Big push for agri digital infra, co-ops, organic farming
New Delhi, February 1, 2023
Rural housing gets huge fund outlay for completion of projects ahead of 2024 general elections
Finance Minister Nirmala Sitharaman’s last full budget before the 2024 general elections focused heavily on developing the digital infrastructure for agriculture and promoting organic farming, It also gave a big thrust to cooperatives and the cooperation sector, which are now functioning under a new ministry under home minister Amit Shah.
Food subsidy has been slashed by 31.2 per cent in FY25 Budget Estimate (BE) from Revised Estimate (RE) of FY23, due to the ending of the extra free grains distributed through PDS. Fertiliser subsidy has also been cut by 22.2 per cent in FY24 BE from RE of FY23, due to drop in global rates.
That apart, rural housing has got a big push with allocation for the housing sector as a whole jumping by almost 66 per cent to nearly Rs 79,000 crore. Within this, the allocation for rural housing in FY24 was almost 14.5 per cent higher at Rs 55,487 crore (Rs 48,422 crore in RE of FY23).
PMAY-G (Pradhan Mantri Awas Yojana-Grameen) is a flagship scheme of the Narendra Modi government under which the Centre aims to build 29.5 million pucca houses in rural areas, through convergence with other schemes by March 2024. Each of these dwelling units will have basic amenities such a functional toilet and single-point electricity connection.
Of this target, some 25 million houses have been sanctioned till December 15, and 21.1 million houses have been already built.
In FY23, the Centre first allocated Rs 20,000 crore for the programme and then topped it up with another Rs 28,000 crore through supplementary demand for grants, taking the scheme’s total outlay to almost Rs 48,000 crore.
In contrast, the rural jobs programme, MGNREGA, saw its allocation drop by almost 33 per cent to about Rs 60,000 crore in BE of FY24m from the RE of FY23. This is because the Centre expects lower demand as economic activities come to normal post-Covid.
Also, being a demand-driven scheme, the budget can be enhanced at a later stage. A sizeable amount of the FY24 MGNREGS budget will be spent on clearing past dues at current allocation levels.
But something that could come as a dampener for the agriculture sector, particularly the farmers, is no increase in the PM-KISAN payout of Rs 6,000 per annum. The finance minister did, however, announce an agriculture accelerator fund to encourage startups and others working in the field.
She also announced a plan to boost extra-long staple cotton production in the country.
“Digital public infrastructure for agriculture will be developed which will be an open source, farmer-centric solution to develop facilities like crop estimation, help improve production etc,” Sitharaman said.
The Budget also focusses on promoting the millet economy by developing the Indian Institute of Millets Research as a Centre for excellence.
The target for agriculture credit has been increased to Rs 2 trillion for FY24.
Cooperative sector: The FM announced the creation of a national database to map all cooperatives, and a scheme for creating decentralised storage capacity through cooperatives.
For promoting organic farming, the Budget announced a new scheme PM-PRANAM to incentivise states to bring down the use of chemical fertilisers. A scheme called Gobardhan was also announced to promote 200 CNG gas plants using cow-dung and other agricultural and livestock waste.
“Gradually, we will move towards a 5 per cent mandate for CBG going forward,” Sitharaman said.
Coming back to the cooperatives, the budget apart from announcing the slew of measures also made some big announcements in giving tax relief to such institutions.
These include new cooperatives engaged in manufacturing getting the same tax benefit as a newly set up manufacturing company. Sugar cooperatives have been allowed to claim payments made to sugarcane farmers prior as expenditure.
A higher per-head cash deposit for members of coops has also been proposed in the budget.
[The Business Standard]