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Public expenditure on agriculture in India declined considerably in past decade: Experts

The study conducted by the Bengaluru-based Foundation for Agrarian Studies also found that while the share of the Centre in total expenditure on agriculture went down, there was an increase in the share of expenditure by the state governments. 

Written by Aksheev Thakur | Bengaluru |
March 20, 2022 3:58:58 pm
Maharashtra, rabi crops, hailstorm affect rabi crops, Maharashtra latest news, Maharashtra farming, Maharashtra rabi crops, indian expressAnalysis of the budgets of the Union and state governments from 2011-12 to 2018-19 shows that government expenditure on agriculture as a share of gross value added in agriculture declined considerably in the past decade, said the researchers. (Representational)

Public expenditure on agriculture in India has declined considerably in the past decade, said the authors of a research paper conducted by the Bengaluru-based Foundation for Agrarian Studies (FAS) during an online panel discussion held on March 19.

Notably, the research project was supported by the Rosa-Luxemburg-Stiftung and led by Professor R Ramakumar (Tata Institute of Social Sciences) with research scholars Raya Das (Jawaharlal Nehru University) and Abhinav Surya (Centre for Development Studies) being the co-investigators.

Analysis of the budgets of the Union and state governments from 2011-12 to 2018-19 shows that government expenditure on agriculture as a share of gross value added in agriculture declined considerably in the past decade, said the researchers.

The study also found that while the share of the Centre in total expenditure on agriculture went down, there was an increase in the share of expenditure by the state governments.

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“Within sub-sectors, there was a sharp decline in government expenditure on crop cultivation and food production, which was accompanied by increased government spending towards agricultural financial institutions through schemes for credit disbursement and interest subsidies.

The overall government expenditure on irrigation as a share of total public expenditure has also declined over the last decade. In sum, public expenditure in agriculture has moved away from support for direct production towards income support and credit-based assistance,” the study findings read.

The experts pointed out that India’s agricultural growth was historically dependent on the investments made by the public sector. The green revolution and increases in overall agricultural production and productivity were made possible by State support in terms of technology, prices, credit, and marketing.

However, there has been a withdrawal of the State from these spheres after the 1990s. The study also shows that despite talking increasingly about sustainable farming, in reality, governments’ spending on sustainable agriculture has at best remained stagnant.

Speaking about the need to increase public spending in Indian agriculture, Ramakumar elaborated on direct cash transfers being an escape route for the Union government.

He pointed out that India’s public expenditure to GDP ratio is one of the lowest in the world.

“While it is 33 per cent in the USA, 43 per cent in Italy, it is just 15 per cent in India. This is also a reflection of the low expenditure on not just agriculture, but also education, health etc. For example, India spends just 1.5 per cent of its GDP on health and a similarly low number on education. Other developed countries, however, spend close to 10 per cent,” Ramakumar said.

“The fiscal consolidation measures of the Central Government led to rising anger and unrest among the rural population. Given this scenario, the government was not left with any other options than to provide direct cash transfers. The overall public expenditure is unacceptably low in India compared to the developed countries and even some developing countries,” he said.

The Centre has transferred the burden of expenditure in general, and particularly in agriculture, to the states. This shift is an attack on the federal values enshrined in the Constitution,” he added.

Vijoo Krishnan, the joint secretary of the All India Kisan Sabha, talked about the implications of reducing government spending on the population dependent on farming. The panel was also joined by S Niyati, Associate Scientist, International Rice Research Institute, who spoke on the role of women as farmers.

The discussion focused on the decline of government spending in agriculture and its consequences on the farming population, especially on small farmers and women in agriculture.

Krishnan also pointed out that farmers’ and agricultural workers’ organisations were at the forefront in condemning the new agricultural policies from as early as the 1990s.

“The decline in agricultural expenditure will lead to pauperisation of small and marginal farmers. As the government withdrew from public spending in agriculture, farmers are increasingly driven into debt and suicide,” he said.

Krishnan added that while the Narendra Modi-led government came into power with claims of doubling farmers’ incomes and implementing the recommendations of the MS Swaminathan committee report, it has failed to fulfil any of these promises.

Referring to the farm laws and the struggle of the farmers’ movement in getting them repealed, he concluded that farmers are not at the centre of any of the policies of the present government.

Niyati touched upon the effect of policies on women in agriculture. She spoke about how women’s work is undercounted even though they are increasingly taking up roles of cultivators and wage workers in rural India.

“Even as the amount of work that they are involved in is increasing, women lack access to productive forces. As a result, women farmers lose out on any assistance that governments provide and as this dwindles, the effects are worsened further in the current context.

The Central Government’s spending on schemes such as MGNREGA and on agricultural research and extension is crucial in increasing incomes of rural women,” she added.

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