Indian government goes big on agriculture in its budget to address rural distress ahead of key elections


India's Finance Minister Arun Jaitley seen ahead of presenting his 2018-19 annual budget to Parliament on Feb 1, 2018 in New Delhi. Photo/PIB

India’s ruling Bharatiya Janata Party (BJP) rolled out major sops for the agriculture sector in its attempt to arrest rural distress and help farmers earn more ahead of key state elections this year and national polls in 2019.

Finance Minister Arun Jaitely announced a slew of new schemes and measures in his annual budget proposals presented to parliament, as he once again spoke of the government’s commitment to the welfare of farmers and its intention to double their income by 2022.

He said that the government has decided to keep the minimum support price (MSP) for all unannounced kharif crops a at least one and half times of their production cost after declaring the same for the majority of rabi cops.

Jaitely also proposed to raise the volume of institutional credit for agriculture sector to Rs 11 lakh crore in 2018-19.

His speech came as the BJP was trounced in three by-elections in the state of Rajasthan – two parliamentary and one state assembly – by the main opposition Congress party.

Following are the other key proposals for the sector:

  • A Fisheries and Aqua culture Infrastructure Development Fund (FAIDF) for fisheries sector and an Animal Husbandry Infrastructure Development Fund (AHIDF) for financing infrastructure requirement of animal husbandry sector with a total corpus of Rs.10,000 crore for the two new funds.
  • On the lines of “Operation Flood” a new Scheme “Operation Green” with an outlay of Rs 500 crore to address the challenge of price volatility of perishable commodities like tomato, onion and potato.
  • Develop and upgrade existing 22,000 rural haats into Gramin Agricultural Markets (GrAMs) to take care of the interests of more than 86% small and marginal farmers. These GrAMs, electronically linked to e-NAM and exempted from regulations of APMCs, will provide farmers facility to make direct sale to consumers and bulk purchasers.
  • An Agri-Market Infrastructure Fund with a corpus of Rs 2,000 crore for developing and upgrading agricultural marketing infrastructure in the 22,000 GrAMs and 585 APMCs.
  • Rs 200 crore for organized cultivation of highly specialized medicinal and aromatic plants
  • Allocation for Ministry of Food Processing doubled from Rs 715 crore in 2017-18 to Rs 1400 crore in 2018-19. A Re-structured National Bamboo Mission with an outlay of Rs1,290 crore to promote bamboo sector.
  • Ninety-six deprived irrigation districts to be taken up with an allocation of Rs 2600 crore.
  • Facilitate farmers for installing solar water pumps to irrigate their fields.
  • Extend the facility of Kisan Credit Cards to fisheries and animal husbandry farmers to help them meet their working capital needs.
  • Proposed to liberalise exports of agri commodities given potential to raise exports to $100 billion against the current exports of $30 billion.
  • Set up state-of-the-art testing facilities in all the 42 Mega Food Parks.
  • Special scheme to support the efforts of the governments of Haryana, Punjab, Uttar Pradesh and Delhi to address air pollution in the region by subsidising machinery required for management of crop residue
Shekhar Ghosh is consulting editor, He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at


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