subsidies and an additional 44,000 crore for phosphatic and potassic fertilisers in 2023–24, which is a major decrease from last year when worldwide nutrient prices skyrocketed as a result of the conflict in Ukraine.
  • The budget committed to supporting the Indian Institute of Millet Research in Hyderabad as a Centre of Excellence for exchanging best practises, research, and technology in an effort to establish India as a global centre for millets on an international scale. At least ten varieties of millets, which are more nutrient-dense than rice or wheat and climate-smart crops using less water and fertiliser, are grown in India, which is currently the world’s largest millet producer.
  • The budget also upped the aim for disbursing agricultural credit from 18 trillion to 20 trillion from last year. Additionally, it pledged to create additional cooperatives in the dairy and fishery industries as well as decentralised storage facilities for farmers.
  • A new sub-plan of the Prime Minister’s Matsya Sampada Yojana was also announced, with an investment of 6,000 crore, to help fishermen, seafood merchants, and microbusinesses increase the efficiency of their value chains and assist market growth.
  • The budget targeted 10,000 bio-input resource centres to encourage ten million farmers to abandon chemical farming in order to promote greater use of natural farming practises. It also disclosed strategies for setting up a network of pesticide and micro-fertilizer producers throughout India.
  • Expansion of Pradhan Mantri Fasal Bima Yojana (PMFBY): The PMFBY provides insurance coverage to farmers against crop losses due to natural calamities. The budget has announced an expansion of this scheme to cover all districts in the country.
  • Development of Farmer Producers Organizations (FPOs): The government plans to set up 10,000 FPOs to help farmers achieve better prices for their produce.
  • Implementation of e-NAM: The e-National Agricultural Market is an online platform for trading of agricultural products. The government has announced plans to integrate 585 agricultural markets with e-NAM to improve transparency and efficiency in the agricultural sector.
  • Fertilizer subsidies would rise from Rs 105,222 crore in FY23 to Rs 2,25,000 crore, according to the budget. Companies like Gujarat Narmada Valley Fertilizers & Chemicals Limited, Rashtriya Chemical and Fertilizers, National Fertilizers, Madras Fertilizers, Chambal Fertilizers, and Deepak Fertilizers are anticipated to gain from this action.
  • It is predicted that the budget recommendations may have some advantage for the tobacco firm, ITC. Chart patterns and reports suggest that ITC’s shares have performed well in the current market, which is another reason why the performance of its shares appears to be positive.

MISSES:

  • The government had set an ambitious goal of doubling farmers’ income by 2022. There was no update on that promise. The Market Intervention Scheme and Price Assistance (MIS-PSS) and Pradhan Mantri Annadata Aay Sanrakshan Yojna (PM-AASHA), two significant programmes that guarantee the minimal support for price-based procurement activities in the nation, however, suffered a sharp reduction. Due to a nearly 100% reduction in funding—from Rs 1,500 crore to Rs 1 lakh—MIS-PSS was essentially neglected. Additionally, the PM-AASHA scheme had its budget cut from Rs 1 crore to Rs 1 lakh. The funding allotted for the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), a programme that offers economic incentives to landowner farmers, remained constant at Rs 60,000 crore.
  • The department of agriculture and farmer’s welfare’s overall budget was reduced from 1.24 trillion in 2022–2023 to 1.15 trillion in 2023–2024. From 1.38 trillion in 2022–2023 to 1.31 trillion in 2023–2024, the entire budgetary allocation for agriculture, comprising the departments of research, animal husbandry, and fisheries, was reduced from ₹1.38 trillion in 2022-23 to ₹1.31 trillion in 2023-24. However, the budget for the fisheries sector was raised marginally from ₹2,118 crore (2022-23) to ₹2,248 crore, while the livestock budget was raised from ₹3,919 crore to ₹ 4,318 crore. The budget for agriculture research was raised from ₹8,514 crore in 2022-23 to ₹9,504 crore in 2023-24.
  • Addressing the issue of low agricultural productivity: Despite the allocation of funds for infrastructure development, the budget did not address the root cause of low agricultural productivity, such as the lack of access to modern technology and low investment in research and development.
  • Addressing the problem of low farmer income: While the budget has increased the allocation for agriculture credit, it did not address the broader issue of low farmer income, which is due to factors such as the lack of fair prices for their produce, high input costs, and the lack of access to market information.
  • Lack of focus on sustainable agriculture: The budget did not provide any significant allocation for the promotion of sustainable agriculture practices, such as organic farming and water conservation, which are crucial for long-term food security and environmental protection.
  • Lack of support for small and marginal farmers: The budget did not address the specific needs of small and marginal farmers, who often struggle to access credit and markets and are most vulnerable to the effects of climate change.

