Budget aims to tax the rich to give farmers some relief

arun-jaitelt-financeContrary to the Economic Survey which warned of an impending economic gloom, Finance Minister Arun Jaitley’s budget aims at dismissing that very gloom that was threatening to engulf the rural economy.

The government will now infuse nearly Rs 1,38,000 crore in the rural sector to improve the incomes in rural areas. The agriculture and the rural sector would have gone into serious stress if the Finance Minister would have ignored it any longer. Rural income was at its lowest in over 5 decades followed by two years of lack of rain.

The budget has attempted to specifically target agriculture, irrigation, village development, rural municipalities and farmers.

Jaitley said that the government intends to provide irrigation to 28.5 lakh hectares of farmland through the Prime Minister Krishi Sinchai Yojna in mission mode. In order to give this scheme continuity, an irrigation fund under NABARD will be created with an initial corpus of Rs 20000 cr. The government will also fast track 89 languishing irrigation projects covering 80.6 lakh hectares. It seeks to broaden the base of the Soil Health Card scheme by targeting nearly 14 crore farming families.

The budget allocates Rs 15,000 crore for interest subvention to reduce the burden of loan repayment on farmers. By doing this the government seeks to enhance credit off take by farmers to Rs 9 lakh crore.

The budget also commits itself to creating a unified Agricultural Marketing e-Platform, which will link up the wholesale mandis to one common platform. This is likely to enhance reach and access to markets for the farmers. Relief to the farmer will also be guaranteed under the Prime Ministers Fasal Bima Yojna which will seek to provide insurance to farmers in case of crop loss due to various reasons.

The government looks to tread deeper into rural areas in an attempt to infuse liquidity into its institutions. The Govt will provide grants in aid of Rs 2.87 lakh crore to all gram panchayats and municipalities. This, FM Jaitley said, will amount over Rs 80 lakh for each gram panchayat and about Rs 21 crore for every municipality. This is a jump of 228% compared to the previous 5 years, announced Jaitley. Through its Shyama Prasad Mukharjee Rurban Mission, the government hopes to create 300 ‘rurban’ clusters and has promised to electrify every village by 1st May 2018.

All these steps are likely to improve wages and create employment in the farm sector, besides empowering farmers to produce more and generate higher incomes.