Current Scenario In the Union Budget 2022-23, the government allocated Rs. 1.24 lakh crore (US$ 15.9 billion) to Department of Agriculture, Cooperation and Farmers’ Welfare. Also, Rs. 8,514 crore (US$ 1.1 billion) were allocated to the Department of Agricultural Research and Education. Food grain production increased from 308.65 million tonnes in January 2022 to 315.72 million tonnes in December 2022 (as per 4th advance estimates) which is the highest ever food grain production. As per third advanced estimates, horticulture production during 2020-21 was 331.05 million MT which is increased to 342.33 million MT during 2021-22. It is the highest ever production for Indian horticulture. Government increased the MSP for all mandated Kharif, Rabi and other commercial crops with a return of at least 50 per cent over all India weighted average cost of production from 2018-19. For the cropping year 2020-21, the Government through its Nodal Agencies procured 12,11,619.39 MT of Pulses and Oilseeds having MSP value of Rs.6,830.18 Crores benefitting 7,06,552 farmers whereas in the year 2021-22, a quantity of 31,08,941.96 MT of pulses, oilseeds and copra having MSP value of Rs. 17,093.13 crore benefiting 14,68,699 farmers has been done. In PM-KISAN scheme, Rs. 1.82 lakh crore was released to more than 11.74 crore farmers in January, 2022 whereas more than Rs. 2 lakh crore has been released so far to more than 11 crore eligible farmers till December, 2022. PMFBY was launched in 2016 addressing problems of high premium rates for farmers and reduction in sum insured due to capping.

Till December, 2022 nearly Rs. 25,192 crore were paid by farmers as their share of premium against which claims of over Rs. 1,28,522 crore (Provisional) have been paid to them, thus for every 100 rupees of premium paid by farmers, they have received about Rs. 510 as claims. Within two-and-a-half years of the implementation of the Agriculture Infrastructure Fund (AIF), the scheme has mobilized more than Rs.30,000 crore for projects in the agriculture infrastructure sector with a sanctioned amount of Rs.15,000 crore under AIF.

With support of 3% interest subvention, credit guarantee support through CGTMSE for loan of up-to Rs.2 crore and facility of convergence with other Central and State Govt. Scheme, AIF is providing all around financial support to the farmers, agri-entrepreneurs, farmer groups like Farmer Producer Organizations (FPOs), Self Help Groups (SHGs), Joint Liability Groups (JLGs) etc. and many others to create post-harvest management infrastructure and build community farming asset throughout the country.

The country has witnessed emphatic growth in export of agri and allied commodities. As compared to previous year 2020-21, the Agri and allied export has increased from 41.86 billion USD in 2020-21 to 50.24 billion USD in 2021-22 i.e. an increase of 19.99%. The government has been able to support the farmers through MSPs to achieve higher farm incomes. But the farmers are yet to become completely independent of subsidy support which can be achieved by reducing the input costs burden and appropriate prices for their output.

Budget Expectations:

The Union Budget 2023-24 should consider reducing the Goods and Services Tax (GST) on crop protection products, farm equipment, seeds and other inputs. The GST rate on agro-chemicals can be lowered to 12% which eventually will reduce burden on farmers. A Production Linked Incentives (PLI) scheme can be introduced for the agrochemical sector which can help boost the manufacturing in India.

A major outcome of the PM-KISAN can be the ability of the farmers to get more liquidity to buy inputs for their farms. Hence, an outlay of PM-KISAN scheme can help in this venture.

Another enhancement can come in the form of technology and R&D advancements. Emerging technologies such as drone and artificial intelligence (AI) are proving to be game changers. In order to make this technology affordable to the farmers and other stakeholders of this sector, financial assistance at 100 % cost of drone together with the contingent expenditure is extended under Sub-Mission on Agricultural Mechanization (SMAM) for its demonstration on the farmer’s fields. From the SMAM, additional outlay can be provided to enhance the use of drone in agriculture activities. The share of R&D in Agriculture GDP is very low. Public Private Partnerships in this area can help in achieving the results from intense R&D and make Indian agriculture self-reliant.

Outlook

The Indian Agriculture sector is likely on a growth track with inflation easing out, falling Covid cases, and increased investment outlays. In order to achieve the goal of doubling farmers’ income, the Union Budget can generate better momentum in the form of technological advances and increased liquidity. Making farmers self sufficient and offering them infrastructure such as irrigation facilities, warehousing, and cold storage. Furthermore, the growing use of genetically modified crops will likely improve the yield for Indian farmers. India is expected to be self-sufficient in pulses in the coming few years due to concerted effort of scientists to get early maturing varieties of pulses and the increase in minimum support price.