, , , ,

The 2016 Union Budget for India is a shrewd political move by the government.  There is a serious attempt to throw away the tag of ‘suit-boot-ki-sarkar’ (a government of capitalists). A tag which, in political-India, automatically means anti-rural and / or anti-farmer and / or anti-poor. A tag that is dangerous given that a large number of people still live in rural areas and are dependent on agriculture. Also many States go for elections in the next couple of years.  This cartoon from Sandeep Adwaryu says it perfectly

This makeover is where the vision of “doubling farmer’s income in five years” comes in.  A slew of measures have been announced in two areas; those that have a direct impact on farming – irrigation, crop insurance, agriculture credit and those that have an impact on agriculture produce marketing – better rural roads, e-marketing of produce etc. See Union Budget 2016: Here’s what Arun Jaitley announced for farm sector for details.

On the face of it, the budget seems to be farmer-friendly. Something that was much needed given that the agriculture sector growth rate went from 4.2% in 2013-14 to -0.2% in 2014-15 and may only marginally recover in 2015-16. (figures from Economic Survey of India, 2015-16).  I repeat – on the face of it. 

In reality, none of these measures are new. India has been announcing measures to improve irrigation and better credit for years and years. The crop insurance is relatively new and the e-markets is brand new. The reality is that change on the ground on the agricultural productivity has been very very limited. Corruption, knee-jerk reactions and measures and the fundamental unviability of small scale subsistence agriculture does not help.

I am afraid that beyond sound-bites, the budget is going to do precious little for the farmers or for the rural sector. Doubling of incomes in 5 years is a joke. Everyone knows that. Assuming that Jaitley means real income of farmers (revenue – costs), it is impossible to achieve in 5 years. The Rule of 72 would indicate that for incomes to double in 5 years, agriculture would have to grow by 14.4% per annum. That it, to put it very mildly, close to impossible.  It is going to be like the other slogans – superb on delivery, short on achievement. 

I am happy to be proven totally wrong; I am afraid though that I am not likely to be.


Also read: P Sainath’s  criticism of this budget.