The Indian government raised its agriculture spending for fiscal year 2016-2017 to Rs. 36,000 crore, a 44% increase over the previous year. Major areas that will receive increased funding include crop insurance schemes like Pradhan Mantri Fasal Bima Yojana which will receive Rs. 5,500 crore, irrigation projects, e-marketplaces for farm goods, and interest subsidies on loans for farmers. The budget aims to boost the agriculture sector and improve farm incomes following two years of drought conditions.

1. BUDGET 2016
GOVT RAISES
AGRICULTURE
SPENDING TO
RS36,000 CRORE

2. Increased funding to go into irrigation schemes, crop insurance,
and national e-market for farm produce, pulse production and
interest subsidy

3.  In a major push for agriculture in the Union budget, funding for the
recently launched crop insurance scheme Pradhan Mantri Fasal
Bima Yojana (PMFBY) has been more than doubled from Rs.2,589
crore in 2015-16 (budget estimate) to Rs.5,500 crore for 2016-17.

4. The budget announced on Monday placed a renewed focus on the
farm sector in a bid to revive agriculture growth and improve farm
incomes at a time when rural India is going through a protracted
period of distress.

5.  Farmers and rural India will get the government’s immediate
attention and the priority is to provide additional resources, finance
minister Arun Jaitley said, adding that the government will aim to
double farm incomes in the next five years.

6. The increased funding in the budget will go into a gamut of irrigation
schemes, crop insurance, the creation of a national e-market for farm
produce, higher production of pulses and interest subsidy for easing
the burden of loan repayment for farmers.
Jaitley said that 2.85 million hectares will be brought under irrigation
through the flagship Pradhan Mantri Krishi Sinchayi Yojana (PMKSY)
scheme in 2016-17.
The government has made irrigation and drought-proofing a priority
after two consecutive monsoon failures in a country where over half of
the farm lands are rain-fed.
Further, 89 projects under the Accelerated Irrigation Benefits
Programme (AIBP) that are languishing will be fast-tracked.

7. This will help irrigate nearly 8 million hectare, Jaitley said, adding that
the centre will spend Rs.17,000 crore on these projects next year, and
Rs.86,500 crore in the next five years.
Further, the budget created a dedicated long-term irrigation fund under
NABARD (National Bank for Agriculture and Rural Development), with
an initial corpus of Rs.20, 000 crore.
The overall budget for the agriculture sector was raised by over 44%,
from Rs.24, 909 crore in 2015-16 to Rs.35, 984 crore in 2016-17
(budget estimates).
Rural credit got a boost, too, from a target of Rs.8.5 trillion in 2015-16
to Rs.9 trillion next year. And to ease the burden of loan repayment on
drought-hit farmers, the budget allocated Rs.15, 000 crore towards
interest subvention.

8. To increase crop yields in rain-fed areas the budget allocated Rs.412
crore towards organic farming. “The emphasis is on value addition so
that organic produce grown in this part finds domestic and export
market,” the finance minister said.
For enhancement in pulses production, the budget allocated Rs.500
crore under the National Food Security Mission. The programme will
cover 622 districts in the country.
To help farmers get remunerative prices, a national agriculture loan
market will be launched in April to connect 585 regulated wholesale
markets across the country, Jaitley said.
He added that 12 states have already amended their farm produce
marketing laws and more states are expected to join the e-platform.

9. The centre will also strengthen procurement at support prices across
the country, Jaitley said, adding that an online procurement system will
be introduced by the Food Corporation of India.
The emphasis on irrigation and crop insurance schemes in this year’s
budget comes on the back of consecutive monsoon failures, and after
the centre faced flak for ignoring the distress in rural India.
While 2014 saw a deficit of 12% in the June to September south-west
monsoon, last year (2015) recorded an even worse deficit of 14% with
more than 10 states declaring a drought.
The centre spent nearly Rs.13, 000 crore in drought assistance to
states during 2015-16.

10. Reviving the farm sector was a major challenge for finance minister
Jaitley as sectoral growth rate of agriculture nosedived to minus 0.2%
in 2014-15, from 4.2% in 2013-14. For 2015-16, the growth rate is
estimated to be a dismal 1.1%, and is likely to be revised downwards if
winter crop yields take a hit.
Agriculture sustains nearly half of all households in India and needs a
new paradigm, said the 2015-16 Economic Survey released last week.
The survey urged the government to spend on efficient irrigation
technologies, support less water intensive crops like pulses and
oilseeds, create a national market for farm produce, and revamp the
dismal research and extension services.

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