January 28, 2023

Behind reduction in agriculture budget, lower spending under PM-Kisan

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While Finance Minister Nirmala Sitharaman did not mention PM-Kisan in her Budget speech, she tried to assure farmers about the minimum support price (MSP).

The Agriculture Ministry did not spend its full budget during 2020-21, leading to a reduction in the allocation in the revised estimates (RE) for the current financial year and a lower outlay for the next one. In Union Budget 2021-22, the two departments—Department of Agriculture, Cooperation and Farmers’ Welfare and Department of Agricultural Research and Education— under the Agriculture Ministry have been allocated a total amount of Rs 1,31,531.19 crore, lower than the current financial year’s budget estimates (BE) of Rs 1,42,762.35 crore, but a little higher than RE of Rs 1,24,520.3 crore.

While the Department of Agricultural Research and Education has seen a marginal increase—Rs 8,513.62 crore in BE 2021-22 from Rs 8,362.58 crore in BE 2020-21, the Department of Agriculture, Cooperation and Farmers’ Welfare has seen a reduction of over Rs 10,000 crore in its budget—from Rs 1,34,399.77 crore in BE 2020-21 to Rs 1,23,017.57 crore in BE 2021-22. However, it is higher than the RE figure of 1,16,757.92 crore for the current financial year.

The major cut in the ministry’s budget is due to lower spending under the Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) than the allocated sum. The government had allocated Rs 75,000 crore for PM-Kisan in the 2020-21 Budget. This, however, was reduced to Rs 65,000 crore in RE 2020-21 and now has been retained at the same level for the next financial year. Under PM-Kisan, Rs 6,000 per year is provided to the eligible farmer families in three equal quarterly instalments.

Ahead of the Budget, there was speculation about an increase in the amount in view of the farmers’ agitation. Union ministers have recently given statements regarding an increase in the ministry’s allocation during the NDA tenure. While Finance Minister Nirmala Sitharaman did not mention PM-Kisan in her Budget speech, she tried to assure farmers about the minimum support price (MSP).

“MSP regime has undergone a sea change to assure price that is at least 1.5 times the cost of production across all commodities. The procurement has also continued to increase at a steady pace,” the minister said. She added that a Rs 1 lakh crore Agriculture Infrastructure Fund would be made available to APMCs for augmenting their infrastructure facilities. She also announced the enhancement of agricultural credit target to Rs 16.5 lakh crore in 2021-22.

Protesting farmers have raised the issue of MSP and APMCs among several points of concern during talks with the government. Union Agriculture Minister Narendra Singh Tomar said, “This budget is very good. It is in the interest of people, villages, labourers and youths. I congratulate the Finance Minister and Prime Minister.”

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