Budget allocation to rural and agricultural sectors: A critical appraisal

The paper analysed the budget allocations to agricultural, rural development sectors, food subsidy and fertiliser subsidies and also examined the reforms in these sectors and their likely impacts on the poor and vulnerable sections of the society in rural India. The combined budget of agriculture and rural development sectors was less than food and fertiliser subsidies hence, there was long neglect of rural and agricultural infrastructure that is leading to inefficient agricultural and rural production and service sectors. The budgetary allocation to agriculture and rural development was increased by 10 to 12% in Financial Year (FY) 201718 compared to 2016–17. There was more emphasis on irrigation under Prime Minister Sinchayi Yojana, market reforms to expand the electronic national agricultural markets, rural affordable housing and Mahatma Gandhi National Rural Employment Guarantee (MGNREGA). There was a need to increase budget allocation to high-value agriculture (horticulture, animal husbandry, dairy, fisheries) as growth of these sectors is much higher. There was also a need to increase allocation of more funds to increase rural infrastructure, agricultural markets, cold storages, warehouses with modern technology so that the rural sector in general and agriculture in particular will increase efficiency and productivity. Among the rural development programmes, MGNREGA, computerisation of land records and rural roads needs to be given priority. The agricultural sector growth is good in 2016–17 in all respects, but the preliminary observation shows that higher production may not be leading to the higher incomes to the farmers and especially most of the tenant farmers are making huge losses and highly indebted from informal sources of finance. There was need to reduce cost of agriculture through prioritising agricultural infrastructure through public investments and innovative public infrastructure like community bore wells.