The FM proposed liberalizing the agricultural sector and provide integrated solutions with the allied activities as well. However, the issue is that Agriculture is a state subject and the steps taken by the union government may not be readily accepted by the state governments bringing out no impact at all. An ideal suggestion would be to move Agriculture from state list to union list to get integrated benefits.
Government has come up with 16 Action Points. The FM has stated that they will incentivize the states accepting and implementing 3 Model Laws i.e. Land Leasing Act 2016, Livestock 2017 and Contract Farming in Livestock 2018.
The FM stated that PM Kusum Scheme will encourage farmers to use solar energy more which is a noble idea in itself. However, the low target of only 20 lakh farmers makes one sceptical about its overall impact!
FM also talked about changing the incentive scheme to encourage usage of traditional methods of farming as against chemical fertilizers. But the government needs to keep in mind that Indian farmers have largely fragmented landholdings and departing from chemical fertilizers may adversely affect the yield of the land.
Good Initiatives proposed by the Government for Agriculture and allied sector
- NABARD to map and geo-tag warehouses. The government will implement VGF (Viability Gap Funding) in PPP model wherein government will provide financial support to private partners for setting up warehouses till the project becomes sustainable.
- KISAN Rail- A Cold Supply chain for perishables is an innovative idea along with Krishi UDAN.
- FM proposed supporting state with “One District, One Product” scheme to bring economies of scale in production of specific products in specific districts.
- Negotiable Warehousing receipts will now be integrated with e-NAM allowing farmers to take loans against warehouse receipts to finance further crops rather than going for forced sale of crops.
- NABARD’s re-finance scheme has been expanded to 15 lakh crore in FY21.
Fund Allocation: INR 2.83 lakh crores (1.6 to agri and allied activities and 1.2 to irrigation and rural development)
Questionable Proposals
- FM stated of overcoming unemployment issues in coastal areas by hiring just 3000 Sagar Mitras . She also stated that 500 Fish Farmer Producer Organizations will be set up. Earlier set up Farmer Producer Organizations are not profitable. How will Fish Farmer Producer Organizations change the scenario is difficult to understand
- Also, the government’s target of doubling farmer’s income has been stated without any math behind it. Where will the expenditure be made? How will the revenue be earned to meet that expenditure?
Aspirational India-Education and Skills
- India is expected to have the largest working population by FY2030. As such, the FM emphasized on invoking “entrepreneurial spirits”. She also stated that Pradhan Mantri Gram Sadak Yojana is doing well and more jobs are coming up in construction sector.
- The FM proposed more FDI in the education sector which will mean privatization of the sector which again makes one sceptical of the proposal.
- The FM stated that students not pursuing specialization courses like Engineering will be made a part of the apprenticeship scheme to develop their skills along with vocational trainings.
- FM proposed 1 year internship of engineering students with Municipal bodies. This will definitely benefit the Municipal bodies as they will get qualified individuals to work on their issues. However, it is still unknown if the internship will be paid or not!
- A radical and, in my opinion, a great proposal made by the FM states providing full-fledged degree to students attending online education programs by top institutes in NIRF.
- IndSAT- an exam proposed to be qualified by Asians and Africans who want to study in India.
- District hospitals will be incentivized to get attached to medical colleges which is partially in existence already.
Fund Allocation: 99,300 Crore for Education and just 3000 Crore for Skill Development. India certainly needs to spend more in these sectors to improve its manpower!
Aspirational India-Healthcare
- PM Jan Aarogya Yojana has 20000+ private hospitals integrated with Ayushman Bharat. Ayushman Bharat is doing well and has been able to attract private hospitals. FM proposes Ayushman Bharat integrated hospital in every district.
- AI and Machine Learning will also be integrated in Ayushman Bharat.
- The FM stated that Jan Jivan Mission (providing water to stressed districts) has been successful. However, she didn’t give any numbers.
Fund Allocation: 69000 Crore (a dismal 1.2% of GDP) It is a missed opportunity as the government itself is targeting at 2.5% of GDP by FY 2025.
Overall, the government has brought a mixed budget with good new initiatives being proposed but no bing-bang announcement to boost the agriculture sector.
To read the second part of the Union Budget 2020 analysis, where I discuss the impact on the business world, click here!
To know what happens to the trade of India and what do you get as an Indian Consumer, read the third part of the analysis!
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Comments
Kuruvilla Alexander
Nice analysis,can you please re-check on the maths in the last line of "Fund Allocation: 69000 Crore (a dismal 1.2% of GDP)"? If GDP is $2.9Trn, wouldn't this be 0.35% of GDP?
13 Feb 2020, 11.30 AM