Focus to help strengthen rural infra

In a welcome move, the Budget has laid much needed emphasis on the rural and agriculture sectors. The need to boost farmer income has been given recognition and the Budget has mandated that minimum support prices must be set at 1.5 times the cost of cultivation of crops. This will ensure that the farmer is remunerated adequately. The idea of boosting on-farm and non-farm incomes is a welcome move from the perspective of rural employment, and there has been continued focus on strengthening rural infrastructure.

The government’s intent to strengthen agriculture marketing infrastructure and improving farmers’ price realisation is clear with the announcement of setting up an Agri marketing infrastructure fund with a corpus of Rs 2000 crore to strengthen market connectivity. Further, plans have been announced to upgrade 22,000 rural haats into Gramin Agriculture Markets (GrAMs), which will be exempted from APMC and electronically linked to e-NAM. This will open up national markets for agriculture produce.

In tandem, to strengthen physical infrastructure, the Pradhan Mantri Gram Sadak Yojna Phase III will focus on connecting GrAMs with all-weather roads, providing better market connectivity and opportunities for improved price realisation.

Additionally, in recognition that a significant share of farmers’ income in recent times has been coming from livestock and fisheries, the Fisheries & Aquaculture Infrastructure Fund, and Animal Husbandry Infrastructure Fund, has been announced with a corpus of Rs 10,000 crore. Structural changes are to be brought into the functioning of rural economy, with Niti Aayog to come up with a model for lessee farmers to avail institutional credit.

Meanwhile, the allocation for institutional credit has been stepped up to 11 lakh crore for FY19.

Further, in an effort to create viable rural enterprises, favourable tax treatment has been offered to incentivise setting up of farmer producer organisations. In line with the same idea, the Centre will come up a cluster model at district level to promote economies of scale and market connectivity. The model will leverage production advantages of districts for specific horticulture products. It is a welcome push towards diversification into high value crops and horticulture crops, which will in turn lead to improved soil health, productivity and thereby profitability. Overall, the Budget provides significant impetus to the rural sector with strengthened infrastructure to enable better price discovery, better access to credit, and stronger market linkages. A strong package for the rural connectivity will boost productivity of the agriculture sector. With agriculture and the rural sector being the backbone of the economy, the Budget measures would help in supporting livelihoods and creating demand for goods and services.

CII commends the ability to deliver a popular Budget without becoming populist.

Shobana Kamineni is the president of the Confederation of Indian Industries