Topic: Does the Budget 2020 Provide Solution to the Woe of

Agriculture?

Submitted to:

Dr. Javed Bhat

Authored by:

Chaitanya Sapkal (B042)

S.Y.BA.LLB. (Hons)

Semester IV

Section B
Abstract

The iagriculture isector ihas ihistorically ibeen ifacing isome istructural iweaknesses. iThe iway ifunds
i in ithe ibudget ihave ibeen iallocated ito ithe iagriculture isector ion idifferent iaccounts, ipresents ian
i opportunity ito iaddress istructural iissues iin iIndian iagriculture isector. iIf ithis ibudget iis
i implemented iin iletter iand ispirit, ithis iwould inot ionly iprovide ia isolution ito iagricultural idistress
i but ialso ihelp ito idouble ifarmers’ iincome iby i2022 ias ienvisioned iby ithe iModi igovernment

INTRODUCTION:

According ito iArticle i112 iof ithe iIndian iConstitution, ithe iUnion iBudget iof ia iyear, ialso ireferred
i to ias ithe iannual ifinancial istatement, iis ia istatement iof ithe iestimated ireceipts iand iexpenditure iof
i the igovernment ifor ithat iparticular iyear.
Union iBudget ikeeps ithe iaccount iof ithe igovernment's ifinances ifor ithe ifiscal iyear ithat iruns ifrom
i 1st iApril ito i31st iMarch. iUnion iBudget iis iclassified iinto iRevenue iBudget iand iCapital iBudget.
i Revenue ibudget iincludes ithe igovernment's irevenue ireceipts iand iexpenditure. iThere iare itwo
i kinds iof irevenue ireceipts i- itax iand inon-tax irevenue. iRevenue iexpenditure iis ithe iexpenditure
i incurred ion iday ito iday ifunctioning iof ithe igovernment iand ion ivarious iservices ioffered ito
i citizens. iIf irevenue iexpenditure iexceeds irevenue ireceipts, ithe igovernment iincurs ia irevenue
i deficit.

Capital iBudget iincludes icapital ireceipts iand ipayments iof ithe igovernment. iLoans ifrom ipublic,
i foreign igovernments iand iRBI iform ia imajor ipart iof ithe igovernment's icapital ireceipts. iCapital
i expenditure iis ithe iexpenditure ion idevelopment iof imachinery, iequipment, ibuilding, ihealth
i facilities, ieducation ietc. iFiscal ideficit iis iincurred iwhen ithe igovernment's itotal iexpenditure
i exceeds iits itotal irevenue.

Research iQuestion:

● What iin iUnion iBudget?

● General iobjective iand iimportance iof iunion ibudget i
● Does ithe iBudget i2020 iProvide iSolution ito ithe iWoe iof iAgriculture?

General iobjective iand iimportance iof iunion ibudget i

As imentioned iearlier, ithe iUnion iBudget’s igeneral iobjective iis ito ipresent ithe iyearly ifinancial
i record iand iplannings iof ithe igovernment iand iit ihelps ithe igovernment iin ibringing iout ifast iand
i all-inclusive ieconomic igrowth iof iour icountry. iIt ialso iempowers ithe igovernment ito icarry iout
i its iconstitutional iduties isuch ias iproviding isocial ijustice iand iequality ifor iall. iIt ihas ithe
i following ikey iobjectives iwhich ihighlight iits iimportance iof iUnion iBudget iin iIndia:
● Resource iallocation iin ithe ibest iinterest iof ithe isociety iand ithe icountry iand
i allocating iresources ioptimally ifor ipublic iwelfare.
● Uplift idowntrodden isections iof ithe isociety iby ireducing ipoverty ilevels iand
i creating iemployment.
● Creating iprogrammes ifor icitizens iso ithat ithey iget ibasic ineeds isuch ias ifood,
i shelter, ieducation iand ihealth icare.
● Union iBudget imakes isure ithat ithere iis ifair idistribution iof iincome ithrough itaxes
i and isubsidies.
● Union iBudget itakes isteps ito icontrol iinflation, ideflation iand ieconomic ifluctuations
i thus iensuring ieconomic istability iin ithe icountry.
● The iUnion iBudget ican ibring iabout ichanges iin ithe itax istructure iin ithe icountry.
● The iUnion iBudget iof iany icountry iis icrucial ias iit ihas iwidespread iimplications ion
i that icountry’s ieconomic istability iand igeneral ilife ias isuch.
 Does the Budget 2020 Provide Solution to the Woe of
i i i i i i i i i

i Agriculture?

