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LATEST NEWS UPDATES | Why are states turning their backs on farmers? -Roshan Kishore

Why are states turning their backs on farmers? -Roshan Kishore

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published Published on Apr 15, 2016   modified Modified on Apr 15, 2016
-Livemint.com

One year after the implementation of 14th Finance Commission recommendations, 14 states have cut back on rural spending

New Delhi:
At a time when everybody is talking about rural distress, it seems many state governments have decided to turn their back on farmers. Data from the Reserve Bank of India’s (RBI) Analysis of State Budgets report shows that 14 out of 31 states cut their rural spending in 2015-16 compared to the previous year. In 2014-15, only one state brought down its rural spending. That this cutback has happened in the second straight year of drought makes it all the more harsh.

Rural spending described here includes expenditure on agriculture and allied activities, rural development, special area programmes, and irrigation and flood control. Numbers for 2013-14 are actual spending figures while those for 2014-15 are revised estimates and for 2015-16 budget estimates (BE).

What is the reason for this apathy towards farmers?

A reduction in central funds seems to be part of the answer. That appears counter intuitive since 2015-16 was the first year when the recommendations of the 14th finance commission (FC) were implemented. These recommendations were hailed by many on account of a 10 percentage point increase in states’ share in central taxes.

To be sure, this never meant that net receipts from the Centre to states were to increase by this amount. That’s because in order to make up for its loss of resources, there was to be a cutback in central government support to many centrally-sponsored schemes (CSS).

Thus, seven states saw a decline in net receipts from the Centre in 2015-16. An overwhelming majority saw a deceleration in growth of net receipts from the Centre in 2015-16 compared to the pace of the year earlier.

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Livemint.com, 15 April, 2016, http://www.livemint.com/Opinion/Hu2sEKQjFpTAxrqOlPtCMM/Why-are-states-turning-their-backs-on-farmers.html


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