While the initiatives announced in the budget are expected to improve the agricultural sector in India, the above-mentioned issues, if left unaddressed, could limit the long-term impact of these initiatives. Overall, there were some hits & some misses in the budget pertaining to the agriculture sector. Nonetheless, despite the decrease in the amount of allocation to the sector, the areas of focus can be a game changer with the right kind of execution.

-Editor

Simran Soni

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Articles

Budget Analysis 2023: Taxes

On February 1, 2023, Finance Minister Nirmala Sitharaman presented the Union Budget...

Budget Analysis 2023: Health Care

In News: In the Union Budget 2023, the government has allocated a...

Budget Analysis 2023: Automotive Sector

The Union Budget 2023, presented by the Honourable Finance Minister on February...

Budget Analysis 2023: EDUCATION

BACKDROP The school- going population of India has suffered greatly as a result...

Related Articles

TJEF Year-End Special: Unveiling the Best Weekly Articles of 2023

As we bid farewell to yet another transformative year, TJEF takes a...

Unwrapping the Journey: How Cadbury Redefined the Art of Chocolate Indulgence

As the festive season draws near, the chocolate industry is buzzing with...

Tesla’s India Entry: Navigating the Apple Model and Chinese Suppliers

The talks between Tesla and India have been ongoing for several weeks,...

Use of Blockchain and Crypto in BFSI

Blockchain technology and cryptocurrencies have become popular search terms over the last...

Budget 2023 Analysis: AGRICULTURE

BACKDROP The Circle of Life is consistently restored. The seasons shift. The...

Is there Stagflation in UK?

On September 2021, Liz Truss, former Foreign Secretary swept past former Treasury...

War, Venezuela’s saving grace:

Sanctions are a common tool used by governments and international organizations to...

The Middle East and the “Dutch Disease”

After long periods of lockdown and covid-19, here we are again talking...

Future Commerce and the Impact of manipulating commodity

Commerce is defined as “the buying and selling of things”. This holds...

International linkages: India’s comparative advantage and trade patterns

All of us have heard a multitude of things about the world...

Impact of the Russia-Ukraine War on Global Economy

Introduction On 24th February, 2022, Russia launched a full scale invasion of...

CLIMATEFLATION

These two words—climate change and inflation—are commonly read or heard in our...

INDIA’S ADDICTION TO GOLD

INTRODUCTION India, a country enriched with culture both long and wide, has...

UK Economic Crisis through Trade relations

Our world has undergone a multitude of changes in the last three...

Is stagflation debt crisis the future?

The global economy is gradually falling into the bottomless pit of economic...

Digital Speculation & Economy

Let us understand the entire volume of money in transaction and try...

Budget Analysis 2021: AGRICULTURE SECTOR

The budget presented on 1st February 2021 was an important one for...

BFSI and Disinvestment in Budget 2021

The banking and Financial Services Industry is an integral part of the...

Healthcare Sector

There are a lot of things that people wait for with baited...

Power and Renewable Energy Sector

We are doing our best every day, sitting on the same spot...

INFRASTRUCTURE SECTOR

India spends over 4 per cent of GDP on infrastructure, according to...

FISCAL POSITION

Union Budget 2021, the first budget of the decade, also the first...

Budget Analysis 2020: CONSUMPTION

The solution to every problem can be found only if the problem...

Volume 9, Issue 1

March 2024, Volume 9, Issue No.1 Welcome to Volume 9, Issue 1...

Volume 8, Issue 1

August 2023, Volume 8, Issue No.1 Predictability encompasses a myriad of factors...

Volume 7, Issue 2

March 2023, Volume 7, Issue No.2 The global landscape has been shaped...

Volume 7, Issue 1

August 2022, Volume 7, Issue No.1 A new academic year has dawned...