The iway iGDP igrowth irates iin ithe ilast ifew iquarters ihave ishown idownward itrends ihas isurprised
i everyone. iThe iInternational iMonetary iFund i(IMF) ihad ipredicted ia igrowth irate iof7.3% iin
i April i2019 ifor iIndian ieconomy. iBut iby ithe iend iJune i2019, iindependent iinstitutions iacross ithe
i world istarted idoubting iabout ithose igrowth inumbers. iNow iIndian ieconomy iis iexpected ito igrow
i at i5% iin ithe icurrent ifiscal iyear. iEven ithe igovernment's iadvance iestimates iare iaround i5%.
i However, ithe igovernment ialong iwith ithe iIMF iand imany iindependent iinstitutions ihas icalled
i this itrend ito ibe ia ishort iterm itemporary iphase i(ET, i2020). iThe iso iinstitutions iare ioptimistic ithat
i Indian ieconomy iwould ibe iable ito iresume ihigh igrowth inumbers iin ithe inext ifew iquarters. iBut ia
i lot iis idependent ion ithe iefforts iand istimulus iprovided iin ithe icentral ibudget ifor ifiscal iyear i2020-
21.Indian iagriculture isector iis iundergoing ia iphase iof idistress i(Upadhyay, i2019). iBecause iof
i relatively ifalling iincome ifrom ifarm iproduces iin icomparison ito iother iprofessions iand
i businesses, ithere iis ian iurgent ineed ito iaddress ithis idistress. iAs isuggested iby imany ieconomists
i also, ithe icause iof ithe islowdown iin iIndian ieconomy ilies iin ifalling idemand iin ithe irural ieconomy
i (Upadhyay, i2019a).The iallocations iof ithe ifunds iin ithe ibudget ifor ifiscal iyear i2020-21 ifor
i erecting ia inumber iof iinfrastructures iin irural ieconomy imake iit ia idream ibudget ifor iIndian
i agriculture isector. iThis i16 ipoints ibudget ifor iagriculture iproposes ito ireform ilaws irelating ito
i agriculture, iexpansion iof icredit ifacilities ito ileft-out ifarmers, iconstruction iof iwarehouses iand
i cold istorages iin irural iareas ithrough iPPP imodel iand iself-help igroup, iestablishment iof
i transportation ifacilities, iearnings ifrom ibarren iland, ichanging icrop ipattern iand iuse iof isolar
i energy. iFor iall ithese ischemes, ithegovernment ihas iallocated i₹2.88 ilakh ifor iagriculture iand
i village idevelopment i(GoI, i2020) i

