Mar , 2022, Volume : 3 Article : 3

Union Budget 2022: Agriculture Sector

Author : Suman Sen

Highlights:

ü  Rs 1.32 lakh crore for departments under the Ministry of Agricultural and Farmers Welfare.

ü  Government to pay Rs 2.37 lakh crore for wheat and paddy procurement under MSP.

ü  ‘Kisan Drones’ for crop evaluation, digitization of land records, and spraying of pesticides and nutrients.

ü  Chemical-free natural farming to be promoted, initially in 5-km wide corridors along the river Ganga to start with.

ü  Allocation of Rs 45,000 crores for scientific organic farming in NE states.

ü  SC and ST farmers willing to take up agroforestry will be given financial assistance.

ü  NABARD fund to finance agri start-ups and rural enterprises.

ü  PPP for delivering digital and hi-tech services to farmers.

ü  Emphasis on strengthening and expanding the FPO network to enhance productivity and incomes to the farmers.

ü  With a focus on carbon neutral economy, 5-7% of biomass pellets will be co-fired in thermal power plants, reducing annual CO2 emissions of 38 MMT.

ü  Supports for post-harvest value addition, enhancing domestic consumption and branding millet products nationally and internationally.

ü  Ken-Betwa Link project to be implemented.

ü  Draft DPR for 5 river linking projects have been finalized.

ü  Indian Railways to provide logistics services for small farmers, and small and medium enterprises.

ü  Launch of Anytime-Anywhere Post Office Savings scheme.

ü  A streamlined plan to expand domestic oilseed production and to reduce imports will be implemented.

ü  Revision in syllabi of agricultural universities.

Budget allocations

· Budget allocated to the Ministry of Agricultural and Farmers Welfare (MoA&FW) is Rs 1,32,514 crore in 2022-23 which is 4.5% higher from Rs 1,26,808 crore in 2021-22 (revised estimate; RE).

·  A provision of Rs 8,513.62 crore (same as in 2021-22) has been made for the Department of Agricultural Research and Education (DARE) under the MoA&FW. The largest share (Rs 5,877.06 crore) in this estimated amount is to the Indian Council of Agricultural Research (ICAR).

· The allocation for the Central Agricultural Universities for expenditure on regional education, research and extension, etc has been Rs 599.45 crore in 2022-23 against Rs 562.95 crore in 2021-22.

· A provision of Rs 719.28 crore has been made for Crop Sciences (Crop Science, Horticultural Science, and National Agricultural Science Fund) in 2022-23 as against Rs 840 crore (RE) in 2021-22.

· Allocation of Rs 455.46 crore has been made for agricultural education in the general budget against Rs 553 crore (RE) in 2021-22.

· Rs 343.30 crore has been allocated for Animal Sciences (Animal Science and Fisheries Science) in the next financial year (RE for 2021-22 was Rs 400 crore).

· Expenditure on the Management of Natural Resources (Natural Resource Management Institutes including Agro Forestry Research and Climate Resilient Agriculture Initiative) has been estimated at Rs 185.77 crore (RE for 2021-22 was Rs 215 crore).

· Allocation for Rashtriya Krishi Vikas Yojana (RKVY) (earlier under Green Revolution scheme) is Rs 10,433 crore in 2022-23 against Rs 2,000 crore in 2021-22 (RE). Previous programmes such as PM Krishi Sinchai Yojana (PMKSY), Paramparagat Krishi Vikas Yojana (PKVY), Sub Mission on Agricultural Mechanization including Management of Crop Residue, etc. have been merged into RKVY.

· Krishionnati Yojana, a separate category in this Budget has a total allocation of Rs 7,183 crore and includes important programmes such as Food and Nutrition Security (Rs 1395 crore), Edible Oil-Oil Palm (Rs 900 crore), Edible Oil-Oilseeds (Rs 600 crore), Organic Value Chain Development for North East Region (Rs 198 crore), Integrated Development of Horticulture (Rs 1900 crore), Seed and Planting Material (Rs 305 crore), Agriculture Extension (Rs 1000 crore), Digital Agriculture (Rs 60 crore), Agriculture Census and Statistics (Rs 325 crore), Agricultural Marketing (Rs 500 crore).

· Allocation of Rs 60 crore towards Digital Agriculture to promote use of artificial intelligence, machine learning, block chain technology, etc in promoting agricultural information systems.

· Allocation of Rs 500 crore towards Agriculture Infrastructure Fund (AIF).

· Food subsidy: Rs 2,06,831 crore in 2022-23, a 27.8% decrease over the RE of 2021-22.

