Budget 2019: Basic income for farmers to boost rural consumption, higher credit to help agriculture sector, say experts

Mumbai: The government decision to allocate Rs 75,000 crore to 12 crore farmers for a minimum assured income of Rs 6,000 per year in the interim budget will boost the rural consumption and positive for agriculture and allied sectors, according to industry experts. The measures initiated by the government to revive the agricultural economy such as income support scheme (Kisan Samman Nidhi), higher agricultural credit and interest subvention for a longer period in case of natural disasters, will help fertilisers companies in the medium-term through higher demand, ICRA senior vice president K Ravichandran said. [caption id=“attachment_1031405” align=“alignleft” width=“380”] Representational image of onions. Reuters[/caption] Payment for indigenous urea has been hiked, while for imports it has been maintained, which will be positive for new urea projects, he said. However, phosphatic and potassic (P&K) fertiliser manufacturers will face pressure on margins, as the rise in raw material prices and rupee depreciation will necessitate higher pass through to the farmers, he added. Comprehensive financial services and solution provider ABans Group chairman Abhishek Bansal opined that the farmers are the net beneficiaries after the government increased the Minimum Support Price (MSP) for many crops last year, now they are supported by minimum income as well. The income support of Rs 2,000 per hectare or Rs 6,000 per year to farmers with up to 2 hectares of land will be a game-changer. Dhanuka Agritech managing director M K Dhanuka said, though an interim budget, the government has provided much-needed income support to farmers by providing an additional fixed income. Addressing farm distress was much required since from last few years cost of production has gone up and farmers are not getting the full price of their produce, he added. Icra vice president Pavethra Ponniah said the budget announcement of setting up a separate Department of Fisheries is positive for the aquaculture industry as it would lead to prioritisation and more focused follow up on the development of farmers. Further, loans availed through the Kisan Credit Card would give the farmers benefit of 2 per cent interest subvention and will go some way towards easing the ongoing pricing pain for shrimp farmers. Amit Vatsyayan, partner - government and public sector, advisory services, EY India observed that each farmer faces unique type of challenges and requires customised schematic and policy support to mitigate these challenges. A scheme like PMKSN is a welcome move, as it provides support to small and marginal farmers who are largely involved in subsistence farming and struggles to invest in agriculture inputs or technology, he added. Further, he said, the budget also emphasised the importance and need of doubling the farmer’s income. However, NCML managing director and CEO Sanjay Kaul said, this budget announcement would provide only marginal relief to the estimated 120 million small farmers in the country. The Kisan Sanmaan Nidhi scheme does not provide any relief to many actual cultivators such as tenants and sharecroppers as the cash transfer would go to owners even if they are not actual tillers of the land. There is thus a very good case for deploying budgetary resources to create non-farm employment opportunities in rural areas, he added.