Sunday, 7 June 2020

A Budget For Agriculture

Updated: February 18, 2012 11:44 am

Even though the Union Budget will not be presented on February 28 this year on account of the elections in five states, this is an occasion to reflect on whether the Union and state governments will follow the Madhya Pradesh and Chhattisgarh example of having a special budget for agriculture. There are obviously two ways of looking at it: the conventional view being that if every sector was to start having its own budget, there would be no need for a budget at all. Moreover, a budget is a statement of income and expenditure—and also the broad statement of purpose of the government. The comparison with railways is not really valid—for it has its own income and expenditure, and is also the largest employer in the organised sector. In fact, several commentators have suggested that the Railway Budget should also be a part of the Union budget, but given the salience of railways in coalition politics, it is not likely to happen in the near future.

The view from the states which have a Krishi cabinet, and a Krishi Budget is that it signals the significance of agriculture in the political economy of the state—and if the sector in which nearly two thirds of the population is engaged—does not get special focus and attention, it tends to get neglected. There is merit in this argument as well, because till the introduction of the RKVY in 2007, both Central and state governments’ spending on agriculture and allied sectors was on the decline. Even now, in comparison to infrastructure sectors, or even Metros like Delhi, the allocations for this sector leave much to be desired. A separate budget does mean that a specific target will be given, and will have to be adhered to. It also implies that all sectors, which have a direct impact on agricultural production and productivity—rural development and infrastructure, water resources and minor irrigation, power, forests and environment, food and civil supplies, co-operatives, rural roads, renewable energy, food processing, besides of course all the allied sectors like horticulture, animal husbandry, dairying, fisheries and agricultural research and extension—will have to sit together and work out convergence strategies at the apex level, rather than leaving it to local functionaries to sort things out at the district and sub-district levels, where it becomes ‘redistributive’ rather than ‘efficient’. This means that power department will have to clearly spell out the expenditure it proposes for the rural feeder and for agro-processing, and the Rural Development Department will give an assessment of the watersheds and rural godowns that will be constructed under the employment guarantee schemes, besides, of course, seeking a consensus on how best to optimise the resources.

Now that the pros and cons of both sides have been given, the issue is: what is the recommended course of action. Agro-Watch still feels that a separate budget will not necessarily have better outcomes because issues of co-ordination, implementation and field level issues will continue to persist. This will also lead to a fair amount of window dressing—for once instructions are issued that a certain percentage will be spent on a particular sector, or sub-sector, compliance is achieved on paper. Moreover, what should have been done in the normal course will now be attributed to, or allocated to the quota on agriculture. To illustrate this: education and health departments are not expected to exclude anyone, especially in their primary level coverage. However, when a school or hospital is opened in an area which is predominantly inhabited by the scheduled castes or tribes, it is marked as Special Component or Tribal sub Plan. What the education and health departments are supposed to do is to draw up a special plan, over and above the normal entitlement, rather than crow over the fact that the entitlement which in any case was due has been provided for. What does the irrigation department exist for except to provide water to irrigate the fields? The normal mandate of a department, therefore, cannot be shifted to another head, just because a ‘special budget’ for agriculture has to be created.

Therefore, it is much better for agriculture and the allied sectors to insist on higher allocations and better co-ordination within the general budget, rather than seek a ‘figurative’ status of a special budget. In fact, having a separate sub-committee of the Cabinet to oversee the functioning of all the agriculture and allied sectors is a much better idea, for the real problems of agriculture are mostly field related. In fact, greater co-ordination between the revenue and agricultural departments can ensure universal coverage of Kisan Credit cards, reforms in the APMC Act will ensure greater transparency, and reduced transaction costs and infrastructure for agriculture markets, especially electronic auction platforms are all policy related. We have to ensure that the institutions which exist work better, rather than create new structures at the drop of a hat. Thus, the agriculture and allied sectors have to do their homework better; they have to draw up a wish list—not just vis-a-vis the Finance departments, but also with respect to other departments, and ensure that the priorities of this sector become national and state priorities. If agriculture has to be on centre stage—it must be on centre stage in the main budget itself—the approach has to be ‘inclusive’, rather than ‘exclusive’, for by its very nature, agricultural operations are successful only when they draw diverse resources together for a common purpose.

By Sanjeev Chopra

(An IAS Officer, the author is Joint Secretary & Mission Director, National Horticulture Mission, Government of India. The views expressed are personal.)

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