Budget may hike farm funds by 30%, raise subsidy: Sources
Pic Credit: Maritime First
New Delhi: Continuing its focus on the stressed agriculture sector in the upcoming full Budget in July, the Finance Ministry is likely to increase allocation by a minimum 30 per cent over the interim Budget figures, as well as announce a flagship farmers’ scheme, official sources said on Friday.
Sources privy to the budget preparations said, that it may offer more support to some of the existing farmer support schemes, including for minimum support price (MSP), interest rate subvention and higher fertiliser subsidy.
In the interim Budget presented in February, agriculture had received an unprecedented 144 per cent hike rise in allocation, from Rs 57,600 crore in 2018-19 to Rs 1,40,764 crore in the February budget.
This allocation set for a minimum 30 per cent hike by to reach about Rs 1.83 lakh crore in the full budget due in July. Agriculture had comprised 3.52 per cent of the budget in the 2017-18, but had cornered 5.39 per cent of the interim budget in February.
The biggest announcement in the interim budget — the Pradhan Mantri Kisan Samman Nidhi to provide structured income support to 12 crore farmers at a cost of Rs 75,000 crore may see a variant to provide a regular annual income to the farmers, a source said.
“There may be some flagship scheme like the Kisan scheme in the 2019 interim budget, in the July full budget which would be a flagship, or a distinct feature, for the farmers”, he said.
The Kisan scheme, which has already been rolled out retrospectively from December last year, was earmarked Rs 20,000 crore for the rest of the last fiscal (January-March).
Only half this amount could be spent as the election model code of conduct came into operation almost midway through the last quarter.
The Budget may also announce a higher interest rate subvention for crops affected by natural calamities like the recent cyclone ‘Fani’, and also on timely repayment of loans, the sources said, adding there is no direct farm loan waiver under consideration as the government does not want to encourage this credit culture.
The fertiliser subsidy is also going to see a higher allocation as the government is trying to provider soil nutrients to the farmers.
The fertiliser subsidy in the interim budget was pegged at Rs 74,986 crore for 2019-20. The fertiliser subsidy bill in 2018-19 overshot by at least Rs 25,000 crore, which was rolled over to the 2019-2020 fiscal.