A ilarge iportion iof iagricultural iproduce i(mainly iperishable) iis iwasted ieither iin itransit ior idue ito
i lack iof iproper istorage icapacity iin irural iareas. iFor iproper iand itimely itransportation iof
i agriculture iproduces, ithe igovernment ihas iannounced ischemes isuch ias iKisan iRail iand iKrishi
i Udaan. iAlso ithe ibudget iplans ito ibuild iwarehouses iand icold istores ithrough ithe iPublic iPrivate
i Partnership i(PPP) imodel iwith ihelp iof iSelf iHelp iGroups iin ievery ivillage/block ito iaddress ithe
i bottleneck. iGovernment ihas iasked iNABARD ito igeotag iall ithe iexisting iwarehouses iand icold
i stores iin ithe icountry ito ifigure iout iwhich iareas ilack ithese ifacilities. iThe igovernment iwill
i provide iviability igap ifunds ito iestablish ithese. iHowever ithe iavailability iof iskilled ilabor ito
i manage ithese ifacilities iis ialso ia iproblem. iGovernment ican istrategically iuse iSkill iIndia ito iskill
i rural iyouth ito iprovide iskilled ilabor ito ithese ifacilities. iThis iwill imake ithese ifacilities iself-
sustaining. iThis iwill iincrease iemployment iopportunities iin ithe irural ieconomy ileading ito ilower
i migration ito iurban icenters iwhich iwill ihelp iat ileast icontaining ithe iincreasing ipressure ion icivic
i systems iin iurban icenters. iIf ithis iwastage iof iagricultural iproduce iis iminimized, ithe iincome iof
i farmers iwill iincrease iautomatically. iIn irural iareas, itimely iavailability iof ielectricity iis iscarce.
i Considering ithe isupply ibottleneck iin ielectricity igeneration iand idistribution, ithe igovernment
i proposes iproliferation iof iagriculture iwith isolar ipower iby ihelping i20 ilakh ifarmers iinstalling
i solar ipumps iunder ithe iPrime iMinister iKisan iEnergy iSecurity iand iUpliftment iCampaign. iThis
i would inot ionly ibring idown ifarmers’ idependency ion iformal isources iof ielectricity ifor iirrigation
i but ialso ibring idown ioverall icost ileading ito iincrease iin iincome. iEven iafter ithe iintroduction iof
i the iKisan iCredit iCard ifacility ito iprovide iaccess ito ibank ilending ito ifarmers, ia ilarge inumber iof
i small iand imarginal ifarmers istill idon’t ihave iaccess ito ia iformal ilending isystem. iGovernment iin
i this ibudget ihas iset ia ilending itarget iof iRs i15 ilakh icrores ito ifarmers. iIt ialso iproposes ito ilink iall
i the ibeneficiaries iof iPrime iMinister iKisan iSamman iNidhito iKCC. iThis iwill ihelp ito iprovide
i bridge ifinance iat ia ilower irate iof iinterest ito ithese ifarmers ileading ito ibetter ifinancial iconditions.

As iper ithe ibudget iplan i‘One iDistrict iOne iFruit’ ischeme iwill ibe ipromoted iby ithe igovernment.
i The iimplementation iof ithis ischeme iwill inot ionly iincrease ithe ifruit iproduction ibut ialso iresult iin
i improvement iin ithe iquality ias iresult iof ieconomies iof iscale. iAlso iit iwould ibe ieasier ito imarket
i and iprovide iinfrastructure iwith iproper ipolicy isupport ifrom ithe igovernments. iEfficient iuse iof
i the isystem iwill ilead ito ian iincrease iinto iincome ifor ithe ifarmers. iTo ipromote idairy, ifishery iand
i animal ihusbandry, ithe igovernment ihas iset ia itarget ito iincrease ifish iproduction iby200 imillion
i tones iand i100% iincrease iin imilk iproduction. iThis iwill iaugment ithe iincome iof ifarmers.
i Government ihas iproposed ito ireform ilaws irelating ito iland ilease iand imarketing iwill ihelp ithe
i farmers iin ithe ilong irun. iHowever iany ireform iin icontract ifarming iis istill icontested. iThe
i government ihas iallocated i₹6000 icrores ifor iFinancing iof iNegotiable iWarehousing iReceipt
i along iwith ilinking ie-Negotiable iWarehousing iReceipt i(e-NWR) iand ie-Nation iAgriculture
i Market i(e-NAM). iThis iwill ifacilitate iinter-state itrade iof iagriculture iproduces ileading ito ibetter
i pricing iwhich iwill ieventually ienhance ifarmers’ iincome.

Conclusion:

i Economists ihave istated ithat ithe iroot icause iof ithe icurrent iproblems iin iIndian ieconomy ilies
i infalling idemand iin irural ieconomy iwhich ihas ibeen icaused iby islowdown iin irural ieconomy idue
i to idemonetization iand iconfusion iaround iGST iregime. iAlso ithe iagriculture isector ihas
i historically ibeen ifacing isome istructural iweaknesses. iThe iway ifunds iin ithe ibudget ihave ibeen
i allocated ito ithe iagriculture isector ion idifferent iaccounts, ipresents ian iopportunity ito iadd
i structural iissues iin iIndian iagriculture isector. iIf ithis ibudget iis iimplemented iin iletter iand ispirit,
i this iwould inot ionly iprovide a solution to agricultural distress but also help to double farmers’
income by 2022 as envisioned by the Modi government

Reference:

https://www.financialexpress.com/what-is/union-budget-of-india-meaning/1618944/

https://www.indiabudget.gov.in/

https://economictimes.indiatimes.com/news/economy/policy/all-you-need-to-know-about-
the-union-budget/what-is-union-budget/slideshow/73831928.cms