Why Arun Jaitley seems to be falling short of expectations on farm sector

Finance Minister Arun Jaitley arrives in Parliament on Thursday to present the Union Budget 2018. (Express Photo/Ravish Tiwari)

Finance Minister Arun Jaitley has probably delivered the first ever ‘Hinglish budget’ by any Finance Minister, interspersed his speech with Hindi in all the proposals dealing with agriculture and rural areas. The intention is obviously to reach people who are not just investors and businessmen. He has promised implementation of the Swaminathan formula of setting minimum support prices for crops to give farmers 50% return over production cost from the coming kharif season. But how this will be done is not clear as yet. In fact, Prime Minister Narendra Modi had made this a virtual election promise in the 2014 Lok Sabha campaign.

Considering the agrarian distress in the country, Jaitley’s Budget was expected to be give enough pro-rural signals. But the signalling does not seem to have been backed by concrete proposals. There was expectation of the budget extending the MP government’s Bhavantar Bhugtan Yojana scheme on a nationwide scale, which would involve the government paying the price difference between the MSP and ruling market prices. There seems to be no announcement of that, probably because of the financial implications.

The favourable tax treatment for farmer producer companies is a good move. Though details are awaited, hopefully these entities will be exempted from tax. If income of farmers is exempt, the same should extend to farmer-owned organisations as well.

The markets should be relieved that there are no new big social spending scheme announcements so far, which is remarkable in a pre-election year Budget. Clearly, it looks the deficit targets will be met.