AGRICULTURAL REFORMS IN

UNION BUDGET 2020-21

Abhijit Kumar Sahani : ECON008

Anandarup Sengupta : ECON017
Subham Ghosh : ECON024
Suchetan Banerjee : ECON028
Amit Kumar Das: ECON035
Parshwonath Dey : ECON040
Soham Mukherjee : ECON046
 S I G N I F I C A N C E O F I N D I A N A G R I C U LT U R A L S E C T O R

Sector-wise contribution in GDP of India in Sector-wise contribution in workforce in

2018-19(%) 2018-19(%)
o With production of agriculture activity of $375.61
billion, India is 2nd largest producer of
agriculture product. Contribution of Agriculture Industry Agriculture Industry
Agriculture sector in Indian economy is much Services Services
higher than world's average (6.4%). Sector-wise contribution in Indian GDP from 2014 to 2018(%)
100
o Sector wise Indian GDP composition in 2018-19 90
80
52.4
under constant prices (2011-12) are: 70
60
53.2 53.24 53.8 54.15 Services
Industry
Agriculture (14.39%), Industry (31.46%) and 50
40
Agriculture
31.1 31.4 31.5 31.2
Services (54.15%). Agricultural Contribution in 30
20
31.46

10
GDP has been more or less similar over the last 0
16.5 15.4 15.27 15 14.39
2014-15 2015-16 2016-17 2017-18 2018-19
decade.
Sector-wise distribution of workforce in India from 2014 to
o In 2018-19, 43.21 percent of the workforce in 2018(%)
India were employed in agriculture. 100
29.55 30.1 30.59 31.01 31.45 Services
80
o Over the last decade, there is almost a ten Industry
60 24.38 24.34 24.29 24.47 24.69 Agriculture
percent decrease in the workforce employed in 40

agriculture. Despite this decline, Agriculture is 20 46.07 45.56 45.12 44.52 43.86

still the main sector of employment. 0

2014-15 2015-16 2016-17 2017-18 2018-19
 THE 16 POINT ACTION PLAN

o Encouraging states to advance implementation of model laws

Budget allocation in Agriculture and Allied sectors
already enacted by the centre. (Crore Rs)
180000
o Introducing comprehensive measures to fight water stress
160000 154775
related issues in 100 water stressed districts.
140000
o Expanding implementation of Pradhan Mantri Kisan Urja 120000
120835

Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) 100000

scheme to help move farmers’ dependence on diesel and 80000
kerosene and linked pump sets to solar energy by making 60000
63259

solar pumps available to 20 lakh farmers. 40000

o Encouraging balanced use of all kinds of fertilizers including 20000

the traditional organic and other innovative fertilizers primarily 0

2018-19 2019-20 2020-21
to prevent reckless usage of chemical fertilizers.
o Building a seamless national cold supply chain for The Budgetary expenditure on Agriculture and Allied Sector increased at a
rate of 28% in 2020-21 as compared to Budget 2019-20.
perishables including milk, fish and meat by setting up “Kisan
Rail” in partnership with Indian Railways.
o “Krishi Udaan” – a tie up with the civil aviation ministry to
provide air transport facilities to farmer.
o Measures to improve agricultural warehousing and cold storage are planned:
 Geotagging such facilities by National Bank for Agriculture and Rural
Development (NABARD).
PM Kisan Funds (Crore Rs)
 Creating more warehousing in line with Warehousing Development and
Regulatory Authority (WDRA) norms.
 Providing viability gap funding for setting up such facilities at the block
level. FY 2020-21(BE) 75000

o With special focus on the horticulture sector which has greater yield (311
FY 2019-20(RE) 54370
metric tons) than that of food grains, states focusing on “one product, one
district” will be supported.
FY 2019-20(BE) 75000
o Integrated farming systems in rain fed areas will be expanded.
o Having crossed 6000 crores, financing on Electronic Negotiable FY 2018-19(AE) 1241.31

Warehousing Receipts (e-NWR) will be integrated with Electronic

National Agricultural Market (e-NAM). FY 2018-19(RE) 20000

o Agriculture credit target for the year 2020-21 has been set at 15 lac crore – 0 10000 20000 30000 40000 50000 60000 70000 80000

an increase from previously set target of 12 lac crore.

o Expansion on Self-Help Groups (SHGs): 58 lakh SHGs have been set up A 4280.68% increase was observed from
2018-19 (AE) to 2019-20(RE).
under the Deen Dayal Antyodaya Yojana.
o A village storage scheme is proposed to be run by Self-Help Groups (SHGs).
 FERTILIZER AND FOOD SUBSIDY

Expenditure on Fertilizer subsidy Expenditure on Food Subsidy

(In thousand crores) (in lakh crores)
90
2
80
1.8
70
1.6
60 1.4

50 1.2

40 1

0.8
30
0.6
20
0.4
10
0.2
0 0
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

Expenditure on fertilizer subsidy in 2020-21, fell at a rate Expenditure on food subsidy in 2020-21, fell at a rate of 38%
of 10% from 2019-20, which would significantly increase from 2019-20, which may increase storage losses .
cost of agricultural production.
 P I T F A L L S O F B U D G E T 2 0 2 0 - 2 1 I N A G R I C U LT U R E

o The minimum support price has taken a hit. The government has
reduced allocation to Market Intervention Scheme and Price Percentage of Budgetary Expenses on Agriculture
Support Scheme(MIS-PSS) and Pradhan Mantri Annadata Aay 6

Sankarshan Abhiyan(PM-AASHA). The budget for PM-AASHA has

been reduced to a third from Rs 1500 Cr in 2019-20 to Rs 500 Cr in 5

2020-21.
4
o PM Kisan allocation was kept constant at Rs. 75000 crores.
3
o In addition to this, reduction in Mahatma Gandhi National Rural
Employment Guarantee Act (MGNREGA) funds by 13% will lead 2
to a decline in the demand for work.
o Although the Finance Minister claims to promote a “caring society” 1

there was no mention of special support to families where the heads

0
of the households have committed agriculture-related suicides. 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

o Attempts to address the severe water crisis in the nation is linked to

promoting new water conservation schemes in 100 water-stressed
districts of the nation but no substantial allocations or plans have
been made to have an integrated water use and conservation
o Decreasing FCI’s procurement operations would prevent farmers from availing market assurance
benefits to whatever small number it was reaching.
o Excess Zero Budget Natural Farming may bring 20-25% losses to farmers. Further, the promotion of 500
fish FPOs is just part of the previous year’s budget target of promoting 10000 FPOs. The government must
deliver continued support to FPOs after their initiations.
o This year, the rural development spending is Rs 1.43 lakh crore and next year, it is going to be Rs. 1.45
lakh crore; almost static. To boost the economy, the budget needed to step up infrastructure expenditures in
rural areas and also boost the rural and agricultural expenditures but none of this is happening so that the boost
expected is not likely to materialise and growth will not turn around so that the budget figures will again
suffer the same fate as in 2019-20.
o This budget lacks the vision to craft a policy and allocate suitable funds to address the myriad problems of
rural India. Rural India’s challenges have become sharply manifest in the high proportion of land that is
uncultivated, the decline in food crops, and the devastation wrought by droughts and floods. Our current crop
of elected representatives has largely become mouthpieces of the ruling party and most seem far
removed from any concern with rural issues.
Thank you