Hard reality and political compulsions may force a rural-focused budget

Hard reality and political compulsions may force a rural-focused budget

 
Budgetary allocation to a particular sector indicates how much priority the government assigns to that sector as compared to the rest. A preliminary analysis by the Inclusive Media for Change team indicates that the actual expenditure (net of receipts and recoveries) by two of the country’s most important ministries, namely the Ministry of Agriculture & Farmers Welfare (MoAFW) and the Ministry of Rural Development (MoRD) was less than 1 percent of Gross Domestic Product (GDP) during the last 6 years.  

At first glance it may seem that the actual expenditure by the Department of Agriculture, Cooperation and Farmers Welfare (under the MoAFW) had more than doubled from Rs. 15,296.04 crore in 2015-16 to Rs. 39,840.5 crore (RE) in 2016-17 (as could be seen from table-1). However, various economists have argued that it happened simply because the head 'interest subsidy for short term credit to farmers', which earlier came as part of the demand-for-grants of the Department of Financial Services (under Ministry of Finance), was shifted to the agriculture ministry in that year.

If the allocation against the head 'interest subsidy for short term credit to farmers' is deducted from the entire expenditure, which is made by the Department of Agriculture, Cooperation and Farmers Welfare, then one notices that the overall spending by the MoAFW & MoRD as a proportion of GDP turns out to be 0.87 percent instead of 0.96 percent in the financial year 2016-17 and 0.86 percent instead of 0.95 percent in the financial year 2017-18.

One can only hope at present that such statistical jugglery will not be repeated when the Union budget 2018-19 is presented on 1st February this year.

Table 1: Expenditure of Ministry of Agriculture & Farmers Welfare and Ministry of Rural Development -- Net of receipts and recoveries (in Rs. Crore)
 
Table 1 

Source: Expenditure by various departments of MoAFW and MoRD has been taken from Expenditure Budget, Volume-2, from 2013-14 to 2017-18, www.indiabudget.gov.in  

GDP data (new series, current prices) from 2011-12 to 2016-17 has been taken from the Press Note on Provisional Estimates of Annual National Income 2016-17 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2016-17, released on 31st May, 2017, Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation (MoSPI), please click here to access

GDP data (new series, current prices) for 2017-18 has been taken from the Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, CSO, MoSPI, please click here to access

 
Note: 'RE' means Revised Estimate of Union budget; 'BE' means Budget Estimate of Union budget

The annual growth rate in expenditure by both MoAFW and MoRD (over previous year) has declined from 30.9 percent to 8.8 percent between 2016-17 and 2017-18. Please consult table-1.

The Finance Minister has recently stated that if economic growth does not benefit those who are dependent on farming, then it is neither justifiable nor equitable. Due to the upcoming assembly polls in 2018 in some of India’s big states like Karnataka, Madhya Pradesh, Rajasthan and Chhattisgarh, it is likely that the Union budget will focus this time on agriculture and rural development. On top of that, budget experts opine that more resources may be allocated for the agrarian sector in the financial year 2018-19 since it will be the NDA government’s last full budget against the backdrop of ruling BJP’s poor performance in the rural assembly seats of Gujarat during the recently held polls.

Apart from rising cost of cultivation, the main problems (among many) confronting the farmers are marketing of their produce at remunerative prices and uncertainties like crop damage due to extreme weather events or pest attacks.

It is worth noting that a recent survey-based report by a NGO shows that farming is no more an attractive profession even among majority of rural teenagers. Merely 1.2 percent of rural teenagers (aged 14-18 years) aspire to work in agriculture, says the 2017 Annual Status of Education Report 'Beyond Basics' (please check the URLs of the report below). Yet the same report by ASER Centre says that out of the total rural teenagers who work, 71.7 percent work in their own family's farm, 7.1 works on other people's farm and the rest 21.2 percent work in non-agricultural enterprises. The response by the teenagers, who were surveyed about their aspirations, is thus based on some first-hand account of their engagement in agriculture.  

Discrepancy in budgetary data

The figures on expenditure by the various departments under MoAFW and MoRD, which is provided by the annual publication entitled Finance Accounts at a glance (published by the Controller General of Accounts, available at http://www.cga.nic.in) and the ones, which is sourced from the annual budget documents (available at www.indiabudget.gov.in), are not the same.

Table 2: Expenditure of Ministry of Agriculture & Farmers Welfare and Mnistry of Rural Development -- Net of receipts and recoveries (in Rs. Crore)
 
Table 2 

Source: Finance Accounts at a glance 2011-12 to 2016-17, Controller General of Accounts (CGA), Ministry of Finance, http://www.cga.nic.in/Accountproc.aspx ; also check below the URLs of the report of various years

Note: Figures, which are in red, indicate that the data provided by CGA did not match with that provided by the Union Budget documents   

For example, according to the CGA, expenditure by the Department of Agriculture, Cooperation and Farmers Welfare, Department of Animal Husbandry, Dairying and Fisheries, Department of Rural Development and Department of Land Resources in 2015-16 was Rs. 5,961.74 crore, Rs. 1,151.76 crore, Rs. 5,772.24 crore and Rs. 33.63 crore, respectively. So, the total expenditure by the MoAFW and MoRD comes out to be 0.13 percent of GDP in 2015-16. Please check table-2.
 
However, according to the Expenditure Budget, Volume-2 of the Ministry of Finance, expenditure by the Department of Agriculture, Cooperation and Farmers Welfare, Department of Animal Husbandry, Dairying and Fisheries, Department of Rural Development and Department of Land Resources in 2015-16 was Rs. 15,296.04 crore, Rs. 1,410.12 crore, Rs. 77,369.17 crore and Rs. 1,575.55 crore, respectively. So, the gross expenditure by the MoAFW and MoRD stands at 0.74 percent of GDP in 2015-16. Please see table-1.
 

References:

Union Budget 2016-17: Mere eyewash or some concrete steps, News alert by Inclusive Media for Change dated 2 March, 2016, please click here to access 
 
Finance Accounts at a glance 2009-10 to 2016-17, Controller General of Accounts, Ministry of Finance, http://www.cga.nic.in/Accountproc.aspx  

Finance Accounts at a glance 2016-17, Controller General of Accounts, please click here to access 

Finance Accounts at a glance 2015-16, Controller General of Accounts, please click here to access 

Finance Accounts at a glance 2014-15, Controller General of Accounts, please click here to access 

Finance Accounts at a glance 2013-14, Controller General of Accounts, please click here to access 

Finance Accounts at a glance 2012-13, Controller General of Accounts, please click here to access

Finance Accounts at a glance 2011-12, Controller General of Accounts, please click here to access 
 
Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, CSO, MoSPI, please click here to access

Press Note on Provisional Estimates of Annual National Income 2016-17 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2016-17, released on 31st May, 2017, Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation (MoSPI), please click here to access
 
Annual Status of Education Report, ASER 2017: Beyond Basics (released in January, 2018), please click here and here to access

Jaitley may lend an ear to farm sector -TV Jayan, The Hindu Business Line, 18 January, 2018, please click here to access

Expect a Budget for angry Bharat -TV Jayan and Rutam Vora, The Hindu Business Line, 1 January, 2018, please click here to access

Wake up, smell the leakage -Ashok Gulati & Prerna Terway, The Indian Express, 11 April, 2016, please click here to access 

The ‘human face’ of Budget 2016-17 -CP Chandrasekhar, The Hindu, 1 March, 2016, please click here to access
 
 
Image Courtesy: Himanshu Joshi



Related Articles

 

Write Comments

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

*

Video Archives

Archives

share on Facebook
Twitter
RSS
Feedback
Read Later