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Resource centre on India's rural distress
 
 

Budget 2016-17: Terrible Let-down for Indian Farmers
-Press Note on Union Budget 2016-17 from Swaraj Abhiyan

The farmers of India needed and expected a big deal from this year’s budget – they needed it because it is a time of unprecedented consecutive years of drought, and rising farmer suicides; they expected it because the Prime Minister and the government indicated that major pro-farmer steps would be announced in the Budget. The Budget presented by Finance Minister today is a terrible disappointment to the farmers of the nation. The most anti-farmer government in India’s history attempted to do an image makeover by projecting it as a pro-farmer budget – but it is generous with words, stingy with funds.
 
The Budget speech promises “income security” to the farming families, that the incomes of farming families will double in 5 years. But no mechanism has been announced to ensure this. Farmers’ organizations have called for a statutory, permanent Farmers’ Income Commission and a Farmers’ Income Guarantee Act to assure a minimum living income to farming households. Without this, “income security” remains just rhetoric.

At the Kisan Sansad at India Habitat Centre today, farmers from Jai Kisan Andolan and 35 farmer organizations rejected the government’s Budget and adopted a resolution in favour of the model Krishi Budget prepared by the farmers’ organizations and presented at the Sansad. They gave a call to farmers’ organizations across the nation to take up sustained struggle to expose the anti-farmer nature of the government and realize the Krishi Budget.

What is glaringly missing in the Budget:

- When 40% of the nation is reeling under drought, when thousands of farmers are committing suicide due to indebtedness, a major bailout package was expected from the government – which includes interest waiver, debt swapping of private loans with bank loans, and disaster compensation. When the corporate sector was under stress in 2008-09, they got a Rs.300,000 crore bailout package – but when the farming community is in crisis, the government has shown no political will to come to their rescue.

- No allocation to ensure remunerative prices to farmers, in terms of higher MSPs, Market Intervention Scheme or Market Stabilization Fund.

- While farmers demanded a disaster compensation of Rs.10,000 per acre, no increase was announced from the current levels of Rs.3000-4000 per acre.

- While tenant farmers and sharecroppers are excluded from bank loans, insurance and subsidies, no measures were announced for their inclusion. There was no mention of Bhumiheen Kisan in the entire speech.

- No special measures for Rainfed Agriculture which faces the brunt of the crisis.

Most of what the Budget speech projects as big favours to the farming community is actually “Business as usual” with a sleight of hand. The outlay of Rs.35,984 crores to Agriculture is being projected as a major increase but in reality it is a pittance. In 2014-15, the outlay was Rs.31,000 crores, which was drastically reduced to Rs.24,910 crores in 2015-16, and now increased to Rs.35,984 crores. Less than 3.5% of the entire Budget is going to Agriculture when 55% of India’s population depends on agriculture and in a year when farmers are facing their worst crisis.

The flagship crop insurance program Prime Minister Fasal Bima Yojana (PMFBY) is being projected as a panacea to farmers, and that more than 50% of the farmers will be brought under insurance cover from the current level of less than 20%. The allocation for insurance has been raised from Rs.2600 crores to Rs.5500 crores but this would not cover any additional farmers, because this would only go to the insurance companies towards higher premium subsidy for the existing insured farmers. The PMFBY also has many shortcomings which have been already pointed out by farmer organizations.

The target of bringing additional 28.5 lakh hectares under irrigation in 5 years is to be welcomed – but this amounts to less than 2% of the net cultivated area of 141 million hectares. The allocation from the Centre is only Rs.12,000 crores towards the Prime Minister Krishi Sinchai Yojana (PMKSY). In 2014-15, Rs.13,492 crores was allotted for PMKSY but only Rs. 5630 crores was spent.

When 40% of the nation is reeling under drought, a much higher allocation to MGNREGS was expected to the tune of Rs.60,000 crores. The actual allocation is only Rs.38,500 crores – which appears high only because of the drastic cuts in the past two years. This only brings it to the level of 2011-12 when the allocation was Rs.39,000 crores.

The allocation of Rs.15,000 crores for interest subsidy is only a marginal increase over last year’s allocation of Rs.13,000 crores. But there is no mechanism to ensure that this would go to small farmers and tenant farmers instead of corporate houses and absentee landlords.

In summary, this is a budget long on promise, short on delivery. It is a cruel joke on the farmers that the Government is projecting this as a major boost to the farm sector.