BUDGET 2024-25: FOCUSSED IMPLEMENTATION KEY TO MAXIMISE IMPACT OF AGRICULTURE ALLOCATION

The Union Budget 2024-25 as mentioned by the Finance Minister seems to be an extension of the previous year’s mini and major budgets. While keeping the allocation relatively consistent, focussed more on infrastructural reforms. It goes in line with the proposal resting on 6 pillars of health and well-being, physical, and financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D, and minimum government and maximum governance

The Union Budget 2024-25 as mentioned by the Finance Minister seems to be an extension of the previous year’s mini and major budgets. While keeping the allocation relatively consistent, focussed more on infrastructural reforms. It goes in line with the proposal resting on 6 pillars of health and well-being, physical, and financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D, and minimum government and maximum governance.

It is worth noting that the allocation to agriculture under DAC&FW decreased in this budget concerning last year. Finance Minister Nirmala Sitharaman allocated Rs 1,23,017 crore to the Department of Agriculture, Cooperation and Farmers Welfare. This is 8.5 percent less allocation as compared to last year. According to revised estimates, the Union Government may be able to spend only Rs 1,16,757 crore out of the allocated Rs 1,34,399 crore in 2020-24. Low utilisation is a big obstacle for most agriculture-based schemes.

Per Drop, More Crop Utilisation Requires A Significant Uptick In Measure

While the Per Drop More Crop scheme for micro-irrigation coverage has benefitted millions of farmers, the scheme implementation leaves a lot to be desired at the execution level. This year’s economic survey also points out micro-irrigation as a key component that helped the robustness of agriculture in the pandemic era. The consistent fund allocation like last year shows the government's intent and focus to boost micro-irrigation coverage. While a fund allocation is similar to last year’s allocation of Rs 4,000 crore, an estimated utilisation of Rs 2,563 crore for FY19-20 reveals that the scheme is working at only 65% potential. Given the acute nature of water stress and the immense benefits that micro-irrigation provides, this needs proper implementation at the Central and State levels to reach sustainable utilisation levels. Consistent online monitoring and review with full 12 month availability of schemes at the State level can boost the utilisation to desired levels.

Doubling Of Micro Irrigation Fund (Mif) Under Nabard Is A Welcome Step

It is good to see the announcement of the increase of the Micro Irrigation Fund (MIF) under NABARD from Rs 5,000 crore to now Rs 10,000 crore. This is an excellent step in line with the Government’s ‘Per Drop More Crop’ initiative and will help increase micro irrigation coverage in all states and achieve the Government's target of 1 crore ha in 5 years. This translates to covering 20 lakh Ha. annually. To improve MIF utilisation, we request removing the condition of fund disbursement only against additional subsidy and request that it should be available for mandatory state share as well.

The additional fund could keep the momentum up in states like Tamil Nadu, Maharashtra, Gujarat, and Karnataka which are already in favour of the scheme, help restart in states like Andhra Pradesh and Telangana and bring newer states like Uttar Pradesh, and Bihar, Jharkhand, etc. under its gamut. Till date, approximately 12.3- 12.4 million ha area has been covered under the MIF scheme.

Access To Credit Alignment With The Volume Of Credit Remains A Critical Area To Focus

In Budget 2024, FM Sitharaman also proposed to increase the agriculture credit target to Rs 16.5 lakh crores. To keep the growth on an upward curve, volume and access to credit remain the critical elements in a sustainable and more importantly growing ecosystem. Easy credit access for the adoption of modern technology in farms, purchasing micro-irrigation equipment, or infrastructure creation related to farming can go a long way in building a sustainable development model in agriculture.  

Another Measure Requires A More On-Ground Approach To Success

The movement of ‘Operation Green’ from TOP (Tomatoes, Onions, Potato) to TOTAL (covering 22 perishable commodities) can boost both - the price realization to farmers as well as improving agriculture market access and infrastructure. We have seen how ‘Operation Flood’ with efficient execution impacted the dairy industry, and it is high time that fruits and vegetables get in the value-added focus. The sector now requires value improvement in the chain through better technology like micro-irrigation, farm inputs access, better cold storage facilities, and right market access. The development of produce clusters, vegetable colonies, etc. will significantly transform the sector.

Similarly, the proposal for Agri cess and its impact on consumers and production costs needs to be addressed immediately. The right mechanism to access the Agri Infra Fund and its monitoring through a dedicated agency can boost infrastructure growth.

The agriculture sector will grow on the pillars of productivity, efficiency, and value realization leading to income augmentation for farmers. The increase in rural infrastructure development funds to Rs 40,000 crore and the vision of adding 1,000 more mandis to be integrated with the electronic national market can disrupt the current digital stagnancy.

While on paper, the budget points out significant development in rural and agriculture infrastructure with a focus on value generation and market realisation, the real success will depend on the efficient implementation of the current and proposed plans.