Agriculture is of paramount importance to India, given the need to feed the country’s growing population of over 1.2 billion. Not just that, nearly half of India’s population depends on agriculture for employment. This explains the Government’s resolve to sustain 4 per cent growth in agriculture through a two-pronged approach – increasing farm productivity and minimising transportation and distribution losses.
The Budget has spelt out various initiatives to increase farm productivity. First is the initiation of ‘Pradhan Mantri Krishi SinchayeeYojana’ with allocation of ₹1,000 crore this fiscal. This aims to make agriculture resilient to the vagaries of weather through assured irrigation, given that a substantial portion of the country’s cultivable land is still rain-fed. This proposal, if implemented, should benefit manufacturers of irrigation systems such as Jain Irrigation.
Second, exceptional price spikes in fruits and vegetables have often sparked off bouts of unexpected inflation. To insulate farmers and consumers from violent fluctuations in prices of agricultural commodities, the Government has allocated ₹500 crore towards setting up of a price stabilisation fund. It also plans to move towards a common market for agricultural commodities with farmers empowered with the technology to access live national prices. Apart from curbing speculation, this could lead to the orderly development of exchange-traded commodities markets, which are today mired in crisis.
Third, a new policy for urea is also being formulated. Given the current fertiliser pricing anomaly – wherein urea price has been kept unchanged for several years and is at a substantial discount to other complex fertilisers, excessive use of urea has led to soil nutrient imbalance. A gradual increase in urea prices will not only help fertiliser makers (urea and complex) such as Chambal Fertilisers, Coromandel International and GSFC but will also better the long-term prospects of farmers by increasing productivity.
While improving efficiency is important, that alone may not help meet the country’s growing food requirement. Significant portion of the country’s agricultural produce is lost due to lack of suitable warehousing and storage infrastructure. Taking cognisance of this, the Government has allocated ₹5,000 crore to set up a warehouse infrastructure fund to reduce transportation and distribution wastage.
To ensure soil health, the Government has proposed setting up of 100 mobile soil testing laboratories across the country at a cost of ₹56 crore. If the scheme is carried out successfully, it can help increase productivity by ensuring balanced fertilisation. It can lead to rationalisation in the usage of cheaper fertiliser – urea and thereby reduce the Government’s subsidy burden.