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UNION BUDGET – AGRICULTURAL SECTOR

UNION BUDGET – AGRICULTURAL SECTOR

A STUDY ON UNION BUDGET WITH SPECIAL REFERENCE TO AGRICULTURAL SECTOR

Abstract 

A planned income and expenditure will lead to savings and the growth of the family. Similarly, planned income and expenditure for the country will lead to its growth. The agricultural sector is very important for the growth of the country, which has the largest human workforce. The development of the agriculture sector depends on the facilities provided for crop insurance, crop price protection, export facilities, water facilities, protecting crops from diseases, selecting proper crops based on demand and supply, providing storage facilities, etc. The outcome of the budget depends on the allocation and use of funds. The current research study is focused on understanding the agricultural budget allocation for the years 2021–22 to 2023–24.

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AGRICULTURAL SECTOR AND BUDGET

ndia is a developing country and one of its major sectors is agriculture. For the development of the country, the agricultural sector plays a crucial role. (Antony & Jain, n.d.). The history of agriculture in India says that it is 11,000 years old, and most of the activities are still traditionally oriented. Today, India is the second-largest country in terms of arable land, with 160 million hectares and 46 types of soil. The agricultural sector accounts for 49.60 per cent of the Indian workforce. The first campaign for the improvement of agricultural crops started in the year 1947 as “Grow More Food”. The actions taken by the Government of India resulted in the increase of food grains from 51 metric tonnes in 1950- 51 to 314 metric tonnes in 2021–22. During these years, the production of food grains, horticultural crops, milk, and eggs increased. By establishing the Imperial Council of Agricultural Research in 1929 in Delhi, India started systematic research for the agriculture sector. As a part of its reforms in the agricultural sector, it was later named as Indian Council of Agricultural Research (ICAR). Around 30,000 scientists and more than 100,000 technical and support personnel are working in the ICAR.

The country has witnessed growth in agricultural activity and ranks fifth globally. The strategy in respect of food security storage and distribution resulted in a surplus and export of agricultural commodities worth US $50 billion (Pathak et al., n.d.). By 2050, the Indian population will be 1.6 billion, and food demand will reach 400 MT. As per this demand, many far reaching changes are required to be adopted and the Government of India is planning to adopt strategies like for instance increasing the farmer’s income by 200 per cent , reducing fertiliser and water use by 25 per cent and 20 per cent , respectively and increasing the use of renewable energy by 50 per cent (Pathak et al., n.d.). According to the National Crime Records Bureau (NCRB), a total of 1,39,123 farmers committed suicide between 2011 and 2020 in India. The NCRB releases data on farmer suicides every year and the numbers have been consistently going up in recent years. In 2020 alone, 10,281 farmers committed suicide. It is important to note that the issue of farmer suicides in India is complex and multifaceted, with various factors such as drought, crop failure, indebtedness, lack of access to credit and deficient Government policies contributing to the problem. Many farmers in India are also struggling with the effects of climate change, which can exacerbate the existing issues such as water scarcity and crop failure( NCRB, n.d.). The Government of India is focusing on some of the areas like increasing the agricultural productivity, providing a supportive price for the crops, increasing the storage capacities across the country, giving various platforms

for export, giving subsidies for the agricultural equipment, crop insurance schemes, research, and development, etc. (Budget for Agriculture, n.d.) The growth of farmers’ incomes will lead to the development of the agricultural sector. Many of the farmers families’ income is low and they are facing issues, such as water problems for crops, floods, storage, choosing the crops based on soil and weather, etc. (Goyal et al., 2016) Many farmers are dependent on subsidies or agricultural loans for their agricultural activities. For the betterment of this sector, Government-planned receipts and expenditures on agricultural sector is essential. The Union Budget therefore plays an important role in improving the agricultural sector.

The Union Budget includes information on various aspects of Government spending, including the allocation of funds to different departments and sectors, subsidies, grants, and transfers to states and union territories. It also provides details on tax revenue, including changes in tax rates or exemptions. The budget is important because it provides a roadmap for the Government’s plans for economic growth and development. The agricultural budget components include agricultural credit and insurance, agricultural infrastructure and irrigation, agricultural marketing, crop insurance, livestock and fisheries, agricultural research and education and rural development. The effectiveness of the budget and the growth of the agriculture sector can be assessed by looking at the welfare of the farmers.

The Union Budget of 2023-24 on agriculture is divided into two parts: the first is Agriculture, Cooperation, and Farmers’ Welfare, and the second is Agricultural Research and Education. The estimated amount on the first part is Rs 115531.79 crore and on the second part Rs 9,504 crore. Pradhan Mantri Fasal Bima Yojana, Modified Interest Subvention Scheme (MISS), distribution of pulses to States / Union Territories for Welfare Schemes, Pradhan Mantri Kisan Samman Nidhi (PM-Kisan), Pradhan Mantri Kisan Man Dhan Yojana, formation and promotion of 10,000 Farmer Producer Organizations (FPOS), Agriculture Infrastructure Fund (AIF) are the major items of expenditure of the agriculture welfare fund. Agricultural extension, agricultural engineering, Natural Resource Management Institutes including agro forestry research, crop science, horticultural science, animal science, fisheries science, Agricultural Universities and Institutions, National Agricultural Higher Education Project (EAP), ICAR Headquarters, Central Agricultural Universities, are the major expenditure areas of the agricultural research and education fund.

S TAT E M E N T O F T H E PROBLEM

The economic development of India largely depends on the agricultural sector, the service sector, and the manufacturing sector. The agricultural sector employs more people, but it contributes less than the service sector (GDP). For the holistic development of the country, planned expenditure and revenue are essential. Many of the reports and studies suggest that

the Indian agricultural workforce is still underutilised and productivity is low compared to the area utilised and produce yield. The allocation of funds towards the agriculture sector has a significant impact on the performance of this sector and the livelihood of farmers. However, there is a lack of clarity on the effectiveness of the agriculture budget and its impact on the agriculture sector. Therefore, there is a need for a comprehensive study on the agriculture budget to analyse its effectiveness, identify the challenges and issues faced by the agriculture sector, and provide recommendations to improve the allocation and utilization of funds. 

International Navodaya Chamber of Commerce

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