Budget 2023 was announced by Nirmala Sitharaman on 1st February 2023 and one of the key aspects was the agricultural sector. India achieved food independence because of the aggressive agricultural reforms and development over the past few years. To maintain such independence and further increase the exports of agricultural products, the development of the agriculture sector is paramount.
The agriculture budget in India refers to the amount of money allocated by the Indian government toward various agricultural programs, initiatives, and schemes. In the agriculture budget, farming, irrigation, crop insurance, rural development, research and development, and market development and all agri-related sectors are covered. It also includes funding for various government schemes and programs. Let’s see the agriculture budget 2023 highlights.
Read More: Nirmala Sitharaman Union Budget | Budget 2023 Highlights
Overview of the Agricultural Sector in India
Agriculture is the source of livelihood for 58% of India’s population. As per INC42, India’s agricultural market is expected to value at $24 billion by 2025. Further, India is exporting multiple agricultural products like rice, sugar, coffee, tea etc. The government is introducing multiple schemes and measures for further development of the agricultural sector in India. The importance of the agricultural sector for any country’s development can be summed up as under:
- Agriculture is the primary source of food and nutrition for the population.
- It provides employment to a significant portion of the population, especially in rural areas.
- Agriculture contributes to the overall economic growth of the country by providing raw materials to various industries, such as textiles and food processing.
- It plays a crucial role in foreign trade, as many countries rely on agricultural exports for revenue.
- Agriculture helps in poverty reduction by increasing the income of farmers and rural households.
- It is essential for maintaining ecological balance and preserving biodiversity.
- Agriculture provides a source of renewable energy, such as biofuels.
- It plays a critical role in food security and ensuring the availability of affordable food to the population.
- Agriculture is necessary for rural development and for improving the standard of living in rural areas.
- It helps in achieving self-sufficiency in food production and reducing the dependence on imports.
Considering the huge importance of the agricultural sector and the high dependence of the majority of our population on the same, there were huge expectations tied to Budget 2023. This includes allocation towards the agricultural sector, credit access, government schemes and integration of technology. However, whether the same were really met by the Indian Government? Let’s find out!
Allocations in Agriculture Sector Budget 2023
In reality, the allocations for the agriculture sector slashed in the department of agriculture budget 2023 as compared to the previous fiscal year. While it was Rs. 1.33 lakh crores in the Union Budget 2022, it was slashed down to Rs. 1.25 lakh crores in Union Budget 2023 for farmers. This sums up to 2.78% of the total Union Budget this year. If the sector was performing well and didn’t need much support, then this move would have been welcomed. However, the story is a bit different because the growth of the agricultural sector in India is portraying a declining trend. While it was 5.5% in the year 2019-20, it dropped down to 3% in the year 2021-22.
Measures Announced for Improving Agricultural Production and Income
While the agriculture allocation 2023 has reduced, the government certainly introduced some key measures for its growth and development. This includes:
Increase in Credit
The government has increased the institutional credit allocation to Rs. 20 lakh crores for the agricultural sector. While the increase in credit is much welcome, again the trend in increase is in decline. The credit allocation was at Rs. 15.8 lakh crore in FY 2020-21 which was increased to Rs. 18.6 lakh crore in FY 2021-22. This was increased to Rs. 20 lakh crores in farming budget 2023, thus indicating a marginal increase as compared to the last year.
Natural Farming
Natural farming involves producing fertiliser and chemical-free food grains and other crops. This helps reduce environmental and soil pollution while ensuring the harmless production of crops. The government will be extending financial assistance to millions of farmers in the next 3 years in order to purchase inputs for growing organic products under the organic farming budget. The aim of the natural farming budget is to adopt sustainable means for agriculture in India.
Digital Public Infrastructure
The government is focusing on developing a digital public infrastructure for the agricultural sector. It will be built as an open standard, open source and interoperable public good. This will provide much-needed support in terms of the following:
- Inclusive farmer-centric solutions through the relevant information services for crop health and planning
- Increased access to farm credit, inputs and insurance
- Assistance in crop estimation
- Market Intelligence
- Support for the growth and development of agri-tech startups and the industry as a whole
Agriculture Accelerator Fund
The government has set up an agricultural accelerator fund to encourage young entrepreneurs in rural areas to set up agri-startups. The aim is to deliver innovative solutions to the challenges that the farmers face. This won’t only increase the overall efficiency of the agricultural sector but also help integrate the technology for transforming agricultural practices and enhance overall profitability and productivity.
Along with the reductions in budget allocations for the agricultural sector, the allocation for Pradhan Mantri Fasal Bima Yojana also decreased. It was reduced from Rs. 15,500 crores in the previous budget to Rs. 13,625 crores in agriculture budget 2023. Also, the Pradhan Mantri Kisan Samman Nidhi saw a drop in allocation from Rs. 68,000 crores to Rs. 60,000 crores. However, the allocation for the Department of Agricultural Research and Education increased by Rs. 1000 crores.
Further, the government is focusing on building agricultural infrastructure. Accordingly, Rs. 1 lakh crore will be provided by the banks and financial institutions as loans to the Marketing Cooperative Societies, Primary Agricultural Credit Societies, Farmer Producers Organisations, Farmers Joint Liability Groups, Self Help Groups, Multi-purpose Cooperative Societies etc. while also developing the public-private partnership.
Measures for Improving Rural Livelihood
The purchasing power of the rural population has decreased, especially due to an increase in inflation. Further, the demand for employment under the MGNREGA is on the rise, thus reflecting the stress on the rural area. In Budget 2023, the government has focused on helping rural livelihood by setting up funds for agricultural development and developing digital public infrastructure for agriculture. Further, for assisting the farmers in storing their produce and getting fair prices for timely sales, the government will set up a sizable decentralised storage capacity.
Rs. 2516 crores of investment was made for computerising the 63,000 Primary Agricultural Credit Societies (PACS). The Indian Institute of Millet Research, Hyderabad will be supported as the Center of Excellence for Best Practices, Research and Technologies. This will help India become a global hub for ‘Shree Anna’. Further, the government has not made any deductions in the Sarva Shiksha Abhiyan (SSA) allocation for improving the education quality in the rural sector.
Conclusion
While the government did not match the expectations in terms of allocations to the agricultural sector, it surely ensured that it took up initiatives for the development of the agricultural sector. The goal ahead should be to lower the reliance on conventional and traditional agricultural methods and to integrate technology with agriculture. Public-private partnerships and encouragement to entrepreneurs will play a pivotal role in ensuring that the agricultural sector becomes more efficient.
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