Maharashtra cuts capital investment in farm sector

Drought, erratic rains have pushed the sector into a negative spiral again.

Written by Sandeep A Ashar | Mumbai | Published: March 21, 2016 1:04:12 am
farming, farming sector, maharashtra gvot, fadnavis govt, agriculture sector, maharashtra farmers, mumbai news The government’s financial statement shows that the total capital expenditure on agriculture for 2016-17 is expected to be Rs 4645.59 crore, 10.07 per cent less than that of 2015-16

Public sector capital investment in Maharashtra’s crisis-laden agriculture sector is anticipated to fall by over 10 per cent in 2016-17 as compared to the current financial year. Even as a revival of the state’s distressed rural economy was the focal point of the BJP government’s 2016-17 budget speech on March 18, budget documents reveal that the government has downscaled capital investment in the sector.

The government’s financial statement, which was presented to the legislature, shows that the total capital expenditure on agriculture and allied activities for 2016-17 is expected to be Rs 4645.59 crore, which is 10.07 per cent less than the revised estimates (RE) for 2015-16.

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While the Maharashtra Economic Survey Report had last week pointed out that erratic rainfall and a persistent drought had adversely impacted the state’s crop sector, the government has decreased its capital expenditure on crop husbandry by nearly 24 per cent – from 2993.25 crore as per RE for 15-16 to Rs. 2265.26 crore in the budget estimates for 2016-17.

Further, the capital outlay for soil and water conservation activities is also expected to drop by nearly 23 per cent- from Rs 54.48 crore to Rs 42.22 crore.

Similarly, the CapEx on agricultural research and education activity is expected to witness a 16 per cent decline. Meanwhile, the Fadnavis government has increased capital outlays for dairy development (6 per cent), fisheries (1 per cent) and forestry and wildlife (31 per cent), which are seen as farm allied activities.

Finance Minister Sudhir Mungantiwar had earlier indicated that the government would push allied agricultural activities to rev up the rural economy.

Incidentally, Mungantiwar himself heads Maharashtra’s forest department. The capital investment in the sector is expected to jump from Rs 1407.96 crore (RE 15-16) to Rs 1841.75 crore in 2016-17. While Mungantiwar had dedicated the budget to the ‘baliraja’ or the farmer and announced allocations totalling Rs 25,000 crore for the farm and allied sector, the decline in capital investment in the sector has invited flak. Maharashtra’s former Chief Minister Prithviraj Chavan said, “The capital outlay kept aside for the agriculture sector is disappointing. Instead of doing mere lip service and inflating the account of what it plans to spend over agriculture by pooling in both revenue and capital side expenditures, the government ought to have infused more capital to bail out the distressed farmer.”
Even for the irrigation sector, capital expenditure on minor irrigation and flood control projects is expected to fall by 26 per cent and 24 per cent, although the government has made higher allocations of Rs 7394.35 crore for major and medium irrigation works.

About 52 per cent of Maharashtra’s population is dependent on agriculture and allied activities. Hampered by crop failure due to persistent drought conditions, the sector has witnessed negative growth the past two years. But the government’s big push in capital investment is on development on rural roads, restoration of defunct rural water supply schemes, and pushing the concept of ‘smart’ villages.

It has set aside a capital outlay of Rs 4392.94 crore for rural development programmes as compared to Rs 1677.06 crore it will end up spending under the head this year. This is nearly a 162 per cent hike.

Critics, however, pointed out that the government had originally budgeted to spend Rs 6711.05 crore for rural development programmes in 2015-16 too, which had to be revised to 25 per cent of the amount due to cut in development spend and procedural gaps.

Under rural development, Mungantiwar has announced a Rs 500 crore allocation for the new Mukhamantri Gram Sadak Yojana or CMGSY for road repairs and improvement of road connectivity in rural pockets.

Another Rs 500 crore has been set aside under the Mukhya-mantri Gramin Paye Jal Yojana or CMPJY for rejuvenation and restoration of rural water supply schemes. Mungantiwar also announced a push for transforming some of Maharashtra’s villages into ‘smart’ villages. Also under the e-reforms initiative, the plan is to install digital boards across all Gram Panchayats, he said.

For urban pockets, the CapEx on water supply and sanitation sector would however witness a sharp drop. The government plan to infuse just Rs 20.23 crore in the sector in 2016-17 as compared to the Rs 464.09 crore it spent this year. The power sector will also witness a 22 pc decline in capital investment. The capital outlay for the industries and mineral sectors in 2016-17 will be limited to Rs 14.84 crore in 2016-17, 90 per cent lower than Rs 147.50 crore the government spent this year.

CaPex on education, sports, art and culture (49 per cent), medical and public health (32 per cent), urban development (64 per cent), social security and welfare (56 per cent), and nutrition (100 per cent) will also see a drop. The other sectors where the government has projected an increase in capital expenditure include housing activities (27 per cent), road transport (10 per cent), social services (15 per cent), policing (16 per cent), welfare of backward classes (3 per cent), and public works (1 per cent) are projected to witness an increase.

The government has set aside Rs 31107.72 crore totally for capital expenditure in 2016-17, which is just about 9 per cent high than the capital expenditure in 2015-16. The budget document however shows that the percentage of capital expenditure in total expenditure has decline from 12.3 1 per cent in 2013-14 to 11.45 per cent in 2016-17.

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