The last interim budget was presented by the then finance minister Piyush Goyal just before the 2019 General Elections. The government announced an important scheme, the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) Yojana, to provide assured income support of Rs 6,000 to the small and marginal farmers. The programme had an outlay of Rs 75,000 crore for the FY 2019-20. For the upcoming interim budget, renowned agriculture economist and Professor at the Indian Council for Research on International Economic Relations (ICRIER), Ashok Gulati, suggests that the scheme should be adjusted to inflation.
“So, in real terms, actually, you started off with Rs 6,000, but the real value of that is much less today. So, if you have to keep the same, what it was in 2019, it should be Rs 8,000. Second, compensating for the loss for restrictive export policies and stocking limits,” Gulati told ET.
Siddarth Bhamre, EVP and Head of Research, Religare Broking, believes that PM Kisan Yojana was one of the prominent announcements in the last interim budget, which may inspire the present government. “This government is confident of winning the coming general election but we still believe that there will be some announcement which will benefit rural masses, especially farmers,” Bhamre said.
Moreover, in 2019, Goyal announced the creation of a separate Department of Fisheries to provide sustained and focused attention towards the development of Fisheries. The government aimed to aid further growth over 7 per cent to promote the livelihood of about 1.45 crore people dependent on the sector, via a new ministry.
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Further, the 2019 interim budget also announced ‘Women development to women-led development’ which also became the Modi government’s prime agenda for the next few years.
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The last interim budget had several women-centric schemes including Ujjwala Yojna which seeks to provide free LPG gas connections; Pradhan Mantri Matru Vandana Yojana where financial support is provided for pregnant women; the government also announced that at least 3 per cent of the 25 per cent sourcing for the Government undertakings will be from women-owned SMEs.
Experts feel that the budget will maintain its focus on women and implement schemes similar to ‘Ladli behna’ in Madhya Pradesh.
“On the cash front, if they want to give something, they should initiate the Ladli scheme on the lines of Madhya Pradesh,” Gulati told ET.
Other schemes in focus could be the Pradhan Mantri Shram-Yogi Maandhan Yojana and the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
The Infra push in the interim budget
Infrastructure in the hinterland, over the years, has gained traction and the authorities have realised what infrastructural push in these regions means. In the last interim budget, the government allocated Rs 19,000 crore in BE for the Pradhan Mantri Gram Sadak Yojana (PMGSY).
Experts feel the Modi government may lay emphasis on these schemes this time around too.
“I think the FM is going to play more on the achievements in terms of health coverage, giving sanitation, toilets, PM Awas and Har Ghar Jal. These schemes are improving sanitation, electricity and health cover. So, I do not think there is going to be any major add-on this time around,” Ashok Gulati remarked.
Rural voter turnout in 2019 elections
Phir ek baar Modi Sarkar turned out to be true in the 2019 General Elections. The incumbent BJP managed to increase their seat share from 282 to 303 and their vote share from 31 per cent in 2014 to 37.6 per cent.
Even though their urban vote base was more or less the same in urban areas, with a meagre increase of 2.2 per cent, what really made a difference was an increase in the party’s vote share by around 6.8 per cent from rural India.
A paper titled “The Rural Vote in the 2019 Indian General Elections” by Vani Swarupa Murali and Diego Maiorano from the Institute of South Asian Studies finds that the government’s growing efforts to address, albeit partially, rural distress in the last part of its term enabled the party to gain rural attraction despite the major farmers’ protests against the MSP.
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Again, an increase in budgetary allocation towards agriculture and allied activities may be credited for the same with programmes like PM-KISAN implemented just towards the end of 2018.
The paper mentions a survey finding from Lokniti which states that only 5 percent of farmers cited farming-related issues as critical in deciding their vote. Rather, these other, more general welfare schemes took precedence.
“About 15 per cent of the farmers cited development as the most important factor in influencing their vote while 10 per cent cited unemployment. Moreover, despite the large number of farmer protests in 2018, 68 per cent of farmers answered that they were satisfied with the NDA government’s performance,” the paper stated.
However, Religare’s Bhamre finds that it will be unfair to the current government to link every move of theirs to elections.
“We believe it’s very important not just in this interim budget but next full budget as well that focus and funds should be diverted towards rural economy. MGNREGA, AYUSH and other schemes are some of the vehicles through which rural economy can be supported but we think there should be more tools to drive rural economy going forward to achieve sustainable growth of our country,” he added.
What the experts expect in 2024 interim budget and what’s in store for the hinterland
Ahead of the interim budget, experts have highlighted the need to ensure food security and include nutrition in policies along with the need to prepare agriculture to face the consequences of climate change such as uncertainty of the heatwave or when the erratic rains like in this kharif season.
However, Ashok Gulati expects announcements around millets and MSP hikes.
“There could be announcements around pulses or millets. There is a huge buzz around millets, but the fact is if you are giving free wheat and rice to 800 million people, are they going to eat millets?” Gulati asked.
The agricultural expert suggests a correction in the consumption basket as well as the food production basket which starts with giving crop-neutral incentive structures..
“Currently, government purchases 60 million tonnes wheat and rice. So, you are not crop neutral although you announce MSP for 23 crops but the fact that it is rice, wheat and so, other crops when the prices go below MSP, there is nobody to buy that and support that price or very little intervention is done. I read that Mr Amit Shah has recently stated that they will buy pulses at MSP and farmers can register well in advance and so on and so forth. So, maybe that type of announcement will come,” he said.
Gulati also suggests the need to increase expenditure on Research and Development from 0.5 per cent to a minimum 1 per cent adding that it should be at least 1.5 per cent or 2 per cent of agri GDP in the case of a large population and climate uncertainties.
