Farm Distress Has Govt Pay attention, but Economic Slowdown can attract stock market strings in the budget

New Delhi: Following great promises from the NDA parties led by BJP during the election campaign, Union budget 2019 is expected to lean towards growing peasant abuse in the country.

Dissatisfied farmers were an important part of the BJP manifesto for the Lok Sabha elections. When newly elected finance minister Niramala Sitharaman will present her first budget on July 5, the stress on the rural economy will be an important factor in her debut.

The government's first decision was to expand the coverage of the PM-Kisan plan. Announced in the interim budget on the eve of the Lok Sabha elections, PM-Kisan aimed to cover 9.5 crore small and marginal farmers (SMF), who own a maximum of five hectares of land.

The interim budget yielded Rs 75,000 crore for this direct transfer to SMF bank accounts. The government estimates that the expansion of PM-Kisan will include an additional 5 crore farmers, bringing the total beneficiaries to 14.5 crore farmers. It is now estimated at Rs 87,000 crore.

The actual number of farmers in the country is unknown and the estimate of 14.5 crore comes from the Agricultural Census of 2016.

The road to offering benefits to farmers may not be smooth for the center. The fiscal scope for the government is limited. In the interim budget, the estimated revenue increase is 18 percent for GST, 32 percent for personal income tax and 15 percent for corporation tax.

The economic slowdown will make these goals even more challenging. With higher MSP & # 39; s (minimum support prices) and bulging tenders, the food surcharge can also rise in the current financial year.

The outstanding debt of Food Corporation of India (FCI) of the National Small Savings Fund is estimated at Rs 1.81 lakh crore. In FY19, according to Rs 1.4, FCI had to get lakh crore from the government, but it only received Rs 80,000 crore.

Sooner or later, food aid must be paid in full from the budget. There are several other cases of government spending in different sectors through the National Housing Board, NABARD and Rural Electrification Corporation are not reflected in the budget.

Another important decision of the Modi 2.0 government was to complete the vaccination for foot-and-mouth disease (FMD) and cattle brucellosis. ICAR (Indian Council for Agricultural Research) had estimated that the country suffers a direct loss of Rs 20,000 crore due to the decline in milk production and traction.

The vaccination program runs from FY04 and until 2016 it was fully funded by the Center. In FY16, on the recommendation of the 14th Financial Commission, the Center increased the share of states in the deconcentration of funds to 42 percent from 32 percent and central funding was reduced to 60 percent from 100 percent.

This had a negative effect on the vaccination program and several cases of FMD have been reported in Maharashtra. The government's decision to restore 100 percent central funding will be the required incentive for the vaccination program. It will result in a higher milk production. In 2018, the World Organization for Animal Health carried out an evaluation of the veterinary services of India and identified several shortcomings. If the FMD vaccination program is to succeed, the shortcomings must be eliminated.

Moreover, it can offer better market access for Indian meat in China, the US and the EU, as they do not allow the import of buffalo meat from India. China brings Indian meat through Vietnam. If India is declared FMD-free, the export of buffalo meat can increase considerably and the unit realization of exports can also increase.

The new Finance Minister appears to be taking steps in this direction.

Nirmala Sitharaman started its pre-budget stakeholder consultation for this year last week with a meeting on agriculture and rural development.

Claiming that the concerns of the agricultural sector are high on the priority of its government, Sitharaman focused on measures to promote the economic and social infrastructure of the rural sector and ways to eradicate unemployment and poverty through the development of both agricultural and non-agricultural agricultural sectors, according to an official statement.

| Edited by: Aakarshuk Sarna

. (tagsToTranslate) BJP (t) budget (t) peasant crisis (t) Food company of India (t) Nirmala Sitharaman (t) PM Kisan Scheme (t) trade union budget 2019

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