Will the budget actually benefit farmers? -Jayati Ghosh
There are enormous questions about implementation, and the first issue is that of identifying the farmers
Everyone expected the Narendra Modi government to do something big — or at least promise something big — before the general elections. Everyone also sensed that it would be something to do with farmers, one of the economic and social concerns that have now also become a political talking point. But perhaps no one expected that the government would dare to make massive budgetary commitments for the coming year in a vote-on-account (or interim budget), which is constitutionally outside the mandate of an outgoing government. A vote-on-account is only supposed to include spending measures for the immediate future.
It remains to be seen whether the brazen declarations in Budget 2019-20 on both increased spending and revised taxation policies that hand out many concessions would stand the tests of legality and constitutionality. The more significant question may be: will the various measures suggested actually be of benefit to farmers?
The big measure — in fact, the only significant measure — is the income transfer scheme for small farmers described as a “historic programme”: the Pradhan Mantri Kisan Samman Nidhi or PM-KISAN. The budget speech promises that “vulnerable landholding farmer families, having cultivable land upto 2 hectares, will be provided direct income support at the rate of Rs 6,000 per year. This income support will be transferred directly into the bank accounts of beneficiary farmers, in three equal instalments of Rs 2,000 each.” This will be fully funded by the Central government, which expects that around 120 million small and marginal farmer households will benefit.
This number must be based on the Agricultural Census 2015-16, which estimated around 12.5 crore operational holdings of 2 hectares or less across the country. Given this number, the expected annual expenditure is Rs 75,000 crore that would be payable by the incoming government over 2019-20. However, since the ruling party clearly wants some quick financial transactions to translate into electoral gains, the government proposes to make the scheme effective from December 1, 2018, so as to pay the first instalment by March 31, 2019. To that end, the finance minister has allocated Rs 20,000 crore for this transfer in the current financial year.
A sum of Rs 75,000 crore is a large amount for sure, but when considered in individual household terms, the amounts do not seem too large. As the Opposition has been quick to point out, this comes to a measly Rs 500 per month per family, or Rs 3.33 per day for a five-member farming family. This is not just a small amount in itself, it is also tiny relative to the average costs of cultivation of most crops across India.
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Tagged with: Income Support Scheme Income Support Scheme For Small And Marginal Farm Households Interim Budget Pradhan Mantri Kisan Samman Nidhi Union Budget Agriculture Census Pradhan Mantri Kisan Samman Nidhi Yojana