COMMENT – Status quo budget for Indian agriculture


The Union Budget did not propose anything transformative for agriculture as a sector. It is  a neutral budget for the sector.  It highlighted how the MSP and Procurement volumes went up in the last few years.  High procurement values of wheat, rice and pulses in  2020-21 should give sufficient cash in the hands of farmers for the upcoming Kharif.

Good to see increased agricultural credit target at Rs. 16.54 lakh crores. That should help the farmers with availability of credit.

This has primarily been an infrastructure budget in general. Allocation of Rs. 40,000 crore to rural infrastructure should help the villages and, in turn, the farmers.  Rs. 10,000 crore to Micro irrigation is a good measure.

Dr. Ram Kaudinya

The decision to include 22 perishable crops in Operation Green should also help. Increasing customs duty on import of cotton should strengthen domestic cotton prices although we are no longer large importers of cotton, courtesy Bt Cotton technology.

Important measures on the marketing side of output are extension of e-NAM to another 1,000 mandis and to making the Agri Infrastructure Fund apply to APMC mandis. It is also good to see establishment of Mega Textile parks. Hopefully that should help cotton farmers.  

The expectations on investments for research and innovation, one of the pillars of Atmanirbhar Bharat, were high especially in view of the need to scale up private sector investments in agricultural research, especially in biotechnology, seed technology research and other agricultural research. The seed industry is expecting restoration of 200% tax deduction of research expenses. But these expectations were not met.

We expected announcement of a major edible oil project in the country to decrease imports and to   incentivize domestic cultivation and introduction of modern technologies in crops like Mustard, Soybean and Ground Nut. But no such announcement was made.

Some big-ticket announcements on scaling up agricultural exports, mechanisation of agriculture to address high labour costs, were expected but were also missing from the budget announcements. Economic corridor for agricultural exports is definitely needed.

These are some missed opportunities, indeed. Agriculture contributed significantly to our successful fight against COVID and from that point of view the importance it got in the budget is a bit disappointing.

(Ram Kaudinya is Director General, Federation of Seed Industry of India)

One thought on “COMMENT – Status quo budget for Indian agriculture”

  1. Unnj says:

    Nicely summarized. Still there are lots of ifs and buts…

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