Thursday, July 29, 2021
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Farmers stand to benefit from Budget

The budget presented by Finance minister has given a relief to affordable housing as it is a priority for this government and it was expected to get infrastructure status. Housing sector has been accorded infrastructure status by providing 100 per cent exemption on profits. It is encouraging to see that fiscal discipline has been given priority in the budget. One feels that the amnesty scheme on black money is not good enough, and would not encourage people to come forward to declare their ill-gotten wealth. The tax projections are realistic but the divestment target looks ambitious as the government has typically struggled to achieve this. The budget proposal to launch a new health protection scheme is welcome as it will ensure penetration of health insurance and promote financial inclusion. The proposal for additional Rs 30,000 health cover for cover for senior citizens is a good sign as it will help reduce the burden of healthcare expenditure for the aged. Services tax was left unchanged and long-term capital gains tax fears were left misplaced.

The introduction of a Smart Aadhaar card facility with health details of senior citizens and the reduction of income tax in some categories are also bound to be hailed. Finance Minister Arun Jaitely’s Budget has  broadly focused on 10 themes — the farming sector, the rural population, the youth, the poor and underprivileged health care, infrastructure, the financial sector for stronger institutions, speedy accountability, public services, prudent fiscal management and tax administration for the honest. Agriculture in India is the core sector for food security, nutritional security, and sustainable development and for poverty alleviation. Dealing with climate change and its potential impact also requires a budget to safeguard farmers. Given the drought and delinquent rainfall affecting farmers, the government’s step to create 5 lakh more farm ponds that will work as a drought-proofing measure in gram panchayats is welcome, but everything depends on how well the schemes are executed on the ground.  The announcement of increasing farm credit to 10 lakh crore may not help much the small and marginalised farmers, who are outside the banking network as around 60% of the farmers are outside the banking system. The boost to the rural economy by allocating 10 lakh crores to farm credit with 60 days interest waiver, highest ever allocation for MGNREGA, regulating political funding, reduction in personal income tax for the salaried and middle class giving needed fillip to job opportunities etc. will silence all those who have been tirelessly describing Modi government as ‘ suit boot ki sarkar ‘.

Focus on rural, social sector spending and roads and highways are along expected lines and positive as the pilot project for job creation in rural areas has been allocated funds worth Rs 48 ,000 crore to enhance asset creation and job opportunities in rural hinterlands. Special focus to put on the digitization will certainly prove to be an effective tool in shaping the future of state economy. Farmer’s income directly depends on the yields from their farm lands. Yields depend on natural phenomenon such as ideal climatic conditions, including quality of fertile lands. Only good crop yields can improve GDP and have no impact whatsoever on the budget proposals. Doubling farmers’ income is an inspiring idea. Given the fact that 56% of population is engaged in agriculture and mounting farmer suicide due to indebtedness, agriculture distress has led government to take certain significant steps to double the farmer’s income by 2020. To measure income levels, innovative big data techniques should be leveraged.

(The views expressed by the author in the article are his/her own.)

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