Union Budget 2022 For Farmers: Sitharaman Will Double Fertiliser Subsidy, PM-KISAN Allocation To Rise

The fourth budget of Union Finance Minister Nirmala Sitharaman is coming at a moment when after the pandemic shock in FY21 due to the rampaging second wave, India’s economy is flashing the uptick signs.

At such a critical phase, it seems the best bet for the Finance Minister is to spell out a short-term stabilisation fine print than a long-term vision. The road is not a luxury ride for the Fin Min Nirmala Sitharaman - because she has to do a tight rope walk of fiscal consolidation and pump-priming the economy.

While ICICI experts see the FY23 Union Budget being “fiscally prudent” as well as “growth supportive”, SBI and CARE economists think that the Budget will aim at gradual fiscal consolidation and will go for booster shots to employment-oriented and growth chips of the economy.

AIM-2022 - Torpedoing Slowdown

In order to accelerate the investment cycle and employment, the budget, as per CARE ratings will focus on the following.

• Infrastructure will continue to be the focus area, with emphasis on logistics and health infrastructure
• Employment generation measures to feature prominently
• New welfare schemes (largely aimed at boosting rural incomes) are expected, along with an increase in allocation and likely extension for existing welfare schemes (employment support, affordable housing (PM-AWAS)
• Formalisation (digitisation) of the economy to be accelerated
• Increased attention to ease of doing business
• Measures to promote exports are anticipated
• Policies for deepening of financial markets viz. bond markets likely to feature
• Capital ExpenditurecouldberaisedtoaroundRs 6 lakhcrore (8% increaseoverFY22BE)

Big Announcements For Farmers

• Fertiliser subsidytobeincreased – couldbearoundRs 1.4 lakhcrore(Rs 0.8 lakhcroreinFY22BE)
• Allocations undertheMahatmaGandhiNationalRuralEmploymentGuaranteeAct(MGNREGA)toberaisedtoRs 1 lakhcroreinFY23(Rs 0.73lakh
  croreinFY22BE)
• PM-KisanSammanNidhi(incomesupporttofarmers)couldberaisedRs75,000crore(Rs65,000croreinFY22BE).
• As per SBI experts, KCC is to be positioned as a livelihood card for small and marginal farmers in the Budget.

Flash-Light On MSME/Ruraleconomy: As per ICICI, the governmentis likely toextendECLGSandotherloanguaranteeschemesformicro, small andmediumenterprises(MSMEs),hospitalityandtourismsector,andthehealthinfrastructurebeyondMarch31.

• The budget will focus on MSP, agromarketingsupport,boosttoruralinfraandaidthroughcheaperfundingto revive the rural economy.
• ICICI expects an enhancedoutlayof Rs 1.4 lakh crore duringFY23(up ~19% from budgetedCAPEXof Rs 1.18lakhcrore during FY22) forroads.

Jal Jeevan Mission: As per ICICI experts, the scheme will see an increased allocation to the tune of Rs 60,000 cr. Under the JJM scheme, the Modi govt targets ensuring potable water connections to around 19.3 crore households by FY24.