Finance Minister, Nirmala Sitharaman needs to be complimented for taking a bold step to reorient support in the agri-food-rural space from doles towards development. Assembly elections are slated for nine states this year and the Lok Sabha elections will be held in about a year’s time. The FM has, however, resisted the temptation to announce freebies. Instead, she has proposed a growth oriented, asset creating and inclusive budget to develop better infrastructure and create more productive jobs.
She has proposed a drastic cut in food and fertiliser subsidies, and also reduced the expenditure on MGNREGA in 2023-24 compared to the revised estimates (RE) of 2022-23. Together, these cuts amount to roughly Rs 1.7 lakh crore . But does this mean that the FM has wielded an axe on agriculture and rural spending? The simple answer is “no”, because the savings from these doles have been redirected towards more productive expenditures on railways, roads, rural housing and Jal Shakti — this will help rural India through its multiplier effects.
Take the case of Railways. Its capital outlay is up 48.6 per cent at Rs 2.41 lakh crore in 2023-24, from the revised estimate of Rs 1.62 lakh crore in 2022-23. Road transport and highways has a capital outlay of Rs 2.70 lakh crore in 2023-24 against Rs 2.17 lakh crore in 2022-23 (RE). This clearly reveals the government’s focus on Gati Shakti to reduce the cost of logistics. Logistics and supply chain costs account for around 12 per cent of the GDP in India compared to the global average of 8 per cent. Improving connectivity through rail, road, air and waterways will surely improve the competitiveness of Indian products, including that of agricultural produce in global markets and also help in taming inflation. This is a well thought out strategy and will pay the country handsomely in the years to come.
Another critical asset creating expenditure is on the PM Awas Yojana (Gramin). The overall outlay for PM Awas Yojana has increased to Rs 54,487 crore, up from Rs 20,000 crore that was budgeted in the 2022-23 budget — a net increase of 172.4 per cent. However, if one compares the 2023-24 PMAY-G outlay to the RE of 2022-23 (Rs 48,422 crore), which was already way above the BE of 2022-23 (Rs 20,000 crore), the hike in 2023-24 seems to be only 12.5 per cent. The scheme was launched in 2016 to provide housing to all but it also ensures permanent asset creation for rural households and provides dignity of life while creating more jobs in rural India. This marks a big step forward in reorienting subsidies towards rural infrastructure development.
An increase of 27.3 per cent is also seen in the Jal Jeevan Mission (JJM), from Rs 55,000 crore in RE of 2022-23 to Rs 70,000 crore for 2023-24. This is primarily to supply safe drinking water through taps, mostly in rural areas. This will not only help contain water borne diseases but also save time and energy of women who have to walk long distances to fetch water.
The Pradhan Mantri Kaushal Vikas Yojana (4.0) aims to empower the “Amrit Peedhi” and provide skills to lakhs of youth within the next three years. It envisages on-job training, forging partnerships with industry and aligning courses with the needs of industry. The outlay for the purpose has gone up by 85 per cent — from Rs 1,902 crore (RE) in 2022-23 to Rs 3,517 crore (BE) in 2023-24. The Pradhan Mantri Kaushal Vikas Yojana also targets to cover new age courses for industry like coding, AI, robotics, mechatronics and 3D printing. The FM has also announced that to skill the youth for international opportunities, 30 Skill India International Centres will be set up across different states. This is a commendable step.
To promote innovations and technologies in the agriculture sector, the FM has announced an Agri-Focused Accelerator Fund. She also talked of creating digital public infrastructure for agriculture as an open-source, open-standard and interoperable public good. This will enable inclusive and farmer-centric solutions by providing information services for crop planning and health and improving access to farm inputs, credit, and insurance. Farmers will be able to arrive at better crop estimates and get market intelligence. These are steps in the right direction but we have to see how much funds are allocated under these schemes. A positive step towards promoting high value horticultural crops was announced under the Atmanirbhar Clean Plant Programme that aims to boost the availability of disease-free, quality planting material. An outlay of Rs 2,200 crore has been allocated for the programme. However, the creation of storage facilities and value chain infrastructure remains a challenge in rural areas. Finally, there is a need to double up investment in agriculture research for creating more productive, climate resilient and competitive agriculture in India. The FM has shied away from that.
Gulati is distinguished professor and Juneja a fellow at ICRIER. Views are personal
