Budget 2021 Expectations: From Raising Income To Hike In Farm Credit; Farm Sector Announcements To Be Watched Closely

With the aim of doubling farmers' income by 2022, the government is likely to raise farm credit target to about ₹19 lakh crore in Budget 2021-22 to be presented on February 1.

Union Budget 2021: With farmer’s agitation over the Centres’ farm laws going unruly and marring the Republic Day celebrations, it is the agriculatural sector which will be closely watched during the upcoming Budget 2021. The pandemic which broke last year across the globe derailed the India’s economy after which the government announced several fire fighting measures in May 2020. Finance Miniter Nirmala Sitharaman held five press conferences sahiring details of five packages, initially announced by the Prime Minister under the Atmanirbhar Bharat Abhiyaan.

At that time Finance Miniter Nirmala Sitharaman said Rs 20 lakh crore includes Rs 8.01 lakh crore includes Rs 8.01 lakh crore of liquidity measures announced by the Reserve Bank since March and and also comprises the Rs 1.92 lakh crore package of free foodgrain and cooking gas to poor and cash to some sections announced in March.

Besdies, there were several announcements made in the agriculture package, including amendment of the Essential Commodities Act (ECA), 1955, and enactment of laws by the Centre to streamline agriculture marketing.

What was announced in 2020-21 Budget?

"Non-banking finance companies (NBFCs) and co-operatives are active in the agriculture credit space. The Nabard refinance scheme will be further expanded. Agriculture credit target for the year 2020-21 has been set up at Rs 15 lakh crore," Finance Minister Nirmala Sitharaman had said while announcing the Budget 2020-21.

The agricultural credit flow has increased consistently over the years, exceeding the target set for each fiscal. For instance, credit worth Rs 11.68 lakh crore was given to farmers in 2017-18, much higher than the Rs 10 lakh crore target set for that year, they added.

Similarly, crop loans worth Rs 10.66 lakh crore were disbursed in the 2016-17 fiscal, higher than the credit target of Rs 9 lakh crore.

As per the India Today data, in the last budget almost more than half of the agriculture ministry's budget was allocated to the ambitious income support scheme. The government allocated Rs 1.42 lakh crore for the Agriculture Ministry, with Rs 75,000 crore for the PM-Kisan scheme only.

What are likely announcements in Budget 2021?

 Depsite the ongoing farmers’ agitation, there are certain measures likely to be announced in the Budget 2021. The government is aiming to double farmers’ incomes by 2022. Besides, the government is likely to raise farm credit target to about Rs 19 lakh crore in Budget 2021-22 to be presented on February 1, as per the news agency PTI.

For the current fiscal, the government has set a farm credit target of Rs 15 lakh crore.  Like every year, the government and this time too, the target is likely to be increased to around Rs 19 lakh crore for the 2021-22, as per the sources quoted in PTI report.

Apart from this additional funds may be allocated for the infrastructure schemes of rural sectors.

There are chances of the government spending more money on farmers through the PM-Kisan cash support scheme, and a proposal in this regard is likely to be announced in the annual budget. As per the India Today report, the government has received many suggestions regarding farm sectors, including a hike in the existing annual amount under the PM-Kisan scheme. Even as the government is under revenue pressure, it is positive about this suggestion," cited the source in the report.

PM-Kisan is a central government scheme launched in December 2018 to help farmers to acquire agricultural inputs like fertilisers and seeds. Initially, this scheme was only for small and marginal farmers who own up to two hectares of land.

The government has paid six instalments under the PM-Kisan scheme and the seventh instalment which started from December 1 (December 2020-March 2021) is underway. More than 11 crore farmers have been benefited through this income scheme as on January 24, nearly 21 per cent lower than targeted numbers (14.5 crores), government data shows.