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Farms and farmers the primary focus of Budget 2018

Author: Team Finapolis/Monday, February 19, 2018/Categories: Agri & Fertiliser

Farms and farmers the primary focus of Budget 2018

After losing votes in rural Gujarat during the state elections, the Bharatiya Janata Party (BJP) led Union government turned its primary focus on agriculture and the rural economy in the Budget 2018. Experts believe that while urban areas remain aligned to the Narendra Modi-led BJP government, the farmers and rural were shifting allegiance to the Congress due to the failure of the government to address farm distress. Consequently, the government came up with a slew of measures in Budget 2018 to appease the farming and rural community. Following are some of the key features:

  • MSP of crop to be fixed at one and half times of their production cost
  • Volume of institutional credit for agriculture sector to be increased from Rs 10 lakh crore in 2017-18 to Rs 11 lakh crore in 2018-19
  • Fisheries and Aqua Culture Infrastructure Fund and Animal Husbandry Infrastructure Development Fund to be set up with a corpus of Rs 10,000 crore
  • Operation Green to be launched with a budgetary outlay of Rs 500 crore to address challenges of price volatility of perishable items like tomato, onion and potato
  • Govt to upgrade 22,000 rural haats into Gramin Agricultural Markets
  • Agri-Market Infrastructure Fund to be set up with Rs 2,000 crore to provide infrastructural facilities to the Gramin Agricultural Markets
  • Govt to encourage Farmer Producer Organisations and Village Producers’ Organisation in large clusters for organic farming of medicinal and aromatic plants
  • Rs 1400 crore allocated to the ministry of food processing for 2018-19
  • Govt to launch the National Bamboo Mission with an outlay of Rs 1,290 crore to promote the ‘green gold’ or bamboo
  • Centre and states to collaborate in allocation of solar pumps to farmers for irrigation
  • Govt to extend Kisan Credit Card facility to fisheries and animal husbandry farmers
  • Govt to set up testing facilities in 42 Mega Food Parks
  • National Rural Livelihood Mission to get Rs 5750 crore in 2018-19
  • 8 crore poor women to get free LPG connections under the Ujjwala Scheme
  • 4 crore poor households to get electricity under the Saubhagya Yojana with an outlat of Rs 16,000 crore
  • 6 crore toilets to be build under the Swachh Bharat Mission and 1 crore houses to be built in rural areas by 2019

Research firm CRISIL has rated the agriculture outlook as positive stating that various infrastructure initiatives will help farmers earn better prices. “Owing to the timely payment of subsidies and payment of arrears, working capital requirement of fertiliser companies will decline sharply. Consequently, overall interest cost for these players will fall,” says CRISIL. However, the agency pointed out that the payment of the differential amount between the mandi price and the MSP to farmers is likely to push the government’s burden by over Rs 20,000 crore.

Echoing the same, India Ratings and Research has also said the step taken by the government towards upliftment of the agricultural sector is a “step towards the right directions”.

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