· Fertilizer subsidy: Rs 1,05,222 crore in 2022-23, a 24.9% decrease over the RE of 2021-22.

· Pradhan Mantri Fasal Bima Yojana: Rs 15,500 crore in 2022-23, a 3.1% decrease over the RE of 2021-22.

· An allocation of Rs 500 crore has been made for Formation and Promotion of 10,000 FPOs. The Ministry of Co-operation has been allocated a fund of Rs 900 crore.

· Agricultural diversification and food processing: Department of Fisheries (Rs 2,119 crore), Department of Animal Husbandry and Dairying (Rs 3,919 crore), and Ministry of Food Processing (Rs 2,942 crore).

· Budgetary allocation for PM-KISAN has seen little increase from Rs 67,500 in 2021-22 (RE) to Rs 68,000 in 2022-23.

· Allocation for Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has been Rs 73,000 crore in 2022-23, a decrease of 25.5% over the RE of 2021-22.

Key policy announcements

·       Government’s procurement of wheat and paddy under the minimum support price (MSP) during 2021-22 will cover 1208 lakh metric tonnes. Rs 2.37 lakh crore will be the direct payment of MSP benefiting 163 lakh farmers.

·         Provision of Rs 45,000 crores for promotion of scientific organic farming in North-eastern states.

·     Proposal for linking of bank accounts and post office accounts through the Anytime-Anywhere Post Office Savings scheme for financial inclusion of farmers and senior citizens.

·       Government to bring in policies and required legislative changes to promote agroforestry and private forestry. Farmers belonging to Scheduled Castes and Scheduled Tribes willing to take up agroforestry will get financial support.

·       Government to facilitate a fund with blended capital raised under the co-investment model through NABARD to finance start-ups for agriculture and rural enterprises. Activities of these start-ups will include, inter alia support for FPOs, machinery for farmers on rental basis at farm level and technology including IT based support.

·     Launch of Aspirational Districts Program to provide better quality of life to citizens in backward areas and also to support small farmers in these areas.

·      Use of ‘Kisan Drones’ for crop assessment, digitization of land records, spraying of pesticides and nutrients would be promoted as part of the inclusive development.

·       A scheme in Public Private Partnership (PPP) mode will be launched for delivering digital and hi-tech services to farmers with involvement of public sector research and extension institutions along with private agri-tech players and stakeholders of agri value chains.

·       Government will provide comprehensive package with participation of State Governments for the farmers to adopt suitable varieties of fruits and vegetable and to use of appropriate production and harvesting technology.

·      Chemical-free natural farming to be promoted throughout the country starting with a land in a 5-km corridor along the river Ganga.

·     Focus on transition to a carbon neutral economy through use of biomass pellets in thermal power plants, thereby providing an additional source of income to the farmers. 5-7% of biomass pellets will be co-fired in thermal power plants resulting in CO2 savings of 38 metric million tonnes (MMT) annually.

·     As 2023 has been announced as “International Year of Millets”, supports will be provided for post-harvest value addition, enhancing domestic consumption and branding millet products nationally and internationally.

·      Implementation of the Ken-Betwa linking projects at an estimated cost of 44,605 crore will be taken up. This is aimed at providing irrigation benefits to 9.0 lakh hectares of farm lands, and drinking water supply to 62 lakh people. An allocation of Rs 1400 crore in 2022-23 has been made for this project.

·    Draft Detailed Project Report (DPR) for 5 river linking projects, namely Damanganga–Pinjal, Par–Tapi–Narmada, Godavari–Krishna, Krishna–Pennar, Pennar–Cauvery have been finalized. Once the consensuses reach among the beneficiary states, the centre will provide support for their implementation.

·  PM Gati Shakti Scheme will support farmers with better connectivity to the market places. Indian Railways will develop new products and efficient logistics services for small farmers and small and medium enterprises.

· With an objective of optimally utilizing available infrastructure and enhancing competitiveness of exports, centres of manufacturing clusters to be introduced in place of Special Economic Zones which could benefit several agriculture sector companies who are evaluating setting up new manufacturing sites.

· To reduce the dependence on imports of edible oils, a rationalized and comprehensive scheme to increase domestic production of oilseeds will be implemented.

·   States will be encouraged to revise syllabi of agricultural universities to meet the needs of natural, zero-budget and organic farming, modern-day agriculture, value addition and management.

· Reduction in Alternate Minimum Tax (AMT) for co-operative societies from 18.5% to 15% at par with companies to create a level playing field for organized farming.

Reduction of surcharge from 12% to 7% for co-operative societies with income more than Rs 1 crore and up to Rs 10 crore.

 

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