Agriculture needs a big push now

This is the last full Budget of Union Finance minister P Chidambaram before his party goes to elections next year. He has tried to please all sections of the society — farmers, industrialists, SCs, STs, OBCs, minorities, women, children, income tax payers, etc. There were a lot of expectations that the Budget would focus on agriculture and rural areas. Growth rate of agriculture declined from 3.8% last year to 2.6% this year. Farmer suicides are still continuing. Increase in global food prices has also led to an increase in food inflation. The Economic Survey says that the 'acceleration of growth of this sector will not only push the overall GDP growth upwards, it would also make the growth more inclusive'.

The main announcement regarding agriculture relates to debt waiver scheme for farmers. For marginal farmers (i.e., holding up to 1 hectare) and small farmers (1-2 hectare), there will be a complete waiver of all loans and in respect of other farmers, there will be a one-time settlement (OTS) scheme for all loans. Government estimates that about three crore small and marginal farmers and about one crore other farmers will benefit from the scheme. The total value of overdue loans being waived is estimated at Rs 50,000 crore and the OTS relief on the overdue loans is estimated at Rs10,000 crore.

It is true that farmers needed some relief due to crisis in agriculture. But, it is not clear whether it is going to help farmers in the future and improve agriculture sector. Who is going to finance Rs 60,000 crore?