'Insignificant' hike in rural budget: Farmers' hope for better procurement dashed

By Bharat Dogra* 
The Union budget 2023-24 has failed to live up to the real needs and hopes of people living in villages, or to prioritize rural areas. A clear decline can be seen in the proportion of the budget going to rural development, agriculture and allied sectors.
As the Centre for Budget and Governance Accountability has pointed out in its analysis of the Union budget 2023-24 titled ‘Walking the Tightrope’, the budget allocation for the Department of Rural Development, when seen as a percentage of the union budget, is the lowest in 2023-24 during the last 4 years. 

While this percentage was 5.6 in 2020-21 and 4.2 next year (in terms of actual expenditure data) , this was 4.3% in the Revised Estimate (RE) of 2022-23 and is only 3.5% in the Budget Estimate (BE) of 2023-24. If we see as a percentage of GNP, the figures for these years are respectively 0.99%, 0.68%, 0.66% and finally 0.52% in the latest budget. This again reflects a clear declining trend.
Within the rural development department budget, the decline in the NREGA budget this year has been the most disappointing.
These allocations do not include agricultural and allied sectors. In order to get the allocation for agriculture and allied sectors, we need to add the allocations of four departments -- the Department of Agriculture and Farmers’ Welfare, the Department of Agricultural Research and Education, the Department of Fisheries and the Department of Animal Husbandry and Dairying.
When we do this addition, the total allocation for agriculture and allied sectors is seen to decline as a percentage of union budget from 3.91 in 2019-20 (actual expenditure) to 2.92 in 2023-24 ( B.E.), the intervening figures being 3.40% in 2020-21 and 3.34% in 2021-22( actual expenditure), 3.51% (BE) and 2.95% (RE) in 2022-23). 

When seen as a percentage of GNP, these figures again reflect a clear overall declining trend—from 0.52% in 2019-20 and 0.60% in 2020-21 (actual expenditure) to 0.45% in 2022-23 (Revised Estimate) and 0.44% in 2023-24.
What is more when we disaggregate the various allocations made under the Department of Agriculture and Farmers’ Welfare, we find that out of the total of INR 115,532 crore worth of allocation, over 50% is for PM Kisan Nidhi (INR 60,000 crore) which is in the form of cash transfers to individual farmers. 

Another big chunk of INR 23,000 crore is meant for ‘interest subvention for providing short-term credit to farmers’. This leaves a very low net figure of INR 32,252 crore for real development tasks. What is more this net amount is less than the BE of the previous year INR 36,500 crore). It is no less disappointing that last year there was a decline in this net allocation to INR 28,255 crore, a cut of INR 8,245 crore.
If we look at the entire agriculture and allied sector (comprising four departments, as pointed out above), then the overall cut last year (2022-23) from BE to RE was about Rs. 15,000 crore, from INR 138,551 crore to INR 123,643 crore).
What is more, the overall trend has been moving in the direction towards corporate control over farming. This is reflected in complaints of corporates gaining at the expense of farmers in farming insurance schemes. More recently this is also reflected in the emphasis on GM crops and palm oil as the main stated source of increasing edible oils availability.

Budget has been fair neither to farmers nor to the poorest sections of villages including the landless

The budget availability in the Department of Food and Public Distribution is of importance for crucial for procuring food crops from farmers at a fair price and make food grains available to consumers at a lower price. The actual expenditure of this department was INR 304,360 crore in 2021-22, while the RE in 2022-23 was INR 296,303 crore. The allocation for 2023-24 is INR 205,513 crore. 

Without a significant hike in this budget, it will not be possible to fulfill the aspirations of farmers for better and more procurement, or of weaker section consumers for adequate and reliable supply of subsidized food. Hence both farmers and landless households in rural areas are adversely affected by this reduced allocation.
The landless labor and migrant labor households are the poorest in rural areas and have suffered much in recent times. The allocations of the Ministry for Labor and Employment are important for them. These have shown a clear declining trend. The actual expenditure of this ministry was INR 24033 crore in 2021-22. Next year the allocation for this ministry was reduced to INR 16893 crore in the original allocation and while preparing revised estimate was reduced further to INR 16117 crore.

In the 2023-24 budget, this has been decreased even more to INR 13,221 crore. This together with the reduced allocation of NREGA budget from 89,400 crore ( RE of 2022-23) to INR 60,000 crore in 2023-24, a huge and arbitrary reduction of INR 29,400 crore with nothing to explain it, no rationale at all, is very disappointing from the point of view of the weakest sections.
Clearly the budget has been fair neither to farmers nor to the poorest sections of villages including the landless. The weakest sections can gain some satisfaction from the increased allocations for housing and drinking water needs, but here too they have to contend with several flaws at implementation level.
In order to avoid increasing problems for farmers and rural workers, the government will have to think in terms of significant upward revision of allocations at the time of preparing revised estimates later in the year.
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*Honorary convener, Campaign to Save Earth Now. His recent books include 'India’s Quest for Sustainable Farming' and ‘Healthy Food, Man over Machine and A Day in 2071’